Research Assignment - Essay Example

In this scenario the priority for both of the boards were to converging IFRS and US GAAP. According to the Norwalk Agreement (September, 2002) in association with the regional bodies the IASB and the FASB started to work together for removing the differences of the accounting standards. The objectives of the project are to updating the existing concepts like setting up the standards, improve consistency and achieve completeness which would reflect the business practice changes, changes in market over the year.

The boards are conducting the project in 8 phases, among these the phase A of the project was completed already and the B, C, D phases are active currently (IFRS Foundation, 2011). Status of the Project The phase A of the project was completed on September 28, 2010 and the boards have issued the concept statement no 8 which is a replacement of the concept statement no 1 and 2. . Like in the definition of asset there is a difference between the two standards, for including future economic benefits in assets the term “expected” is in the IASB definition and there is “probable” in the FASB definition, which creates confusion among the users that which assets should actually they include; the most likely future benefits or all the future benefits they are expecting from the business.

So the boards have developed the phase B of the Conceptual Framework project which provides the recognition process of elements (e.g. assets, liability and revenue recognition) of financial statements along with the requirements of laws and regulations. The objective of the phase C of the project is providing the guide for selecting the bases of measurement which is needed for satisfying the objectives of financial statements. The aim is to select a particular measurement approach for all the financial statements.

This phase also establishes the framework for the measurement of fair value objective in US GAAP. The phase B and C are yet to be completed and the decisions that are already taken by the boards may change in the future board meetings. Major Changes in GAAP Proposed by the Project The Conceptual Framework project which is jointly developing by the IASB and the FASB would result in some major changes in the US GAAP accounting method. According to the US GAAP accounting method the requirements for revenue recognition are broad, for which the similar transactions can result in different accounting in contrast the IFRS has fewer requirements in case of revenue recognition.

Both the accounting method would have gone for some changes but the changes required for US GAAP in revenue recognition are more than the IFRS. A