accounting standards

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Generally Accepted Accounting Principles

Rules to which accountants adhere when preparing financial statements. The Generally Accepted Accounting Principles exist to ensure that American accountants are using the same or almost the same standards so that comparison of financial statements between or within a company is easy and accurate. They also promote transparency in accounting. The GAAP are set by the FASB. See also: International Financial Reporting Standards.

accounting standards

guidelines relating to the accounting treatment of the figures which are reported in the accounts of companies. They were introduced to reduce the possibility of having large variations in reported profits and to restrict the room available for manoeuvre by those charged with the task of preparing the accounts.

Prior to 1990 Statements of Recommended Practice (SORPS) and Statements of Standard Accounting Practice (SSAPS) were issued in the UK by a joint committee of the professional accounting organizations. These covered various matters, including:

Accounting policies; post balance sheet events and contingencies; earnings per share; taxation; stocks and long-term contracts; cash flow statements; research and development; and group accounts.

In 1990 the accountancy bodies set up a new organization to oversee accounting standards, the Accounting Standards Board which issued a number of statements that are now called Financial Reporting Standards (FRSS). The FRSs were drawn up to comply with both UK law, the Republic of Ireland law, and EU directives.

In recent years the International Accounting Standards Board (IASB) has overseen the development of International Financial Reporting Standards (IFRS). These standards now apply to all large quoted companies in the European Union, which from the beginning of 2005 are required to report their interim and final annual accounts expressed in terms of these standards. Application of these standards initially generate different reported profits and balance sheet asset values from those which would result from using national generally-agreed accounting principles or national financial reporting standards.

To date IFRS apply only to EU companies, and the USA, Japan and other developed countries use their own national accounting standards, though the US Financial Accounting Standards Board and the IASB are working to harmonize their rules. The goal is to produce a single set of global accounting standards to improve the transparency and consistency of financial reports.

References in periodicals archive ?
First, most federal agencies will use federal accounting standards to determine the assets, liabilities and unexpended appropriations they present on the balance sheet and then calculate the cumulative result of operations by subtracting the sum of the total liabilities and unexpended appropriations from total assets.
Do you believe there's a point at which accounting standards will founder on politics?
In 2009, the International Accounting Standards Board set up a separate set of international accounting standards for private companies, called IFRS for SMEs.
business and regulatory communities, the AICPA was publicly supporting the goal of a single set of high quality, global accounting standards to be used in the financial reporting of public companies throughout the world.
When asked what pleases him about his first term as International Accounting Standards Board (IASB) Chairman, far and away, Sir David Tweedie talks about the progress made towards converging accounting standards between IASB and the U.
Updates and clarifies text regarding contract pricing matters and cost accounting standards.
Financial reports produced by companies domiciled in various countries contain financial statements based on very different accounting standards.
Another helpful resource is the National Fiduciary Accounting Standards, a 1984 report by the Committee on National Fiduciary Accounting Standards.
As my colleagues at the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) will agree, fair value accounting poses many challenges and has sparked significant industry debate.
IASB [International Accounting Standards Board] An independent, privately funded accounting standard-setter.
005101CPA09) contains all of the outstanding pronouncements on professional standards issued by the AICPA, the International Federation of Accountants, and the International Accounting Standards Committee.
In recent years, frequent political intervention has shown little regard for the long-term damage it can do to the profession's prerogative for self-regulation and to the integrity of its due process for setting accounting standards and policies.

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