DEVELOPMENT OF FINANCIAL REPORTING AND STANDARD - SETTING BODIES
Conceptual Framework and Accounting Standard
BSA 3 I I SEM 2 I 2023
Standard Setting Bodies
IASB
(International Accounting Standards Board)
- Based on London, UK
- Into existence on April 1, 2001
- Successor of International
Accounting Standards Committee
(IASC)
- Deals with the development of
International Financial Reporting
Standards (IFRS) and promoting
the application of these standards.
- 16 members (1 chairman,
15 members)
FASB
(Financial Accounting Standards Board)
- Based on Norwalk Connecticut, USA
- Into existence in 1973
- Replaces Accounting Principles
Board (APB) and the Committee on
Accounting Procedure (CAP)
- Caters to the development of US
Generally Accepted Accounting
Principles (GAAP) in the interest of
the public.
- 5 members
In September 2002, IASB & FASB, signed
a Memorandum of Understanding between
the FASB, and IASB.
The Agreement was a significant step
towards the US formalizing its commitment
to the convergence of US GAAP and
International Financial Reporting Standards.
The Agreement is called, Norwalk
Agreement for it happened in Norwalk,
USA.
Objectives of IASB
- To develop a single set of high
quality, understandable, enforceable,
and globally accepted financial
reporting standards based on
clearly articulated principles.
- To promote the use and rigorous
application of those standards;
- To take account of, as appropriate,
the needs of a range of sizes and
types of entities in diverse
economic settings;
- To promote and facilitate the
adoption of IFRSs, being the
standards and interpretations issued
by the IASB, through the
convergence of national accounting
standards and IFRSs.
FRSC
(Philippine Financial Reporting Standard
Council)
- Established by the Professional
Regulatory Commission under the
Implementing rules and regulations
of the Philippine Accountancy of Act
of 2004 to assist the Board of
Accountancy in carrying out its
power and function to promulgate
accounting standards in the
Philippines.
- The FRSC’s main function is to
establish generally accepted
accounting principles in the
DEVELOPMENT OF FINANCIAL REPORTING AND STANDARD - SETTING BODIES
Conceptual Framework and Accounting Standard
BSA 3 I I SEM 2 I 2023

Philippines. Successor of the We’re not looking for ABSOLUTE

Accounting Standards Council consensus, but rather most members of the
(ASC) financial community recognized them as the
standards that over time have proven to be
- Consists of a Chairman (senior most useful.
practitioner), and 14 members who
are appointed by the BOA and We use the Accounting Standards
include representatives from the Codification (ASC) to organize the rules in
following: which we must follow from a GAAP
perspective.
1 Board of Accountancy (BOA)
1 Securities and Exchange
Commission (SEC)
Parties involved in Standard Setting
1 Bangko Sentral ng Pilipinas (BSP)
1 Bureau of Internal Revenue (BIR)
1 Financial Executives Institute of There are a few parties related to the
the Philippines (FINEX) development of US GAAP;
1 Commission on Audit (COA)
8 Philippine Institute of Certified Securities Exchange Commission (SEC)
Public Accountants (PICPA) American Institute of CPAs (AICPA)
2 Public practice Financial Accounting Standards Board
2 Private practice (FASB)
2 Academe
2 Government The SEC relies on the FASB to develop
accounting standards

Environment and Theoretical Structure of

Financial Accounting

In the United States, we use a common set

of standards and procedures called:
Generally Accepted Accounting
Principles (GAAP)

“Generally Accepted” means either that an

authoritative accounting rule-making body
has established a principle of reporting in a
given area or that over time a given practice
has been accepted as appropriate because
of its universal application.