The Financial Accounting Foundation, the parent organization of the Financial Accounting Standards Board, has launched a new Web page highlighting the benefits of U.S. GAAP.
The Web page, at www.accountingfoundation.org/gaap, comes at a time when U.S. standard-setters such as FASB and the International Accounting Standards Board appear to be drifting apart on their convergence efforts over more than a decade to harmonize U.S. GAAP with International Financial Reporting Standards. Although FASB and the IASB came together to unveil a mostly converged revenue recognition standard earlier this year, they have failed to agree on key components of their other two major convergence projects, on financial instruments and leasing.
Over the summer, the IASB released its own financial instruments standard, IFRS 9, while FASB has yet to finalize its standard. Nevertheless, oficials at the Securities and Exchange Commission have recently signaled their intention to turn their attention once again to the long-delayed question of whether U.S. public companies can use IFRS (see SEC Mulls Next Move on IFRS).
The new FAF Web page functions as an educational portal and is part of a broader FAF initiative to highlight the benefits of preparing financial reports according to GAAP by public companies, private companies, not-for-profit organizations, and state and local governments in the U.S. In addition to FASB, the FAF is also the parent organization of the Governmental Accounting Standards and the Private Company Council.
The FAF said that many regard GAAP as the “gold standard” of financial reporting for public companies and state governments, but there are many private companies, not-for-profits, local governments and other entities that may not be familiar with the benefits of using GAAP.
The new initiative explores those benefits and also seeks to educate and inform all stakeholders—including preparers, investors, lenders, auditors, taxpayers, and other users—on how GAAP is “essential to the efficient functioning of our capital markets and the strengthening of our economy and governments,” according to the FAF.
The new Web page includes educational materials, thought leadership articles and videos on the importance of GAAP for public companies, private companies, not-for-profit organizations, and state and local governments. It also includes a section describing how FASB and GASB are simplifying and improving GAAP.
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