Financial Education

International accounting standards are developed by the IASB, while U.S. GAAP is developed by FASB. In 2002, both standard-setting bodies committed to developing high-quality, compatible accounting standards. In the “Norwalk Agreement,” both standard setters agreed to make best efforts to:

1. make their existing standards fully compatible as soon as practical
2. coordinate future development of standards

Since 2004, any significant new standard should be developed cooperatively. Existing differences may take longer to reconcile, as in many cases they represent differences in principles. In addition, industry lobbies and politicians exert pressure on the standard-setters, and these groups may have different motivations in different countries.

For more information, see all articles on: Accounting, Financial Statement Analysis, International Investing

See also:

Inventory Accounting: Differences Between U.S. GAAP and International Standards

Global Investment Performance Standards (GIPS) Characteristics

The Impact of an Aging Population on the Global Economy

Translating the Financial Statements of a Foreign Subsidiary in a Hyperinflationary Economy

The Cash Method of Accounting