Overview of Accounting Standards
An accounting standard is a set of practices to systematize accounting functions. Accounting standards apply to assets, liabilities, revenue, expenses, and shareholders’ equity. The IFRS Foundation develops global accounting and sustainability standards. Our Standards are developed by the International Accounting Standards Board (IASB) and International Sustainability Standards Board (ISSB).
International Accounting Standards
The GAAP standards were developed in the United States. The IFRS standards are more European based and commonly used. Standards can be based on quantity, quality, time, or cost. Examples of accounting standards include IASB, FASB, and local tax laws, which differ across countries. Accounting standards ensure consistency, transparency, and informed decisions about a company’s performance.
Specific Accounting Standards
The Financial Accounting Standards Board (FASB) issues GAAP in the U.S. Many countries use or converge on IFRS established by the IASB. All EU companies use IFRS. The International Public Sector Accounting Standards Board (IPSASB) provides guidelines for governments and public organizations, promoting transparency and accountability. Industry-specific standards address unique requirements for sectors or industries. Accounting standards improve transparency of reporting and facilitate accountability.