Financial Reporting Standards

The two primary standard-setting bodies are the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB)

In U.S. FASB sets forth Generally Accepted Accounting Principles (GAAP); Outside the U.S., the IASB establishes International Financial Reporting Standards (IFRS).

IASB has 4 stated goals:
1. Develop global accounting standards requiring transparency, comparability, and high quality in financial statements.

2. Promote the use of global accounting standards.

3. Account for the needs of emerging markets and small firms when implementing global accounting standards.

4. Achieve convergence between various national accounting standards and global accounting standards.

Most national authorities (监管机构) belong to the International Organization of Securities Commission (IOSCO). 3 objectives of financial market regulation according to IOSCO are to:
(1). Protect investors.
(2). ensure the fairness, efficiency, and transparency of markets.
(3). Reduce systemic risk.

Securities and Exchange Commission Required Filings:

Form S-1, Form 10-K, Form 10-Q, Form DEF-14A, Form 8-K, Form 144, Forms 3, 4, 5.

The IFRS framework describes each of these qualities:

Understandability 可理解性
Comparability 可比较性
Relevance 相关性
Reliability. 可靠性 Specific factors that support reliability include:

Faithful representation of transactions and events 忠实对运营和活动的表述
Substance over form. 超过运营形式的实质
Neutrality 中立
Prudence 谨慎性
Completeness 完整性

Constraints on financial statement preparation

The need to balance reliability 可靠性和及时性之间的寻找平衡
Costs 财务报告的成本是否过大
Intangible and non-quantifiable information about the company can't be captured in financial statement.

The 2 primary assumptions:
Accrual Basis 权责发生制
Going concern assumption 持续经营假设

Under IAS No.1 required financial statements are

Balance Sheet
Income Statement
Cash Flow Statement
Statement of Changes in Owners' Equity
Explanatory notes, including a summary of accounting policies

Under IAS No. 1 Principles for preparing financial statements :

Fair presentation
Going concern basis
Accrual basis
Consistency
Materiality

Under IAS No.1 Principles for presenting financial statements:

必须包括类似项目的归总和不同项目的细分
非特殊情况下，不得用资产对冲负债，收入对冲费用
企业必须发布分类资产负债表，将资产和负债俺流动(current)和长期(long term)分类
财务报表的正彪和辅助必须反映必备的最少信息(minmum information).
非特殊情况下，企业财务报表中必须对较前期数据

Differences between framework of IASB and FASB

构架目的的不同。IASB下，企业管理层可以自己决定会计处理方法，FASB不行.
财务报表目的不同。FASB为非盈利和盈利组织设置不同框架，IASB则只有一个。
假设不同。IASB比较注重持续经营的假设
质量特性不同。FASB注重相关性和可靠性；IASB注重可比较性和可理解性。
财务报告要素不同。

Coherent financial reporting framework:

Transparency
Comprehensiveness
Consistency

Barriers to creating a coherent financial reporting framework:

Valuation
Standard Setting
Measurement