Presentation on financial

accounting standard

By :Nirajan Thapa
What is the 'Financial Accounting
Standards Board - FASB'
• The Financial Accounting Standards Board (FASB) is a seven-member
independent board consisting of accounting professionals who
establish and communicate standards of financial accounting and
reporting in the United States.
• FASB standards, known as generally accepted accounting
principles (GAAP), govern the preparation of corporate financial
reports and are recognized as authoritative by the Securities and
Exchange Commission (SEC).
BREAKING DOWN 'Financial Accounting
Standards Board - FASB'

• Accounting standards are crucial in an efficient market, as information must be transparent, credible
and understandable.
• The FASB sets out to improve corporate accounting practices by enhancing guidelines set out for
accounting reports, identifying and resolving issues in a timely manner, and creating a uniform
standard across the financial markets.
• The FASB was established in 1973 as the designated organization for championing the financial
standards that govern accounting practices and the preparation of financial reports in the private
sector.
• In fact, it is the SEC itself that gives the FASB its governing authority. The SEC technically has statutory
authority to establish and manage financial reporting standards under the Securities Exchange Act of
1934 but has chosen to give that power to the privately held FASB to self-manage the private sector.
The Mission of the FASB

• The stated mission of the FASB is to establish and improve financial accounting and reporting
standards and to provide useful information to investors and other people who use financial reports.
• The FASB seeks to actively achieve this mission by facilitating an open and independent reporting
process that allows broad participation from company stakeholders.
• The mission and activity of the FASB are overseen by the Financial Accounting Foundation’s (FAF)
Board of Trustees.
• As of 2016, the current and primary priority of the FASB is to integrate U.S. GAAP with
the International Financial Reporting Standards (IFRS). This allows for more transparent and
translatable financial practices internationally. Specifically, the FASB aims to address the differences
in reporting between revenue recognition, leases  financial instruments  and insurance.
The Overall Structure of the Entity

• The FASB is part of a larger, nonprofit, private institution that is independently structured from all other
business entities and professional organizations.
• The overall structure is comprised of the FASB, the FAF, the Financial Accounting Standards Advisory Council
(FASAC), the Governmental Accounting Standards Board (GASB) and the Governmental Accounting Standards
Advisory Council (GASAC).
• The FAF is responsible for all the oversight, administration and finances of the FASB and the GASB. The FAF's
advisory board is also responsible for the council of the FASAC and the GASAC.
• The FAF's primary responsibilities include protecting the standards setting process and appointing members
of the other organizations.
• The FASAC was created to advise the FASB on issues, agendas and priorities.
• The FASAC is integral to the successful operations of the FASB and is comprised of more than 30 members.
Both the GASB and the GASAC are geared toward governmental oversight.
Accounting Standards Board of Nepal
• Accounting Standards Board (ASB) has been constituted by Government of Nepal on 26 Falgun
2059 corresponding to 10 March, 2003 under Nepal Chartered Accountants Act, 1997 (first
amendment 2002).
• The Accounting Standards Board (ASB) is an independent statutory body with the responsibility to
set and issue accounting standards for preparation and presentation of financials statements in
Nepal
• The ASB was formed in March 2003 with an amendment to the Institute of Chartered
Accountants of Nepal Act 1997 incorporating the provision for its establishment and operation by
the Government of Nepal.
• The ASB is primarily responsible for setting accounting and financial reporting standards for
business enterprises in line with the International Financial Reporting Standards (IFRSs).
• Since 2007, ASB has also been entrusted by Nepal Government with the responsibility to develop
accounting standards for public sector in line with the International Public Sector Accounting
Standards (IPSASs).
• The ASB consists of 13 members comprising a Chairman nominated
by the Government of Nepal from Fellow Chartered Accountants
(FCA) and other members are representative of Ministry of Finance,
representative of Office of the Auditor General, representative of
Financial Comptroller General Office, Company Registrar of Office of
Company Registrar, Director General of Inland Revenue Department,
Chairman of Securities Board of Nepal & Five Chartered Accountants
(CA) & One Registered Auditor (RA) nominated by Government of
Nepal on recommendation of Institute of Chartered Accountants of
Nepal's Council.
Objectives

• The objective of the Board is to formulate accounting standards in line

with IFRSs issued by IASB. The Board has full discretion in developing
and pursuing the technical agenda for setting Accounting Standards in
Nepal.
Functions, Duties and Power
• Pursuant to Section 15(kha) of the Institute of Chartered Accountants
Act, 1997, the main functions of the Board are to:
• Regulate and systematized accounting profession, formulation of
accounting standards on the basis of IFRSs.
• Set procedures to develop Accounting Standards and publish materials
related to Accounting Standards.
• Make improvement and revision of Accounting Standards in line with
IFRSs.
• Interpretation of Accounting Standards.
• Perform other functions related to Accounting Standards.
Composition of ASB Nepal

• The Board consists of 13 members nominated by the Nepal

Government with representation from various stakeholders including
the Ministry of Finance, Office of the Auditor General, Financial
Comptroller General Office, Inland Revenue Department, Company
Registrar Office, Security Board of Nepal and members of the Institute
of Chartered Accountants of Nepal representing the profession. A
Chairperson is nominated from amongst the fellow members
representing the accounting profession in the Board by the Nepal
Government:
THANK YOU