Question

Financial Accounting Standards Board (FASB) has supported the use of asset-based model while building their conceptual framework, such model has also been adopted while building the International Accounting Standards Board's (IASB) conceptual framework. Recent research, however, argues against that model and proposes another alternative model.

Required:

question

Critically discuss this statement and Explain the advantages of using alternative approaches?

(Note: Students should rely on one or both of the following references):

Dichev, I. D. (2008). On the balance sheet-based model of financial reporting. Accounting Horizons, 22(4), 453-470.

Dichev, I. D. (2017). On the conceptual foundations of financial reporting. Accounting and Business. Research, 47(6), 617-632.

Answer 1

Both are establishing for accounting and financial reporting standards. Having one set of global accounting standards not only makes it easier companies to adhere to the proper financial standards but also makes thier financial reporting standards more transparent. Using this standards global head quarter in one country operating subsidiary in more countries' easier to understand the investor and governing body in countries . Conversation effects a) revenue recognition. b) change in leasing obligations. c) change in insurance contract.