Question A

The objective of the Conceptual Framework Project was to bring some improvements to the existing conceptual framework that would help in the setting of standards in the financial reporting industry. This was a joint project for both the IASB and FASB. The project had the objective of outlining what entailed important characteristics of accounting information including what constitutes a liability and an asset. The goals of the project included the creation of formidable future accounting standards based on varied principles, internationally converged and internally consistent. Among the parts that the board intended to change on the existing framework was recognition and measurement while filling some of the gaps that existed in that framework. The project was expected to focus on the changes that had taken place in the environment that the original frameworks were based, give priority to addressing issues that would bring short-term benefits to the board and consider concepts that would be applicable in the private sector.

The Emerging Issues Task Force was formed with the objective of improving aspects of financial reporting. This was meant to take place by way of identifying, discussing and resolving financial accounting issues contained in the FASB framework. The task force aimed at promulgating the implementation guidance to help reduce diversity in practice within a reasonable time. This minimizes the need for FASB to spend more effort and time addressing narrow application, implementation or other varied emerging issues within the existing GAAP. The task force includes members that are in a position to identify emerging issues before they result in being widespread and also before divergent practices become entrenched.

Question B

FASB uses the term ‘standards overload’ to showcase the concerns that the body has regarding the volumes of the accounting rules that exist. The volume of these rules brings about some complexity since some of the rules seem to override each other. Standards overload also encompasses the profusion of footnote disclosures and the difficulty that comes with locating all the accounting rules for a given topic. As a result, the FASB reached an agreement of evaluating the ability to issue standards that concentrate on basic objectives instead of giving standards that encompass detailed rules. The FASB standards can also be simplified by improving the cost-benefit analysis quality by way of engaging constituents in the analysis. Working in partnership helps to reduce costs without decreasing the benefits and this makes it possible for the development of standards that are easy to understand.

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