Accounting Standards And Its Effect On The Development Of...

History Accounting standards has been around for thousands and thousands of years. Statements and loss and statements of balance emerged in about 1600. The reason behind the financial statements was to obtain information regarding capital. In the nineteenth century, it became necessary to develop accounting records and reports that reflected capital employed in various ways. When the industrial revolution emerged in the United States it brought a need for more standard accounting principles. In 1934, Securities and Exchange Commission was created to prescribe accounting principles and reporting practices. In 1936 AICPA American Institute of Certified Public Accountants was created to have a large influence on the development of accounting theory. In 1973 FASB Financial Accounting Standard Board was created to show how accounting principal should be established and issued accounting standards. FASB mission is to establish and improve accounting and reporting standards for the guidanc e and education of the public. Financial Accounting Standard Boards was just born in 1973, and the rules for revenue recognition was just focusing on how income was earned. In 2003 the Securities of Exchange Commission (SEC) released SAB no. 104 it created four elements of recognizing revenue (SEC 2007, 2007). Importance of Revenue Recognition Revenue is very important because it is used by investors in assessing a company’s financial performance of the company and to see if that investorShow MoreRelatedCritical Review : Determination Of Accounting Standards1678 Words   |  7 PagesCritical Review Determination of Accounting Standards Ross L Watts Jerold L Zimmerman have put together this article on accounting standards and on the basis of moderately relative accounting theories and interpretations- tried exploring various factors that persuade business entities in lobbying on accounting standards. The size of the companies is also researched and concluded upon their approach towards certain accounting standards. The Data used in the article is derived from FASB’s discussionRead MoreThe Predictions And Effects Of Financial Accounting981 Words   |  4 Pageswill describe the predictions and effects of financial accounting reports to discuss the statement based on the previous answer. 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