Definition
The Accounting Standards Board (ASB) was established in 1990 to replace the Accounting Standards Committee (ASC) following recommendations in the Dearing Report. The ASB was responsible for setting accounting standards in the UK until it was abolished and its responsibilities transferred to the Financial Reporting Council (FRC) in 2012. The ASB issued Financial Reporting Standards (FRS), Financial Reporting Exposure Drafts (FREDs), and, through its offshoot, the Urgent Issues Task Force (UITF), it also issued reports known as Abstracts.
Examples
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Financial Reporting Standards (FRS): These are standards issued by the ASB detailing the principles and rules for proper financial reporting.
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Financial Reporting Exposure Drafts (FREDs): These drafts are proposals for new standards or amendments to existing standards released for public comment before becoming official standards.
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Urgent Issues Task Force (UITF): A group within the ASB aimed at addressing urgent accounting issues not covered by existing standards.
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FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland, inspired by IFRS for SMEs, which was implemented when the ASB was still operational.
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Dearing Report Recommendations: Drummond Dearing’s recommendations aimed at reforming the structure and function of accounting standard-setting bodies in the UK, which led to the creation of the ASB.
Frequently Asked Questions (FAQs)
What replaced the Accounting Standards Board (ASB)?
The functions of the ASB were transferred to the Financial Reporting Council (FRC) in 2012, and its standard-setting responsibilities were taken over by the newly formed Accounting Council within the FRC.
What was the role of the Urgent Issues Task Force (UITF) under the ASB?
The UITF addressed urgent accounting issues to provide timely guidance where there was no existing Financial Reporting Standard (FRS). Their findings were released as Abstracts.
What is a Financial Reporting Exposure Draft (FRED)?
A Financial Reporting Exposure Draft (FRED) is a document issued by the ASB proposing a new Financial Reporting Standard or amendments to existing standards. It is made available for public consultation and feedback before becoming an official standard.
What influenced the creation of the ASB?
The Dearing Report recommended the reformation of the UK’s accounting standard-setting bodies, leading to the replacement of the Accounting Standards Committee (ASC) with the ASB.
What are some notable Financial Reporting Standards (FRS) issued by the ASB?
Examples include FRS 1 (Cash Flow Statements), FRS 3 (Reporting Financial Performance), and FRS 102 (The Financial Reporting Standard applicable in the UK and Republic of Ireland).
Related Terms with Definitions
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Financial Reporting Council (FRC): The UK’s independent regulator overseeing corporate reporting and governance, which took over the ASB’s responsibilities in 2012.
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Financial Reporting Standard (FRS): Guidelines issued by the ASB to dictate the principles and rules for sound financial reporting in the UK.
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Accounting Standards Committee (ASC): The predecessor to the ASB, it was the original body responsible for setting UK accounting standards prior to 1990.
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Dearing Report: A key report leading to the establishment of the ASB, recommending reforms to the accounting standard-setting system in the UK.
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Accounting Council: A body within the FRC formed to take over the role of the ASB in setting accounting standards after 2012.
Online References
- Financial Reporting Council (FRC): frc.org.uk
- Chartered Institute of Management Accountants (CIMA): cimaglobal.com
- Institute of Chartered Accountants of England and Wales (ICAEW): icaew.com
Suggested Books for Further Studies
- “Financial Accounting and Reporting” by Barry Elliott and Jamie Elliott
- “UK GAAP 2019: Generally Accepted Accounting Practice under UK and Irish GAAP” by Ernst & Young LLP
- “Principles of Accounting” by J. Ireland and S. Glaister
- “Advanced Financial Accounting” by Richard Lewis and David Pendrill
Accounting Basics: ASB Fundamentals Quiz
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