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Costing Conceptual Frameworks

Prior to 1929 no group – public or private – was issuing or responsible for any accounting[4] standards. After the 1929 stock market crash, a call to regain the public’s confidence and investor’s trust was demanded and the Securities and Exchange Act of 1934 was passed resulting in public companies being supervised by the U.S. Securities and Exchange Commission (SEC). This set the groundwork for GAAP Generally Accepted Accounting Principles (United States), outlining financial accounting principles for external reporting standards for users of financial statements’ information such as capital markets and creditors.

Over the next 47 years many individual committees, professional bodies and boards released various financial accounting procedural frameworks until 1976 when work began on a US framework that remains in place today, governed by the Financial Accounting Standards Board (FASB). 
Note: Since April 1, 2001 the International Accounting Standards Board has been working on developing new international financial reporting standards. The new standards, referred to as International Financial Reporting Standards (IFRS), aim to update and refine existing concepts and provide descriptive guidance that includes comparisons of reporting requirements between IFRS and U.S. GAAP. As a result of establishing International Financial Reporting Standards, the IASB and FASB Conceptual Frameworks and Standards are in the process of being updated and converged to reflect the changes in markets, business practices and the economic environment that have occurred in the two or more decades since the concepts were first developed. One of the foundations of a set of Financial Accounting Standards is the creation of a Conceptual Framework that defines the principles upon which the standards will be based. Most major national and international accounting standards have developed conceptual frameworks to support their work on setting standards.