FASB vs IASB: Key Differences in Accounting Standard Setting

What Is the Difference Between FASB and IASB?

The difference between FASB and IASB is that they are separate standard-setting boards serving different financial reporting environments. FASB develops standards within U.S. GAAP, while IASB develops IFRS Accounting Standards for international use.

FASB stands for the Financial Accounting Standards Board. It develops financial accounting and reporting standards for nongovernmental entities reporting under U.S. GAAP.

IASB stands for the International Accounting Standards Board. It develops IFRS Accounting Standards. According to the IFRS Foundation, IFRS Accounting Standards are required for use by more than 140 jurisdictions.

The easiest way to remember the relationship is that FASB is a standard setter, while U.S. GAAP is the accounting guidance. Similarly, IASB is a standard setter, while IFRS Accounting Standards are the standards it develops.

If you want a deeper explanation of the difference between the organization and the U.S. accounting framework, see our FASB vs GAAP guide.

What Is FASB?

The Financial Accounting Standards Board is the independent private-sector organization responsible for establishing financial accounting and reporting standards for nongovernmental entities within the U.S. GAAP system.

The Financial Accounting Foundation's Trustees oversee FASB's standard-setting process. The U.S. Securities and Exchange Commission also recognizes FASB as the designated private-sector accounting standard setter, while the SEC retains its statutory authority over financial reporting by public companies.

For a deeper explanation of the Board's role, structure, and responsibilities, read what the FASB does.

What Does FASB Issue?

The FASB Accounting Standards Codification (ASC) is the official source of authoritative nongovernmental U.S. GAAP. SEC rules and regulations also apply to SEC registrants.

FASB uses Accounting Standards Updates (ASUs) to communicate changes to the Codification. An ASU explains the amendments, their purpose, and their effective-date provisions; it is not a separate accounting framework.

For example, an accountant researching revenue recognition under U.S. GAAP would ultimately research ASC Topic 606 and the applicable lower-level Codification guidance.

What Is IASB?

The International Accounting Standards Board is the independent standard-setting board within the IFRS Foundation that develops IFRS Accounting Standards for international financial reporting.

IASB develops and publishes IFRS Accounting Standards. Its members are responsible for developing those standards and approving IFRS Interpretations developed through the IFRS Interpretations Committee.

IFRS Accounting Standards have a broad international footprint. The IFRS Foundation reports that IFRS Accounting Standards are required for use by more than 140 jurisdictions.

You may also encounter standards beginning with IAS, such as IAS 2 or IAS 7. Current IFRS literature includes IFRS Standards as well as International Accounting Standards and certain interpretations issued through the predecessor standard-setting structure.

As of October 2026, Sam Woods is Chair of the IASB. His five-year term began on October 1, 2026.

“High-quality accounting standards are a vital foundation of the global economy.”

Sam Woods, Chair, International Accounting Standards Board — IFRS Foundation

FASB vs IASB: Key Differences

The key FASB vs IASB differences concern the reporting systems they serve, geographic and regulatory reach, governance, publications, stakeholder environments, due process, and conceptual frameworks.

1. U.S. GAAP vs IFRS Environment

FASB develops standards within the U.S. GAAP system. IASB develops IFRS Accounting Standards.

This does not mean every technical difference between U.S. GAAP and IFRS is an organizational difference between FASB and IASB. Inventory, impairment, leases, development costs, and other technical accounting topics belong primarily in a dedicated U.S. GAAP vs IFRS comparison.

2. Geographic and Regulatory Reach

FASB operates primarily within the U.S. financial reporting environment. Its standards are especially important for U.S. entities that prepare financial statements under U.S. GAAP.

IASB develops standards for international use. Individual jurisdictions, regulators, and lawmakers determine how IFRS Accounting Standards are adopted, required, or incorporated into local reporting requirements.

3. Governance and Oversight

FASB operates under the oversight of the Financial Accounting Foundation.

IASB operates as an independent standard-setting board within the IFRS Foundation. IFRS Foundation Trustees oversee governance, while the Due Process Oversight Committee monitors compliance with the standard-setting due process.

4. Standards and Publications

FASB maintains the Accounting Standards Codification and communicates amendments through Accounting Standards Updates.

IASB issues IFRS Accounting Standards and amendments. That is why U.S. guidance may appear as ASC 606 or ASC 842, while international guidance may appear as IFRS 15, IFRS 16, or an IAS standard.

5. Stakeholder Environment

FASB receives input from investors, companies, auditors, private-company stakeholders, not-for-profit organizations, academics, and other participants in the U.S. reporting environment.

IASB consults stakeholders across multiple jurisdictions and capital markets. That international scope introduces different markets, legal structures, business practices, and regulatory environments into the consultation process.

6. Standard-Setting Process

Both boards research reporting problems, publish proposals, seek stakeholder feedback, redeliberate issues, and issue final guidance. The broad pattern is similar, but their detailed governance and consultation structures differ.

7. Conceptual Framework

Both boards use conceptual frameworks to support consistent standard setting. However, the frameworks developed separately and should not be treated as identical.

What Are the Similarities Between FASB and IASB?

FASB and IASB share the goal of improving useful financial reporting, and both use conceptual frameworks, public consultation, stakeholder feedback, exposure drafts, and public board deliberations when developing standards.

Both boards seek financial information that helps investors and other users make informed decisions. Both also rely on conceptual reasoning rather than creating accounting requirements without an underlying framework.

FASB describes its process as comprehensive and independent, with broad stakeholder participation. The IFRS Foundation bases its due process on three core principles: transparency, full and fair consultation, and accountability.

Neither board normally creates a major accounting standard without giving affected stakeholders an opportunity to respond. This shared commitment to consultation is also one reason the boards have been able to cooperate on significant international projects.

How Do the FASB and IASB Standard-Setting Processes Differ?

FASB and IASB follow broadly similar due-process stages—research, public proposals, stakeholder consultation, redeliberation, and final standards—but they operate under different governance structures and stakeholder environments.

FASB Standard-Setting Process

FASB normally begins when a financial reporting issue is identified. The Board decides whether the issue should be added to its technical agenda, staff research the problem, and Board members deliberate possible solutions during public meetings.

FASB may publish an Exposure Draft and request stakeholder comments. Depending on the project, it can also conduct additional outreach or hold public roundtables before redeliberating the proposal and deciding whether to issue an Accounting Standards Update.

“Our success in developing standards that address your priorities depends on your input.”

Richard R. Jones, Chair, Financial Accounting Standards Board — 1Q 2026 Chair Report

IASB Standard-Setting Process

IASB also uses research, consultation, public proposals, feedback, and redeliberation. Its formal due process is governed through the IFRS Foundation's Due Process Handbook.

Research projects examine accounting problems and potential solutions. If standard setting is justified, IASB normally publishes proposals for public comment, reviews the feedback, redeliberates significant issues, and then decides whether to issue or amend an IFRS Accounting Standard.

Neither process is inherently better. Both seek to balance technical quality, transparency, and stakeholder participation.

How Do the FASB and IASB Conceptual Frameworks Differ?

FASB and IASB both use conceptual frameworks to support consistent standard setting, but the frameworks developed separately and have differences in their roles, terminology, and detailed concepts.

FASB Conceptual Framework

FASB Concepts Statements guide the Board when it develops accounting standards. They address objectives, qualitative characteristics, recognition, measurement, presentation, and related financial reporting concepts.

FASB Concepts Statements are nonauthoritative. They do not establish or change existing U.S. GAAP. When applicable Codification guidance exists, that authoritative guidance remains the starting point.

For a broader explanation of those foundations, see our guide to financial reporting concepts .

IASB Conceptual Framework

IASB's Conceptual Framework also helps the Board develop standards using consistent concepts. It can additionally help preparers develop an accounting policy when no IFRS Standard specifically applies to a transaction or event.

The IASB Conceptual Framework is not itself an IFRS Accounting Standard and does not override a requirement contained in an applicable Standard.

FASB and IASB Convergence: Did the Two Boards Become the Same?

No. FASB and IASB worked together for years to reduce differences between U.S. GAAP and IFRS, and they achieved substantial convergence in selected areas, but the boards and the two reporting frameworks remain separate.

A major milestone came in September 2002, when FASB and IASB met in Norwalk, Connecticut, and agreed to work toward more compatible, high-quality accounting standards. The arrangement became known as the Norwalk Agreement.

Revenue Recognition as a Convergence Example

Revenue recognition became one of the strongest examples of cooperation between the two boards.

FASB and IASB jointly developed a converged revenue model that resulted in ASC Topic 606 under U.S. GAAP and IFRS 15 under IFRS.

During development of the project, the boards received more than 1,500 comment letters before issuing the converged revenue standard in 2014.

For more background on the U.S. side of revenue accounting, see our guide to revenue recognition under U.S. GAAP .

Does FASB Set IFRS or Does IASB Set U.S. GAAP?

No. FASB does not issue IFRS Accounting Standards, and IASB does not set U.S. GAAP. FASB develops standards within the U.S. GAAP system, while IASB develops IFRS Accounting Standards.

The boards can cooperate on accounting projects, but cooperation does not merge their authority or turn the two accounting frameworks into one system.

Why Does FASB vs IASB Matter to U.S. Accountants?

Understanding FASB vs IASB helps U.S. accountants identify the correct financial reporting authority before researching a transaction, especially when multinational groups, foreign subsidiaries, international investments, or cross-border reporting are involved.

Accounting Students

U.S. accounting students usually spend more time with FASB and U.S. GAAP, but financial reporting courses and professional exams can also introduce IFRS. Understanding which board develops which standards prevents the two systems from becoming mixed together.

Accountants and Bookkeepers

A U.S. accountant may prepare information under U.S. GAAP while also reviewing financial information from a foreign subsidiary or investment prepared under IFRS.

The first question should therefore be: Which reporting framework applies? Only then should the accountant research the detailed accounting treatment.

Small Business Owners

Most small U.S. business owners do not need to master every difference between U.S. GAAP and IFRS for ordinary bookkeeping.

The distinction becomes more relevant when a business works with foreign investors, international lenders, overseas subsidiaries, or potential cross-border buyers.

Investors and Multinational Companies

Two businesses can describe similar economic activities while reporting them under different accounting frameworks. Understanding the standard setter behind each framework helps users recognize when additional comparability analysis may be necessary.

Common FASB vs IASB Misconceptions

The most common FASB vs IASB mistakes happen when the standard-setting organizations are confused with the accounting frameworks and standards they develop.

Frequently Asked Questions About FASB vs IASB

FASB vs IASB: Final Takeaway

FASB and IASB share the goal of improving financial reporting, but they remain separate accounting standard setters.

Both boards use conceptual frameworks, public consultation, stakeholder feedback, and formal due process. Their governance structures, geographic reach, and reporting environments remain different.

Once you understand that distinction, topics such as U.S. GAAP vs IFRS, international convergence, and accounting standard setting become much easier to follow.