5. International differences and standardization

2014 ◽  
Author(s):  
Christopher Nobes
Keyword(s):  
Financial Reporting ◽  
Accounting Information ◽  
Financial Statements ◽  
Generally Accepted Accounting Principles ◽  
International Differences ◽  
Financial Reporting Standards ◽  
Accounting Principles ◽  
Accounting Numbers ◽  
Accounting Rules ◽  
Us Gaap

Just how different can accounting numbers be for the same company under different accounting rules? Which countries use International Financial Reporting Standards (IFRS)? In what main ways is US ‘generally accepted accounting principles’ (US GAAP) different from IFRS? How have politics and economics affected accounting? ‘International differences and standardization’ shows how international standardization simplifies the preparation of financial statements covering whole international groups and how it improves the comparability of the accounting information for managers and investors. Differences between US GAAP and IFRS are considered: US GAAP is more detailed than IFRS and tends to be written in terms of rules rather than principles. It also has fewer options.

scholarly journals Case Study: Differences Between US And International Financial Statements

2011 ◽  
Vol 7 (5) ◽  
pp. 101-102
Author(s):  
Dolores Rinke
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Accounting Principles ◽  
Us Gaap

This case examines the differences in format and terminology in financial statements between US Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). Students download the financial statements of two different companies in the same industry; i.e., Nokia (reporting under IFRS) and Motorola (reporting under US GAAP). Questions related to the differences in format and terminology are addressed.

scholarly journals Wereldstandaard financiële verslaggeving: IFRS of US GAAP?

2002 ◽  
Vol 76 (12) ◽  
pp. 565-573
Author(s):  
Ruud Vergoossen ◽  
Frans Van Der Wel
Keyword(s):  
United States ◽  
Financial Reporting ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Accounting Principles ◽  
Verenigde Staten ◽  
Us Gaap

De roep om een wereldstandaard voor de financiële verslaggeving is groot. De Europese Unie heeft gekozen voor de International Financial Reporting Standards (IFRS) die in 2005 worden ingevoerd, terwijl de Verenigde Staten blijven vasthouden aan de United States Generally Accepted Accounting Principles (US GAAP). Dit artikel gaat in op de implementatie van de IFRS in de Europese Unie en de obstakels die een consistente interpretatie en toepassing van de IFRS in de weg kunnen staan. Daarna worden de IFRS vergeleken met de US GAAP en komt de positie van de IFRS in de Verenigde Staten aan de orde. In een korte slotbeschouwing wordt een drietal scenario’s geschetst om te komen tot een wereldstandaard. Het scenario waarbij de IFRS en de US GAAP naar elkaar toegroeien, lijkt, gegeven de omstandigheden, het meest realistisch en wenselijk (convergentiestrategie).

Good Intentions at Good Grains, Inc.

2012 ◽  
Vol 28 (1) ◽  
pp. 115-129 ◽  
Author(s):  
Susan B. Hughes ◽  
Cathy Beaudoin ◽  
Russell R. Boedeker
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
External Pressure ◽  
Financial Accounting ◽  
Managerial Accounting ◽  
Ethical Considerations ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Gray Area ◽  
Accounting Principles

ABSTRACT: This case addresses the “gray” area associated with the use of accounting discretion as it relates to expense line item reclassifications. Such a context allows for an examination of the pressures that influence accounting decisions, and provides a glimpse into how managers might manage reported expenses. The reader meets analyst David Johnson when, as a result of both internal and external pressure to keep research and development (R&D) costs within budget, he is asked to find ways to reclassify R&D costs into other expense areas. As a result of the request, David immerses himself in the task in order to identify, within generally accepted accounting principles (GAAP), opportunities to reclassify R&D expenses to cost of goods sold. He ultimately proposes three separate reclassification entries that, although technically within GAAP guidelines, involve the use of accounting discretion. All three entries are approved by the accounting team. Financial accounting, managerial accounting, and M.B.A. students report that the case enhanced their knowledge of financial reporting and helped them understand ethical considerations associated with the preparation of financial statements. Accounting professionals report the case realistically depicts what accountants face in the workplace. A case extension using International Financial Reporting Standards (IFRS) is also provided.

Analyst Following and Forecast Accuracy After Eliminating the 20-F Reconciliation Between IFRS and U.S. GAAP

2020 ◽  
pp. 0148558X2094464
Author(s):  
Wen Li ◽  
Huai Zhang
Keyword(s):  
Financial Reporting ◽  
Financial Analysts ◽  
Forecast Accuracy ◽  
Financial Statements ◽  
Securities And Exchange Commission ◽  
Analyst Following ◽  
Analyst Coverage ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Accounting Principles

In 2007, the U.S. Securities and Exchange Commission (SEC) decided to allow foreign private issuers to file financial statements prepared according to International Financial Reporting Standards (IFRS) without reconciliation to U.S. Generally Accepted Accounting Principles (GAAP). Using a sample of foreign private issuers from 35 countries/regions during the period of 2005 to 2008, this article investigates how the elimination of the 20-F reconciliation affects financial analysts. We find that it significantly reduces analyst coverage but has no impact on forecast accuracy. We show that analysts who are greatly affected are more likely to terminate their coverage of IFRS firms after the SEC’s rule than other analysts. In addition, we hypothesize and find that eliminating the 20-F reconciliation has a greater impact on firms whose 20-F reconciliation is more useful to analysts. For these firms, the elimination of the 20-F reconciliation significantly reduces both analyst coverage and forecast accuracy. Overall, our results suggest that the elimination of the 20-F reconciliation imposes costs on financial analysts.

Making the Right Comparisons: Novartis AG

2007 ◽  
Vol 22 (4) ◽  
pp. 721-733 ◽  
Author(s):  
Elaine Henry ◽  
Ya-Wen Yang
Keyword(s):  
Financial Performance ◽  
Financial Reporting ◽  
Financial Statements ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Accounting Principles ◽  
The Right ◽  
Analytical Skill

This case introduces the concept of convergence between International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Principles (GAAP). The scenario involves a securities analyst's evaluation of Novartis AG's financial performance under IFRS and U.S. GAAP, and provides an opportunity to examine the issues giving rise to differences under the two sets of standards. Based on the company's 20-F disclosure, the case uses the reconciliation footnotes to recast the company's IFRS financial statements to U.S. GAAP. The analytical skill of adjusting financial statements is useful beyond the IFRS-to-U.S. GAAP context.

Do globalisation and adoption of IFRS by banks in Africa lead to less earnings management?

2019 ◽  
Vol 17 (2) ◽  
pp. 222-248 ◽  
Author(s):  
Mohammed Amidu ◽  
Haruna Issahaku
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Information Quality ◽  
Accounting Information ◽  
Financial Statements ◽  
International Standards ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Accounting Information Quality ◽  
National Economies

Purpose This paper aims to analyse the implications of globalisation and the adoption of international standards (International Financial Reporting Standards [IFRS]) for accounting information quality. Design/methodology/approach This paper uses a sample of 329 banks across 29 countries leading up to and beyond the implementation of IFRS to test for related hypotheses. Findings First, banks’ financial statements are prepared on the basis of international standards as national economies are integrated when social norms are diffused. Building on these results, the second test suggests that the relatively high-quality earnings among banks in Africa during the period is attributable to the adoption of and interaction of IFRS with globalisation and the strategy of banks to diversify within and across interest and non-interest income. Originality/value The authors investigate how globalisation and the adoption of IFRS affect accounting information quality.

Approaches to the Organization of International Accounting in Russian Enterprises

TEM Journal ◽  
2021 ◽  
pp. 249-258
Author(s):  
Ekaterina V. Surkova ◽  
Galina A. Skachko ◽  
Larisa K. Nikandrova ◽  
Maria M. Starkova ◽  
Nina F. Sakharova
Keyword(s):  
Financial Reporting ◽  
Accounting Information ◽  
Financial Statements ◽  
Reporting Standards ◽  
Optimal Method ◽  
Accounting Standard ◽  
Financial Reporting Standards ◽  
Advantages And Disadvantages ◽  
The Individual ◽  
Selection Of

The article discusses current issues of transformation of accounting information in accordance with international financial reporting standards (IFRS). This study is primarily aimed at developing approaches that determine the need for Russian enterprises to provide accounting information comparable at the international level. The authors analyze methods of transferring data from the Russian Accounting Standard (RAS) to IFRS. The methods used to form financial statements in accordance with IFRS are discussed. The issues of the application of these methods, as well as their advantages and disadvantages, are discussed. The author's approach to the selection of the optimal method of transformation is proposed taking into account the individual needs of organizations.

scholarly journals Impact of Changes in Accounting Standards on Earnings Management

2020 ◽  
Vol 2 (2) ◽  
pp. 166-175
Author(s):  
Kawa W. Muhamad ◽  
Subhi M. Saleh ◽  
Kees van Paridon
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Reporting Quality ◽  
Quality Standards ◽  
Financial Reporting Quality ◽  
High Quality ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Accounting Principles

This study considers the question whether the changes in Accounting Standards has led to companies making less use of earnings management. The paper is an attempt to investigate whether the application of high quality standards like International Financial Reporting Standards (IFRS) is related to high financial reporting quality. This study addresses this issue empirically. Furthermore, this research examines whether German companies that have applied IFRS have less earnings management compared to German companies that report according to the German Generally Accepted Accounting Principles (GGAAP). The sample, consisting of two equally large listed companies in Germany (Südzucker Group and Henkel Group) from 2003-2014. The study suggests that IFRS-adopters show different earnings management performance compared to companies reporting under German GAAP. This finding contributes to the discussion on whether high quality standards are appropriate and operational in countries with weak investor protection rights. The result shows that adopters of IFRS in Germany can be related with less use of earnings management as a result of changes in accounting standards. This result is contradictory with previous research that was done by Van Tendeloo and Vanstraelen, (2005), and consistent with the previous research conducted by Ball et al. (2003).

2. The international evolution of accounting

2014 ◽  
Author(s):  
Christopher Nobes
Keyword(s):  
Financial Reporting ◽  
Accounting Information ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Financial Position ◽  
The Us ◽  
Company Directors ◽  
Double Entry

What are the purposes of accounting? How do these purposes affect how accounting works? What is double-entry bookkeeping? ‘The international evolution of accounting’ considers these questions and outlines some examples of how different countries have contributed to the development of accounting. Double-entry bookkeeping, conceived in thirteenth-century Italy, balances the debits and credits. It enables the calculation of profit and the presentation of a business's financial position. Publication of accounting information is required to protect shareholders and creditors from potential malpractice by company directors. The globalization of world business has resulted in International Financial Reporting Standards, now used by around 90 countries. The US use their Financial Accounting Standards Board's ‘generally accepted accounting principles’.

scholarly journals Accounting Profession Is Ready For International Financial Reporting Standards: Financial Statements Comparable Enough

2010 ◽  
Vol 26 (6) ◽  
Author(s):  
Dahli Gray
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
The Other ◽  
Matched Pairs ◽  
Accounting Firms ◽  
The Road ◽  
Financial Reporting Standards ◽  
Big 4 ◽  
And Training ◽  
Us Gaap

Comparative analysis of three matched pairs of corporations revealed that there are more similarities than differences where one used IFRS and the other used US GAAP. "mso-spacerun: yes;"Since US GAAP focuses on usefulness of information rather than uniform reporting, the use of IFRS is just another variation on a theme that has existed for decades. The Big 4 accounting firms provide guidance and training for practitioners, professors and students that ease the road to understanding.

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