scholarly journals International Harmonisation Of Accounting Standards: The Case For A Mandatory Requirement For The Direct Method Of Reporting Operating Cash Flows

2011 ◽  
Vol 3 (3) ◽  
Author(s):  
Christine Yap
Keyword(s):  
New Zealand ◽  
Cash Flow ◽  
Financial Reporting ◽  
Indirect Method ◽  
Direct Method ◽  
Accounting Standards ◽  
Cash Flows ◽  
International Accounting ◽  
International Accounting Standards ◽  
Operating Cash Flows

Even though standard setters have now embraced cash flow statements there remains ambivalence as to the best format (i.e. direct or indirect method) for disclosing cash flow from operations. In 1987 the FASB asserted that information about the gross amounts of cash receipts and cash payments is more relevant than information about the net amounts of cash receipts and payments. Yet apart from Australia and New Zealand, most standard setting bodies, including the International Accounting Standards Board (IASB), permit a choice between the direct and indirect methods. When given this choice, the vast majority of companies have opted for the indirect method of reporting operating cash flows (OCFs).This difference in OCF presentation between jurisdictions is relevant in this era of harmonisation of accounting standards: both the European Union parliament and the Australian Financial Reporting Council have decided to set 2005 as the target date for the adoption of standards produced by the IASB. Underlying this policy of verbatim adoption of international accounting standards, presumably is the belief that adoption of standards issued by the IASB would lead to an improvement in financial reporting. Such a view was presented recently when current Australian accounting standards were criticised as being deplorable by the Chairman of the IASB, David Tweedie (Australian Financial Review, 5 August 2003, p.1). Yet by reviewing the literature on cash flow statements, this paper argues that not all Australian standards would be improved by adopting international standards. In the case of cash flow reporting, maybe the IASB should review its standard and accept the lead of Australia and New Zealand, by not permitting choice of method and mandate the direct method: surely an intended consequence of harmonisation is to narrow areas of difference and variety in accounting practice.

scholarly journals A Research Note On The Issue Of Non-Articulation And The Method Used To Calculate Net Operating Cash Flow

2011 ◽  
Vol 25 (1) ◽  
Author(s):  
Terry J. Ward ◽  
Jon Woodroof ◽  
Benjamin P. Foster
Keyword(s):  
Cash Flow ◽  
Indirect Method ◽  
Direct Method ◽  
Accounting Standards ◽  
Cash Flows ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Font Size ◽  
Operating Cash Flow ◽  
Statement Of Cash Flows

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">Using a proxy for nonarticulation, prior researchers found evidence that many companies using the indirect method of reporting net cash flow from operations have a significant level of nonarticulation.<span style="mso-spacerun: yes;">&nbsp; </span>The purpose of this study is to determine if companies using the direct method of reporting net cash flow from operations experience significantly lower levels of nonarticulation than companies that use the indirect method of reporting net cash flow from operations.<span style="mso-spacerun: yes;">&nbsp; </span>Results show that companies using the direct method have significantly less nonarticulation than companies using the indirect method.<span style="mso-spacerun: yes;">&nbsp; </span>This finding suggests that the Financial Accounting Standards Board (FASB) should consider requiring companies to use the direct method of preparing the Statement of Cash Flows.</span></span></p>

scholarly journals A Conceptual Framework For The Indirect Method Of Reporting Net Cash Flow From Operating Activities

2010 ◽  
Vol 3 (12) ◽  
pp. 19-32
Author(s):  
Ting J. (TJ) Wang
Keyword(s):  
Conceptual Framework ◽  
Cash Flow ◽  
Indirect Method ◽  
Accounting Standards ◽  
Cash Flows ◽  
Financial Accounting ◽  
International Accounting Standards ◽  
Approach To Teaching ◽  
Statement Of Cash Flows ◽  
Cash Basis

This paper describes the fundamental concept of the reconciliation behind the indirect method of the statement of cash flows. A conceptual framework is presented to demonstrate how accrual- and cash-basis accounting methods relate to each other and to illustrate the concept of reconciling these two accounting methods. The conceptual framework recognizes additional categories of effects defined in the Accounting Standards Codification 230-10-45-28 and International Accounting Standards 7.18 (Statement of Financial Accounting Standards No. 95) in regard to the indirect method, which makes the concept of reconciliation between the accrual- and cash-basis more thorough and complete. The paper provides an approach to teaching the concept of the reconciliation of accrual- and cash-based accounting methods.

scholarly journals Lobbying na Regulação Contábil: Evidências do Setor Petrolífero

2014 ◽  
Vol 25 (65) ◽  
pp. 124-144 ◽  
Author(s):  
Odilanei Morais dos Santos ◽  
Ariovaldo dos Santos
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Status Quo ◽  
International Accounting ◽  
International Accounting Standards ◽  
Discussion Paper ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
International Accounting Standards Board

Este trabalho tem como objetivo identificar os fatores determinantes à submissão de cartas comentários, como estratégia de lobbying no contexto da regulação contábil, à audiência pública do Discussion Paper Extractive Activities do International Accounting Standards Board IASB).Os resultados mostram o tamanho como fator determinante, em todas as modelagens utilizadas, indicando que grandes empresas petrolíferas possuem maior probabilidade para realizar lobbying. Essa propensão é verificada para posicionamentos essencialmente desfavoráveis às propostas apresentadas pelo IASB, o que implica em considerar que a revisão/substituição do International Financial Reporting Standard -IFRS6 será um processo complexo e sujeito a pressões por parte das empresas petrolíferas para manter o status quo.

scholarly journals International Financial Reporting Standards and Orientation of Vietnam: “Roadmap & International Experience”

2018 ◽  
Vol 7 (4) ◽  
pp. 167
Author(s):  
Ha Thi Thuy Van ◽  
Vu Thi Kim Anh ◽  
Nguyen Dang Huy
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Asia Pacific ◽  
International Financial Reporting Standards ◽  
International Accounting ◽  
International Accounting Standards ◽  
Reporting Standards ◽  
Financial Reporting Standards ◽  
Advantages And Disadvantages ◽  
The World

Currently, the Ministry of Finance is implementing Decision 480/QD-TTG dated 03/18/2013 of The Prime Minister on approving the Strategy Accounting - Audit 2020, Vision 2030 and implementing the Resolution 35/NQ-CP of the Government dated 16.05.2016 related to the support and development of enterprises by 2020. Accordingly, the development and improvement the legal framework of Financial Reporting standards in Vietnam is one of the key tasks and urgent needs to be developed to meet the requirements of the economy in the period of integration. The system of International Accounting Standards, including the International Accounting Standards (IAS) and the standards of international financial reporting (IFRS) was issued, adjusted, updated and replaced by The International Accounting Standards Board. International Accounting Standards is an important condition to ensure that companies and organizations around the world can apply uniform accounting principles in the work of preparing and presenting financial statements. Currently, many countries around the world such as USA, Japan and European countries, Asia Pacific are approaching IFRS convergence trend. In the trend of globalization of accounting, Vietnam will not be outside the process of integration with the system of International Financial Reporting Standards. This article will review the process of formation and development of IFRS, the IFRS trends and the advantages and disadvantages of applying IFRS in Vietnam. 

scholarly journals Dilemmas of Financial Reporting as the Reliable Information Source of an Entity Performance Results

Equilibrium ◽  
2012 ◽  
Vol 7 (2) ◽  
pp. 77-95
Author(s):  
Joanna Zuchewicz
Keyword(s):  
Financial Reporting ◽  
Information Needs ◽  
Information Source ◽  
Accounting Standards ◽  
Global Market ◽  
International Accounting ◽  
International Accounting Standards ◽  
Financial Reports ◽  
Economic Entity ◽  
Basic Source

The objective of the hereby paper is to indicate, on the one hand, the need for transformations in financial reporting as the basic source of information about the financial situation of an economic entity indispensable in the decision making process by its users, and on the other to provide the analysis of the adopted reporting reconstruction directions validity, as suggested by international financial community. On the basis of comments and reservations presented by practitioners and the analysis of research conducted by scientific circles the thesis is put forward by the Author that the suggested extension of information scope to be disclosed in obligatory financial reports proposed by the authorities responsible for the preparation of international accounting standards will not increase the usefulness of information they include and will not influence higher security of business transactions. The paper is divided into there interrelated parts. The first presents the overview of critical opinions expressed by financial circles regarding accounting as the system generating information about the achievements of entities operating at the global market. The second refers to an entity stakeholders and their information needs. Irrespectively of opinions about the primacy of investors and their rights in making investment decisions it is of great importance to meet the needs of the remaining interest groups by means of providing both reliable and useful information in financial statements. The final part of the paper presents an outline of undertaken and suggested restructuring directions in financial reporting proposed by IASB and FASB, as the institutions responsible for preparing international accounting standards. This part also discusses the selected suggestions by Polish researchers regarding the form and content of particular components included in a financial statement.

An investigation of the level of compliance with international accounting standards (IAS 1) by listed firms in Bahrain Bourse

2016 ◽  
Vol 9 (2) ◽  
pp. 254-276 ◽  
Author(s):  
Fatema Ebrahim Alrawahi ◽  
Adel Mohammed Sarea
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Annual Reports ◽  
International Accounting ◽  
International Accounting Standards ◽  
Content Type ◽  
Listed Firms ◽  
Financial Reporting Standards ◽  
Industry Type ◽  
Regulatory Bodies

Purpose This study aims to investigate the association between seven firm-specific characteristics and the level of mandatory compliance with International Accounting Standards (IAS) 1 by firms listed on Bahrain Bourse. Design/methodology/approach A disclosure index is used to measure the extent of compliance with IAS 1. Each of the 36 sampled firms’ annual reports were examined against the index for the financial year ending December 31, 2013. Findings The results reveal an overall compliance of 83 per cent. Regression results report that only audit firm size, profitability and industry type have a positive and significant association with IAS 1 disclosure requirements. Practical implications This study should be particularly relevant to regulatory bodies in Bahrain for strategizing and encouraging compliance with IAS 1 by listed firms. Originality/value Additionally, the study contributes to financial reporting literature relating to the Gulf Cooperation Council countries, mainly Bahrain. Bahrain is a financial hub, and it is interesting to examine how it presents its financial statements to investors and the degree of its compliance with International Financial Reporting Standards since its adoption in 2007.

Arborista, Inc.: An Instructional Resource Case

2013 ◽  
Vol 28 (3) ◽  
pp. 681-690 ◽  
Author(s):  
Marc P. Picconi ◽  
Kimberly J. Smith ◽  
Alexander Woods
Keyword(s):  
Cash Flow ◽  
Direct Method ◽  
Cash Flows ◽  
Integrated System ◽  
Net Income ◽  
Managerial Accounting ◽  
Early Integration ◽  
Operating Cash Flows ◽  
Cash Flow Statement ◽  
Statement Of Cash Flows

ABSTRACT: This deceptively simple case is intended for use as early as the first day of an M.B.A. core accounting course or as a focused review for an undergraduate accounting course. It achieves three primary objectives: accelerating student learning about the statement of cash flows, emphasizing the importance of both the cash flow statement and the income statement in valuation and capital markets, and introducing the three primary financial statements as an integrated system. The case also features the use of the direct method of presenting operating cash flows, both as a pedagogical tool and to allow interested instructors to increase their focus on that method. We have found that students benefit from the early integration of the cash flow statement, as well as the ability to clearly understand how operating cash flows are similar to—and different from—net income. Finally, the case provides an optional managerial accounting module for instructors who teach a course that integrates financial and managerial accounting.

scholarly journals DEVELOPMENT OF INTERNATIONAL FINANCIAL FISCAL STANDARDS IN ACCORDANCE WITH THE ROLE OF IASB

2019 ◽  
Vol 3 (2) ◽  
Author(s):  
‏​‏​‏​​‏​‏​​‏​‏​‏​‏​‏​‏ Ali Murtadha Shaheen
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
International Financial Reporting Standards ◽  
International Accounting ◽  
International Accounting Standards ◽  
Reporting Standards ◽  
Financial Reporting Standards ◽  
Trading Volumes ◽  
International Accounting Standards Board

The objective of the research is to demonstrate the role of International Accounting Standards Board in the development of International Financial Reporting Standards to support the efficiency of international capital markets from 1973 to 2011, and then to measure the impact of the application of IFRS in accordance with the role of the International Accounting Standards Board. There have been differences in the market, volumes of the first and second markets and in the share price index, refer to market value, trading volumes yet trading volumes appropriate according to the software over International Financial Reporting Standards between the training on monetary statements of agreement stock companies.  

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