An analytical study on impact of international financial reporting standards on financial statements and ratios of Indian companies

India is one of the emerging economies in the world. For economic development, foreign direct investment (FDI) is needed, to facilitate the investment climate. There is a need to integrate its financial reporting with rest of the economies of the globe so that investors from outside will appreciate the financial results and financial positions of the companies. This will provide uniformity and comparability of financial statements with the financial statements prepared in other countries. At present, Indian companies are preparing their financial statements as per Generally Accepted Accounting Principles in India (Indian GAAP). These Principles are based on IFRS issued by International Accounting Standard Board (IASB). However, these principles were modified substantially as per Indian laws and practices.

Accounting for crypto-assets: stakeholders’ perceptions

Purpose The purpose of this paper is to analyse stakeholders’ perceptions on the accounting of crypto-assets. They also look at the need to amend/clarify existing accounting standards or develop new accounting standards. Design/methodology/approach The authors use a qualitative approach featuring interviews with four stakeholder groups including academics, professional bodies, standard setters and accounting practitioners. Interview recordings are transcribed and then analysed through NVivo. Findings The interviewees identify various issues in the application of current accounting standards to crypto-assets. The interviewees perceive that the rapid development of crypto-assets and fluidity hinder the development of accounting guidance. Hence, continuous monitoring by standard-setters is required. The general consensus is that unless there are crypto-assets with economic characteristics and functionality that are pervasive enough to warrant a new accounting standard, principles of current accounting standards are robust to address gaps in accounting requirements for crypto-assets. Originality/value This study adds to the discussion on harmonising the current practices in accounting of crypto-assets. By examining perceptions of multiple stakeholder groups, this study provides insights into the applicability of current accounting standards to the classification, measurement and disclosure of crypto-assets. The findings will inform standard setters and aid their efforts towards providing formal guidance on the accounting of crypto-assets.

Federal Accounting Standard (FSBU) 5/2019 – Inventories: An investigation of commodity operations during forensic auditing

Subject. This article focuses on accounting expertise that holds a unique position in the system of effective economic crimes and infringement prevention. Objectives. The article aims to identify the impact of the new Federal Accounting Standard (FSBU) 5/2019 – Inventories on the procedure for conducting a forensic accounting examination of commodity transactions in trade. Methods. For the study, we used a comparative analysis, systematization, induction and deduction. Results. Based on the research results, the article proposes a definition of the subject of forensic accounting examination of commodity transactions, and it reveals that the introduction of FSBU 5/2019 – Inventories into accounting practice contributed to the emergence of such examination objects as the fair value of goods and their impairment. The article also proposes to use in the activities of a forensic expert accountant the author-developed algorithms for conducting expert examinations. Conclusions and Relevance. The implementation of FSBU 5/2019 introduces new objects of forensic accounting examination of commodity transactions in trade, so the proposed algorithms for expert examination will contribute to optimizing the activities of the forensic expert accountant. The results of the study can be applied both in the theory and practice of forensic economic expertise.

Fawn and deer: a public institution’s biological assets valuation

Study level/applicability The teaching case is designed to be used by students in higher education institutions at the undergraduate level. This case may also be relevant for staff at the bursary departments of any public universities or public organizations that have biological assets. Case overview This case provides a study on agricultural activity at Universiti Pengurusan Malaysia (UNIPM). The purpose of this case is to create greater awareness for case users on the accounting framework and on methods recommended for recording specific assets in agricultural activity, i.e., biological assets. This case provides users with experience in explaining the nature of an organization’s agricultural activities and accounting for biological assets as recommended in the Malaysian accounting framework. In addition, users are exposed to some current issues in accounting standards, such as ethical issues. In this case, Fakhrul, an accountant at UNIPM and a leader of the Asset Unit, was responsible for reporting the value of all UNIPM’s assets, including biological assets. He was instructed to accurately recognize, measure, and disclose the value of biological assets according to the appropriate accounting standard. Furthermore, UNIPM had been urged to replace the existing accounting standard of the Malaysian Private Entity Reporting Standard (MPERS) with the Malaysian Public Sector Accounting Standard (MPSAS). Fakhrul was considering how to account for and report biological assets according to the new MPSAS. This case is a decision making or ‘unfinished’ case which is suitable for financial accounting and reporting courses. The names of the people and the university are fictitious, but the details were based on actual events. A series of interviews were conducted with the key players to gather the data. Other useful documents such as the university’s annual report, university’s website and the deer reports were also referred. Expected learning outcomes The primary objective of this teaching case is to provide an opportunity for case users to understand both the accounting framework and the methods recommended for recording specific assets in agricultural activity. More specifically, the teaching objectives of this case are to achieve the following learning outcomes: to identify the relevant accounting standard for recognizing, measuring, reporting, and disclosing biological assets by public universities in Malaysia, to apply the appropriate accounting treatment in recognizing, measuring, reporting, and disclosing biological assets in accordance with the appropriate accounting standard for public universities in Malaysia and to understand the ethical issues involved in deer valuation methods. Supplementary materials Teaching notes are available for educators only. Subject code CSS 1: Accounting and finance.

The Revenues: Changes in the Registration of This Accounting Item in Italy

In November 2021, the .Italian Accounting Board (OIC) issued a draft accounting standard concerning revenues accounting (draft accounting standard OIC 34 The Revenues). The standard sets out some exciting observations that can potentially apply in Italy and other countries that accept the considerations set out in the draft. In the article, the focus will be on what is imposed on medium and large-sized companies.

New Accounting Framework Faces Its First Test: CECL During the Pandemic

On January 1, 2020, most large and mid-sized U.S. banks adopted Current Expected Credit Losses (CECL), a new accounting standard for estimating allowances. Allowance for credit losses is an estimate of the amount that a bank is unlikely to recover from a financial asset.

Executive equity incentives and opportunistic manager behavior: new evidence from a quasi-natural experiment

This study provides plausible causal evidence on the effect of executive equity incentives on opportunistic manager behavior. I exploit a unique setting created by the introduction of Financial Accounting Standard (FAS) 123R in 2005, which led to an exogenous increase in the cost of option pay, causing a substantial decline in option pay for some firms while leaving others largely unaffected. Using difference-in-differences analyses with a treatment group of firms that show a decline in option pay and two control groups, I find that the likelihood of a treatment firm meeting or beating analyst forecasts decreases by 14–20%. The results show that the relatively high levels of meet-or-beat before FAS 123R were largely driven by real activities manipulation such as abnormal asset sales and sales manipulation to beat analysts’ benchmarks, while accrual manipulation and analyst management were less relevant. Together, the results suggest that equity incentives encourage opportunistic actions to meet or beat earnings expectations, and a decline in option pay results in a decline in earnings management to meet earnings expectations.