...When we say German GAAP, we refer to principles that are based on German Commercial Code (Nandelsgesetbuch, or HGB), and German Accounting Standards (GAS) that are set by German Accounting Standards Committee (GASC). GASC has similar function as Financial Accounting Standard Board (FASB) in United States – to develop and set accounting reporting standards, the process which includes publication of draft of standards, comments period, revision of draft period, public discussion, and finally, adoption of new standards. Germany has two entitles that serve as an enforcement mechanism of financial standards and as a mechanism that review and examine accounting standards in Germany – Financial Reporting Enforcement Panel (FREP) and Federal Financial Supervisory Authority (FFSA). In United States, enforcement mechanism of accounting principles is U.S. Securities and Exchange Committee (SEC). SEC’s mission is “to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation”, so the enforcement of accounting principals is only part of the SEC’s job (SEC, 2014). IFRS or German GAAP? Although Germany requires to use IFRS for publicly traded companies, German companies still have to use GAS for separate financial statements of publicly traded companies, and for any non-publicly traded company. That is because German taxation system is interconnected with GAS, and German tax law have not been renewed to reflect changes brought by IFRS. While modernization...
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...| Worldwide accounting diversity | | | ACIB 872 | Assignment 2 | | Submitted By: Samer Alroujayee | | | Worldwide accounting diversity Assignment 2 Q1) CALLAWAY GOLF SUDZUCKER AG CEMEX S.A.B SOL MELIA SA THAI AIRWAYS B) It is not valid to calculate the profit margin for all the companies above due to the differences in financial reporting systems. The format, level of detail and terminology used in the financial statements are different from one company to another. Q2) As per CALLAWAY GOLF’s site “http://media.corporate-ir.net/media_files/irol/68/68083/AR2011/HTML2/callaway_golf-ar2011_0077.htm” And as per SUDZUCKER’s site “http://ir2.flife.de/data/sudzucker/igb_html/index.php?bericht_id=1000002&lang=ENG” A. As we look at CALLAWAY GOLF COMPANY (US Company) they follow the U.S accounting system GAAP. SUDZUCKER AG (GERMAN COMPANY) on the other hand, they follow German accounting system. B. Yes, by looking at both companies, they both have the following: 1. Consolidated balance sheet 2. Consolidated income statement 3. Consolidated cash flow statement C. The differences are: In CALLAWAY GOLF (US COMPANY) Operation Statement, it mentions the cost of goods sold in one line. While in SUDZUCKER (GERMAN) it lists the expenses in details such as expenses of personnel, cost of materials and depreciation. D. In CALLAWAY GOLF (US COMPANY), it lists the assets and liabilities on the balance sheet in order...
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...Advances in Accounting, incorporating Advances in International Accounting 29 (2013) 124–133 Contents lists available at SciVerse ScienceDirect Advances in Accounting, incorporating Advances in International Accounting journal homepage: www.elsevier.com/locate/adiac Continental European accounting model and accounting modernization in Germany Andreas Hellmann ⁎, Hector Perera 1, Chris Patel 2 Department of Accounting and Corporate Governance, Faculty of Business and Economics, Macquarie University, Sydney, NSW 2109, Australia a r t i c l e i n f o Keywords: Convergence German Commercial Code (Handelsgesetzbuch) International Financial Reporting Standards Act to Modernize Accounting Law (Bilanzrechtsmodernisierungsgesetz) Classification of accounting systems a b s t r a c t Classification techniques based on one or few dimensions are widely used in research studies and textbooks to explain and predict the development of accounting systems internationally. However, their usefulness in international accounting has been limited in today's globalized world. For example, in the context of the EU, IFRS are required for consolidated accounting, while national accounting systems continue to be the dominant system for unconsolidated accounting in many countries. Using Germany as a case study, the objective of this paper is to examine whether Germany can still be classified within the Continental European model of accounting following the Act to Modernize...
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...no control over the exchange rates. If the exchange rates were favorable and continuously increased over the month, I do not think Cooper Grant should get more of bonus in that instance because the USD pretax income could increase significantly. Exercise 4: a. As of 12/31/13, there are 520 foreign issuers from 46 countries. b. The 5 countries with the largest number of foreign companies listed on the NYSE are as follows: i. Canada ii. China iii. United Kindgom iv. Brazil v. Bermuda c. Non-US companies have an increasing market share in the United States and benefit from listing shares on the NYSE. Case 1-1 The first international accounting issue Besserbrau encounters is foreign exchange risk. Besserbrau, a German company, imports one ingredient from a company in the Czech Republic. The currency for Germany is the EURO (EUR) and the currency for the Czech Republic is the Czech Koruna (CZK). Besserbrau could have increased translation gain or loss depending on the fluctuation of the EURO to CZK...
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...B KEY TERM and WHY YOU ARE INTERESTED IN IT My focus country this semester is Germany. The German culture I believe is responsible for their success even after being beaten and bankrupt in two world wars. I chose dimensions of culture to help me investigate the differences in culture between Germany and other European countries who are struggling. EXPLANATION OF THE KEY TERM According to Satterlee (2014, p. 43) “The dimensions of culture may be categorized as Communication, Religion, Ethics, Values and Attitudes, Manners, Customs, Social Structures and Organizations, and Education”. In the late 1960s and early 1970s an IBM sociologist named, Geert Hofstede, studying the diversity of his company, concluded that aside from individuals, a country can have a culture or personality that can be scored and compared with other countries. His theory of cultural dimensions includes only five categories: Power distance, Individualism, Masculinity, Uncertainty Avoidance and Long Term Orientation (Dimensions of national cultures, 2015). MAJOR ARTICLE SUMMARY The article I selected is from the December, 2011, issue of the journal Online Reading in Psychology and Culture: International association of Cross-Cultural Psychology. The article is titled, ‘Dimensionalizing Cultures: The Hofstede Model in Context’ by Geert Hofstede. The article begins with Mr. Hofstede describing his work at IBM. In the 1967 to 1973 time period, Mr. Hofstede was given access to a large database...
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...Overview of German management and practices The German style of competition is rigorous but not ruinous. Although companies might compete for the same general market, as Daimler-Benz and BMW do, they generally seek market share rather than market domination. Many compete for a specific niche. German companies despise price competition. Instead, they engage in what German managers describe as competition on the basis of excellence in their products and services. They compete on a price basis only when it is necessary, as in the sale of bulk materials like chemicals or steel. German management, as it has evolved over the centuries and has established itself since World War II, has a distinct style and culture. Like so many things German, it goes back to the medieval guild and merchant tradition, but it also has a sense of the future and of the long term. Managers in Germany are expected to be technically capable in their respective areas and to show strong, clear leadership. Although disagreement with a superior will rarely be seen in public this does not mean that Germans are 'Yes' men. Subordinates tend to respect the technical abilities of their superiors and this will impact on their willingness to implement instructions. (The interesting corollary of this is that when less technically proficient non-Germans are asked to manage a team of Germans, the non- German can sometimes be seen as lacking the key prerequisite for developing the team's respect.) Responsibility is expected...
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... Student ID 3247960261 Accounting Capstone: Senior Seminar in Accounting ACC 499 005016 Winter Semester 2008 Submitted to Professor Tee Thein March 16, 2008 Dedication and Acknowledgement I would like to take this time to thank my husband, George, for all his support over this last ten weeks. For graciously doing the laundry, vacuuming, dusting, grocery shopping, meal preparing, and dishes so I had time complete the needed research for my paper. I appreciate the sacrifices you made to support me in my efforts of obtaining a Bachelors Degree in Accounting. Table of Contents Page Abstract 5 Chapter 1: Introduction 6 1.1 Background 6 1.2 Problem 7 1.3 Purpose 7 1.4 Scope 8 Chapter 2: Review of Literature 9 Chapter 3: Methodologies 12 3.1 Perspective 12 3.2 Research Procedure 12 Chapter 4: Development of Accounting Principles 17 4.1 History of Accounting Differences 17 4.1.1 Ancient Recordkeeping 17 4.1.2 Double-Entry Accounting 19 4.1.3 Beyond the Industrial Revolution 19 4.2 Influences on Accounting Standards 20 4.2.1 Culture 21 4.2...
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...Final Paper Anthropology 101 Introduction to Culture The world we live in is diverse from each corner of it. To look closer into this world one would even have to examine a culture of people. One thing interesting about our diverse world is something as simple as how healthcare is provided in different regions of the world. Do you believe there is a difference in healthcare in different parts of the world? Well there is quit a complex difference. For example, I’ll explain the healthcare provided in India is quite different from the healthcare provided in Germany. The differences can be viewed or evaluated in different means. For the purpose of this discussion three main factors will be identified and compared. The quality of life in contrast to healthcare provided, the foreseen future impact of the aging population, and the economic impact on the individual society. I will exam and compare the current of future of health care in the India and German societies. Healthcare is important to all in every corner of the world. In some societies healthcare is better than others. Germany has been known for years as a strong society and have always been on the tip of the spear when it comes to technology. To contrast, Germany has make social mistakes in the fast and has not always been in the best light of the world for how they treat the human race as a whole. On the other hand India has been viewed as a very rich cultural society, strong in religious faith. India, does not come...
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...Merging of numerous national generally accepted accounting principles with the International Financial Reporting Standards (IFRS) guarantees reliable and comparable financial information that will help investors in making the best investment decisions. Many countries and the International Accounting Standards Board plan to implement or converge with the International Financial Reporting Standards with a goal of comparing uniformed financial statements across countries. Having uniform standards for accounting worldwide not only would make it easier to compare financial statements, but it will coordinate the free movement of debt and equity capital worldwide. (Mukoro & Ojeka, 2011) Hofstede defined culture as, “the collective programming of the mind which distinguishes the members of one human group from another” (Gray, 1988). Hofstede went on to explain that “culture” is society at large or entire countries, while a “subculture” is used for a level of personal, professional, and organization. The amount of culture integration may vary from society to society, but most subcultures within a single society have similar characteristics (Gray, 1988). Hofstede identified four major types of societal/cultural characteristics. They are individualism versus collectivism, power distance, uncertainty avoidance, and masculinity versus femininity (MacArthur, 2006). In an individualistic society, individuals are independent of one another and self-sufficient whereas in a collectivist society...
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...practice? What is something you admire about this group’s people, lifestyle, or society? 1. The German Americans are the largest singles source of ancestry of individuals that are in the United States today. The German Americans settled in the United States in the late 1700’s, they came because of their religious dissenters such as the Amish who were attracted by the proclaiming of religious freedom. Even though the German Americans started coming in the late 1700’s it wasn’t until the 1830’s through 1890 the German immigrant population represented one quarter of the immigration. During World War I most of the German Americans distanced themselves away from their home land, by the ending of the twentieth century the animosity that was towards Germany fell distant. That is because of John F. Kennedy being in Berlin in 1963 and Ronald Reagan in 1987 and they both spoke of uniting Germany. Present days the immigration from Germany is between 5,00 and 10,00 annually. Some customs that the Germany Americans may practice still while in America would be their language. They would even continue to cook their dishes, and open up German bakery stores. Something that I admire of the German Americans would be that even though the Germans in their homeland did horrific things during World War I and World War II, they didn’t act upon it. They stayed true to themselves by being the German Americans they chose to be by coming to...
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...Chapter 3 Comparative International Accounting Systems and Practices * United States and United Kingdom as major countries in the context of the Anglo-Saxon culture area; * The Netherlands and Sweden as representatives of the Nordic countries; * Germany and Switzerland as representatives of the Germanic countries; * France and Italy as representatives of the developed Latin countries and; * Japan as a representative of the developed Asian countries. | ANGLO-SAXON ACCOUNTING * There is no doubt that Anglo-Saxon accounting can be distinguished from accounting in continental Europe. Asia. Latin America, and many other parts of the world. UNITED STATES * Influences on Accounting Development:In many ways, accounting in the United States and United Kingdom is very similar as might be expected given the importance of the historical and investment connections between the two countries. Just as the language and legal system were exported from the United Kingdom to the United States. | Cont.The securities markets are the dominant influence on accounting regulation in the United States. Dealings in securities and investor protection are regulated and enforced at the federal government level under the Securities Act of 1933 and the Securities Exchange Act of 1934, which were passed in response to the stock market crash of 1929 and subsequent financial crises. The Securities and Exchange Commission (SEC) was established with the legal authority to enforce the securities...
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...Executive Summary: Whole Foods was founded in 1990 with a mission to offer good, wholesome food with an emphasis on natural and organic food. Through a series of acquisitions and expansions Whole Foods is a major grocery store representing organic products in the United States, Canada and the U.K. It is consistently ranked in the top 100 best companies to work for and the top 100 best Corporate Citizens. Business Proposal: This document outlines the possibility of Whole Foods expanding into the German Market. Considerations are explored in the realm of German Culture, the Organic Food market, Competitors, Pros and Cons, Entry and Exit Strategy, and Human Resources strategy to declare whether or not Germany is an appropriate fit for Whole Foods. Whole Foods Entering Germany: Successful Whole Foods CEO John Mackey, is quoted as saying "If you want to be competitive in the long term, your business needs to have discovered its higher purpose and it needs to adopt a stakeholder philosophy." In a world where unhealthy food, rife with chemicals and saturated fats is becoming the norm; Whole Foods definitely seems to have found it’s higher purpose. Whole Foods, which is providing individuals with fresh organic food to promote a healthy lifestyle and a higher way of living is poised to spread this philosophy to the rest of the world. This stakeholder philosophy puts the ownership of healthy living on each and every one of us by providing the piece that has sorely...
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...environment:1. accounting is regulated by private-sector body(FASB), but government underpins the authority of its standards. 2. no legal requirement for the publication of FS3. each state has its own corporate statutes and not rigorously enforced. Reports rendered to local agencies are often unavailable to the public4. only listed companies have compulsory requrirements for FR at the federal level as specified by the SEC. | | | | Regulation environment:1. Dutch accounting presents several interesting paradoxes. The Dutch have relatively permissive statutory accounting and financial reporting requirements but very high professional practice stds. The Netherlands is a code law country, yet accounting is oriented toward fair presentation.2. Accounting and tax separate3. Dutch Civil Code includes 1970 Act of Annual Accounts. True and fair view required. | | STATUTORY CONTROL | | Regulatory environment:1. traditional society with strong cultural and religious roots.2. interdependence in personal and corporate relationships. (Low individualism)3. companies hold equity interest in each other, and often jointly own other firms. Eg. Keiretsu.4. Banks are often part of these industrial groups, there is a high degree of debt finance. Therefore, corporate managers must primary answer to banks and other financial institutions rather than shareholders.5. a strong bureaucratic control over business affairs and accounting. 6. Business culture a mixture of domestic and foreign.( German and US...
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...attempt to reform the Catholic Church.”(33). Germany became known as a nation state in 1871. “Traditionally, a nation state is a specific form of state, which exists to provide a sovereign territory for a particular nation, and which derives its legitimacy from that function.”(33). Following World War II, Germany divided into two separate states but then reunified again in 1990. Today, Germany is a member of the European Union.(EU). “The European Union is a political and economic community of twenty-seven member states, located primarily in Europe.”(33). The population of Germany is appoximately 82,400,996 and Germany has a population growth rate of -0.33%. Germany has the second largest population in Europe. Almost 92% of the people are German while the other 6% are made up of...
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...Political environment, which is more important especially large international business, requires high investment. More consumers sought after more goods, more service and besides last pay back time. The political systems have two types namely; democracy and totalitarianism. Economic environment, which is required in home country, host country and world economics, are supporting or objection for international business and relation to suppliers. Economic growth affects on politics social and lows, the found political system and situation politics in country, and the world has direct affects on economic and business. Social and culture are foundation of living and work for humans, they has an impact on characteristic to work and every day life. For lows, it is convention for country activities including economic activities and business. Therefore economics, political, social and lows are closely bound in terms of relationship. Technology environment refers to new knowledge factor in the world such as sciences or engineering and including strategic management because marketing competition enforce each country to invent new knowledge or know-how benefit for its own business development. Each country that has new knowledge must create new products; have low capital and high efficiency in order to keep pace with the international competitors and to respond the customers’ needs in the international market. When the country enters into international business, they must encounter...
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