...Accounting Standards Building international opportunities for Australian business Corporate Law Economic Reform Program Proposals for Reform: Paper No. 1 © Commonwealth of Australia 1997 ISBN 0 642 26110 5 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Australian Government Publishing Service. Requests and inquiries concerning reproduction rights should be directed to the Manager, Commonwealth Information Services, Australian Government Publishing Service, GPO Box 84, Canberra ACT 2601. The Government is seeking comments from interested parties on the detail of the proposals in this paper which should be forwarded to the following address:| First Assistant SecretaryBusiness Law DivisionThe TreasuryParkes PlacePARKES ACT 2600|Telephone:Fax:Email:|02 6263 396002 6263 2882clerp@treasury.gov.au| Copies of this paper are available from the Australian Government Publishing Service and on the Treasury web site (http://www.treasury.gov.au).Enquiries concerning the paper can be made to:Ms Veronique IngramAssistant SecretaryThe TreasuryTelephone: 02 6263 3970| Printed by the Australian Government Publishing Service Table of Contents Page Abbreviations v PART 1: Reform Proposals 1 PART 2: Introduction 9 2.1 Background 9 2.2 Key economic principles 10 PART 3: The Case for Reform 11 3.1 Impetus for reform 11 3.2 What the Government is seeking...
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...Accounting Standards Boards Paper Jacobian Stephens ACC/541 June 29, 2015 Mrs. JoEtta Malone Accounting Standards Boards Paper The Financial Accounting Standards Board (FASB) started the Convergence program back in 2002 and stated that a three-part strategy for seeking greater comparability in accounting standards internationally should be implemented.. FASB sought out to develop a higher quality for Generally Accepted Accounting Principles (GAAP) standards and improve the relations and communication with additional nationwide standards setters. The convergence program is to help increase the quality of recording standards. FASB and IASB recognized that increasing the comparability of principles will not be as easy as they thought. To do so, they will need the help of setters around the world to have an agreement amongst the standards. We also have to remember that FASB priority is to improve financial reporting. Doing so will help investors. Eliminate any other alterations between IFRSs and U. S. GAAP that may remain on January 1, 2005 by undertaking projects that both Boards would address simultaneously. Carry on the progress on the joint projects presently proceeding. Inspire their consistent interpretative bodies to organize their activities. FASB has been the nominated union in the private division for generating standards of financial bookkeeping that administer the training of financial reports by non-governmental entities. To improve and establish principles...
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...Accounting Standard Boards Paper ACC/541 September 09,2013 Heber Howard Accounting Standard Boards Paper In the business of accounting two boards stand out the first one is the International Accounting Standards Board (IASB), and the second is the Financial Accounting Standards Board (FASB). The two boards are putting together this joint adventure to have a universal standard recognized internationally by entities for reporting of financial statements. This adventure will help to ensure that reporting of financial information is consistent globally and in the United States. The adventure will also help investors, stakeholders, the public, and financial institutions to read the financials in a clearer format. This paper will provide a brief understanding of the two boards joint adventure referred to as the convergence project. After discussing the relationship between the two boards along with the equivalents of the FASB original pronouncements, the paper will explain briefly how the MSA program prepares students for a professional life within the accounting vocation and how he or she will be able to make ethical business decisions. IASB and FASB The IASB is an independent regulatory body based in the United Kingdom, which aims to develop a set of global accounting standards (Investopedia, 2013). The IASB has 14 board members 12 are full-time and two are part-time and was established in 2001 as the successor to the International Accounting Standards...
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...Will there be one set of accounting standards in use throughout the world in the next five years? As American companies continue to expand their businesses abroad, the need for a single set of accounting standards is growing. Currently there are about 12,000 companies that are operating in more than 100 countries, each of which requires their financial statements to be reported under the same guidelines and standards. All of these countries abide by the International Financial Reporting Standards, making it easier for companies abroad to have financial cohesion. Unfortunately the United States has yet to adjust their financial standards, but many feel this necessary change is coming. Signs of a possible change arose when the SEC approved the use of International Financial Reporting Standards by non-U.S. registrants as long as they included reconciliation between the IFRS and the U.S. GAAP standards. Further signs of change arose when the SEC dropped this reconciliation requirement only a year after enacting it. As the SEC is noticing, the need for a uniform financial standard is not only growing but it is a necessary change as there is many advantages to having one set of accounting standards. One of these advantages is that having one global set of accounting standards will eliminate the costs of preparing multiple financial statements under various standards. Another advantage is that this will also reduce the need for multiple audit opinions that multinational firms...
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...International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have a common relationship that is always evolving. There are several different items that have to be looked at before changes can be made. Due to changes in accounting practices, both boards have to take many things into account. They deal with companies worldwide, so they have to take a look at the customs for each country along with different accounting methods and economic differences as well. The Convergence Project involves both entities and tried to eliminate differences between the United States General Accepted Accounting Practices (GAAP) and International Financial Reporting. The Financial Accounting Foundation (FAF) formed the FASB in 1973 to try to correct accounting practices for nongovernmental businesses. The board was formed due to complaints of the Accounting Principles Board (APB). Two committees were created to handle some of the complaints. The Wheat Committee was responsible for studying how financial accounting principles would be formed. The Trueblood Committee was created to find a way to verify financial statements. The American Institute of Certified Public Accountants (AICPA) decided to implement the suggestions of the Wheat Committee. The FASB was also to be considered the official board to issue standards for financial accounting. The International Accounting Standards Committee (IASC) was the first organization formed to set accounting standards for multinational...
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...The International Accounting Standards Board (IASB) is an independent group that was founded in 2001, and the IASB sole purpose is to develop international accounting standards. The have four principles that must be followed, which define an objective of financial statements; identify characteristics to make the information useful; define financial statements; and the concept of capital maintenance (Cellucci, R. 2011). Essentially, the IASB wants multinational corporations to practice the same methods of preparing their financial statements so that there would not be any misinterpretations when reviewing these documents. For instance, if ABC corporation operates in multiple nations, each country will have a different methods when preparing financial statements. This could potential lead to confusion and misunderstanding among anyone reviewing these documents, there is also potential that the information could be misrepresented hindering the company from receiving loans. The goal of the IASB is to step in with the proper procedures and to create a uniform method of accounting procedures. This will create transparency, and eliminate any negligence from operating in different countries. The Financial Accounting Standards Board (FASB) was founded in 1973 with the sole purpose of establishing and improving standards of financial accounting. FASB wants to provide accurate and useful information to investors and other viewers (FASB. 2011). The FASB is recognized only in the United...
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...new or changed standard, how it is approved and also the way in which the objective of financial reporting was changed. A new standard arises because it is realized that certain aspects of the framework need to be tightened up or made clearer, which means reporting becomes easier. A lot of the time changes are made to existing standards, rather than drafting a whole new standard. A new standard comes about via a process set out in paragraph 31 of the constitution. Firstly an exposure draft must be published by the international accounting standards board. This is a preliminary release of a statement, which presents the text of the proposed statement for comment by the public. Public hearings are held to discuss the proposed standard. However standards can be set without holding public hearings. The public are made well aware of any considerable changes to international accounting standards, this is largely through the Internet on the IASB website, where they broadcast all meetings. These meetings are closely followed by interested parties, who can give feedback on the proposed new IAS. The minimum period between application and approval of a new standard is one year. The International financial reporting interpretations committee (IFRIC) has the final say on the approval of the new standard. The committee comprises of 14 members, who have the best available technical expertise internationally. Each member gets one vote and for the approval of a new standard it is required...
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...ACCOUNTING STANDARD-2: ACCOUNTING STANDARD -2 VALUATION OF INVENTORIES PURPOSE: PURPOSE Specifies the principals for valuing the inventory. Disclosure of the specific policies adopted by the management for the valuation of inventory. SCOPE: SCOPE This statement should be applied in accounting for inventories other than : Work in progress arising under construction contracts, including directly related service contracts. Work in progress arising in the ordinary course of business of service providers. Shares, debentures and other financial instruments held as stock-in-trade; And. Producers’ inventories of livestock, agricultural and forest products, and mineral oils, ores and gases to that extent that they are measured at net realisable value in accordance with well established practices in those industries. RELEVANT DEFINITIONS: RELEVANT DEFINITIONS Inventories are assets : held for sale in the ordinary course of business. in the process of production for such sale. in the form of materials or supplies to be consumed in the production process or in the rendering of services. Net Realisable Value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated cost necessary to make the sale. VALUATION: VALUATION Inventories should be valued at the lower of Cost and Net Realisable Value . The Practice of writing down inventories below cost to Net Realisable Value is consistent with the view that assets...
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...there be one set of accounting standards in use throughout the world in the next five years? Currently many countries have been using Accounting guidelines based on the International Financial Reporting Standards (IFRS) these are managed by the International Accounting Standards Board (IASB). The United States holds companies accountable to Accounting Guidelines maintained by the Financial Accounting Standards Board (FASB) which issues the Generally Accepted Accounting Principles (GAAP) in the U.S. markets are overseen by the Securities and Exchange Commission (SEC). The United States Financial Community is actively looking at the possibility to transition to one global accounting standard; One step towards future adoption is the SEC has recently allowed foreign firms to file reports that conform to IFRS standards rather than mandating they prepare documents using GAAP. (Kimmel, Donald , and Jerry, 64) In July 2012 the SEC’s Office of the Chief Accountant released report outlining the SEC’s reviews of IFRS standards against GAAP standards to identify gaps. While the SEC did not make a recommendation on adoption in the future it was a first step in preparing for an eventual decision. What was found is that while IFRS is a comprehensive standard there are still steps that must be taken before the U.S. can adopt the standards. (PwC) In 2006 the FASB and IASB started work on reconciling the two policies and identified 12 areas in which the IFRS standards differ from GAAP...
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...The Marketing of Accounting Standards The article “The Marketing of Accounting Standards” by Charles T. Horngren speaks of the decentralization of the Accounting Principles Board. He describes the institutional structure of the APB, speaks of the decentralization management, and the problems facing FASB. The institutional structure of the APB is decentralized, as previously mentioned, which leads to an “informal” organizational relationship. Horngren believes the APB folded because of institutional forces rather than internal disintegration (Horngran 61). He states that in politics Congress has the ultimate power, but delegates some of it to the SEC. In turn, the SEC delegates much of this power to the APB. He speaks of the SEC as a “top management” where they adopt decentralization because lower management, the APB, is believed to have more information and ability to make decisions. With this statement though, Horngren received criticism from an SEC member stating they have a “partnership,” (Horngren 62). Horngren believes that, “the need to study how the exercise of power affects the acceptability of accounting standards,” (Horngren 63). Working as a decentralized management has proven to be difficult as well. The issue with marketable securities is one example. Three issues have occurred: recognition of portfolio gains and losses, do the portfolio gains and losses belong in the income statement, and if market values are disclosed in the balance sheet than there’s...
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...implementation of International Accounting Standards Theodosia Leventi Department of Business Administration, T.E.I. of Larissa, Greece leventi@teilar.gr Abstract This paper belongs to the category of literature review. In this descriptive article we take a brief look at the impacts of the implementation of International Accounting Standards. The continued globalization of business has led to the development of internationally applicable standards and codes of practice. The remarkable expansion of international trade and business, the international co-operation among countries and the breaking down of national barriers led to new challenges and new problems too. Problems in the analysis and comparison of financial reports and differences in auditing and taxation practices among countries made necessary the application of International Accounting Standards. Harmonization of this practice in order to get closer to a universal accounting language is affected by many factors such as: economic, financial, social, legal, cultural, political and others. Moreover, the level of preparedness for each country is significantly associated with many other factors. This process, as every new measure, had both positive and negative effects. So, this study highlights the advantages and disadvantages of adopting a uniform set of International Accounting Standards worldwide and also examines their volatility effects. Keywords: International Accounting Standards, Adoption, Positive and ...
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...economic policies and reforms as well as the accounts standards. (International monetary fund, 2014) http://www.imf.org/external/pubs/ft/med/2003/eng/abed.htm "Challenges of Growth and Globalization in the middle East and North Africa by George T. Abed and Hamid R. Davoodi." Challenges of Growth and Globalization in the middle East and North Africa by George T. Abed and Hamid R. Davoodi. International Monetary Fund, n.d. Web. 10 Apr. 2014. <http://www.imf.org/external/pubs/ft/med/2003/eng/abed.htm>. JORDAN The government of Jordan has adopted IFRS in may 15th,1977 by passing Company Law No.22 which came into effect after thirty days of its issue. The Public companies were informed to classify their accounts according to the International Financial Reporting Standards. (IFRS, 2011) Egypt The companies in Egypt were monitored by the IFRS until the Capital Market Law passed in 1992 which obliged all the registered companies to follow Egyptian Accounting Standards set by ministry of Finance. The Central Bank made it mandatory for all the Banks to follow the EAS.However, as per the current report, the Egyptian companies are known to be adopting IFR standards. (IFRS, 2011) Saudi Arabia Saudi Arabia follows the strict regulation of Islamic law known as sharia. However In 2007 Saudi Arabian Monetary agency joined the technical committee of the International Financial Standard board in order to improve the its accounting standards. The following year all the companies registered...
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...Country Differences in Accounting Standard Ashford University BUS 616: International Business October 21st, 2013 Country Differences in Accounting Standard International Accounting Standard Board (IASB) is the standard agreed upon by the European Union for the financial reporting of all publicly traded companies on the European stock exchange (Hill, 2011). The United States currently uses the Generally Accepted Accounting Principles (GAAP), but has aligned some of its principles to those of the IASB (Ernst and Young, 2010). This paper will look at the benefit of adopting the IASB from an investor and business standpoint. The paper will examine the potential risk associated with adopting the IASB. The paper will also determine which nation the move will cause a revision of its reported financial performance of business enterprise, The United States or China. What are the benefits of adopting international accounting standards, for (a) investors, and (b) business enterprises? The benefits of adopting the international accounting standard for an investor, is the fact that the standard allows for a more transparent reporting, which will allows an investors to make a solid informed decision (Ernst and Young, 2010). The benefit for a business enterprise is the fact that the financial statement will show irregularities sooner than later, giving the company the opportunity to correct the problem before its wide spread...
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...current requirements even in the short term. The US standard setter, the Financial Accounting Standards Board, is also undertaking a concurrent project on financial instruments and the IASB has acknowledged that this will see further changes to IFRS 9 before its mandatory application date. The treatment of financial liabilities also remains a contentious area and was dropped from IFRS 9 very late in the process. “The IASB has grappled with the concept of how an entity’s own credit risk should impact the measurement of liabilities. The idea that an entity should make a gain from a decline in its own credit worthiness has been the source of much debate.” The IASB is concurrently considering other issues in financial instrument accounting, particularly hedging and impairment. Ms Hankey noted: “The unfinished business in financial instrument accounting is likely to meet significant resistance from preparers – again the challenge for the IASB is to develop a principle-based accounting framework reflecting commercial realities.” So what does this mean for global accounting standard setting? “The current uncertainty in global accounting standard setting is very unhelpful to preparers trying to plan for the future and take advantage of the promise of a single set of high quality accounting standards,” said Ms Hankey. “The IASB should survive this current challenge, but it may be wounded and the push towards global accounting standard setting may well suffer. Our clients are looking...
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...All ACCOUNTING STANDARDS Accounting Standards are the defined accounting policies issued by Government or expert institute. These standards are issued to bring harmonization in follow up of accounting policies. Presently, Institute of Chartered Accountants of India has issued 29 Accounting Standards as listed below. AS 01. AS 02. AS 03. AS 04. AS 05. Policies AS 06. AS 07. AS 08. AS 09. AS 10. AS 11. AS 12. AS 13. AS 14. AS 15. AS 16. AS 17. AS 18. AS 19. AS 20. AS 21. AS 22. AS 23. AS 24. AS 25. AS 26. AS 27. AS 28. AS 29. Disclosure of Accounting Policies Valuation of Inventories Cash Flow Statements Contingencies and Events Occurring After the Balance Sheet Date Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Depreciation Accounting Construction Contracts Accounting for Research and Development (Not Applicable now) Revenue Recognition Accounting for Fixed Assets Accounting for the Effects of Changes in Foreign Exchange Rates Accounting for Government Grants Accounting for Investments Accounting for Amalgamation Accounting for Retirement Benefits in the financial Statements of Employers Borrowing Costs Segment Reporting Related Party Disclosure Leases Earning Per Share Consolidated Financial Statements Accounting for Taxes on Income Accounting for Investments in Associates in Consolidated Financial Statements Discontinuing Operations Interim Financial Reporting Intangible Assets Financial Reporting of Interests in Joint Ventures Impairment of...
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