on the accounting standards set forth throughout the world in the global economy. The United States follows the Financial Accounting Standards Board (FASB) which has created a large number of accounting standards that are interpreted and accepted by international companies and by the International Accounting Board (IASB). The IASB plays a similar role like the FASB for the rest of the global economy. The IASB is located in London, England and is an independent, privately funded accounting standard-setter
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and Tom Tyson, explains that the two most widely recognized sets of accounting standards, namely Generally Accepted Accounting Practice in the US (US GAAP) and International Financial Reporting Standards (IFRS), address the measurement of non-financial assets differently, and compelling arguments exist in favor of each approach. Notes that, despite the challenges to auditing fair value estimates, some suggest that Financial Accounting Standards Board (FASB) should conform more closely to current IFRS
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................................................................2 Financial statement presentation......................................4 Interim financial reporting ................................................6 Consolidation, joint venture accounting and equity method investees .............................................................7 Business combinations ...................................................11 Inventory ...................................................................
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was to make accounting information useful and the two most important components of usefulness are faithful representation and relevance (p. 11). Below the 2013 Procter & Gamble Annual Report will be used to analyze the financial statements to determine P&G’s revenue recognition policy and the impact of trade promotions on their financial statements; to determine some specific examples of where they have chosen to use historical cost versus fair value; to determine their accounting policy as
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Prior to the Subprime Crisis, accounting standards allowed certain subprime-related debt to be kept off the balance sheets of financial institutions. If standards required subprime debt exposure to be included on balance sheets, it would have allowed a more transparent view into the financial health of a given institution. If such exposure were made public during the Housing Bubble, it may have had a sobering effect, turning the trend that dominated Wall Street away from a carefree hunger for risk
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the equity method of accounting for investments Chapter Outline I. Three methods are principally used to account for an investment in equity securities along with a fair value option. A. Fair value method: applied by an investor when only a small percentage of a company’s voting stock is held. 1. Income is recognized when dividends are declared. 2. Portfolios are reported at fair value. If fair values are unavailable, investment is reported at cost. A. Consolidation: when
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AC2101 – Accounting Recognition and Measurement Agenda for Seminar 1 A. Course introduction 1. Contents overview Seminars 1 to 3 Conceptual Issues Underlying Accounting Recognition and Measurement presented by 2. Assessment components & expectations 3. Administrative matters B. Conceptual overview 1. Purpose of accounting & its role in contracting 2. Concepts of recognition, measurement & disclosure in accounting Low Kin Yew Associate Professor Nanyang Business School Semester
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In 2002 the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) met and issued the Norwalk Agreement where they both agreed to develop of high quality accounting standards. Since that time the FASB and the IASB have been working on joint projects a.k.a convergence projects designed to improve both US Generally Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS), eliminate differences between them, and ultimately
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must be revalued to its fair value, which is defined as “the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s-lenght transaction”. Fair values must be capable of reliable measurements and revaluations must be made, either upwards or downwards, with sufficient regularity to guarantee the carrying amount of each asset does not differ materially from its fair value. The carrying amount of an asset (also referred to as book value) refers to the amount at
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arrangement. These elements to which revenue amounts are assigned by GAAP are referred to as separate units of accounting. To justify the allocation of revenues to a separate unit of accounting, GAAP previously required three criteria to be met. In addition to having demonstrated objective and reliable evidence of the fair value, each separately identifiable deliverable had to have stand-alone value to the customer and, in cases where there was a general right of return, delivery of the undelivered item(s)
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