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Universal financial reporting standards
Differences And Similarities Of Ifrs And Gaap
Differences And Similarities Of Ifrs And Gaap
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The objectives of financial report are different from each country, therefore, the worldwide market use the financial report from different countries all over the world following one practice standard. To respond to the need of this worldwide market, the US public companies must do the dual reporting to disclose and to present comprehensible information to the international investors and creditors. Statement of the Problem The dual reporting has been done by US public companies to attract more investors and creditors in the global market. The global market makes the US companies already doing their reporting under GAAP to file another reporting under IFRS. Unfortunately, the U.S. public companies are taking a long time to finish the dual reporting due to the difficulties they confront or the challenges in the business to convert to IFRS and the intention deferred of SEC to apply the IFRS in U.S. even the FASB was taking an action for the conversion. Research Question The purpose of this thesis is to determine what the U.S. public companies must do on their financial reporting to attract more investors and creditors in the global market? In addition, what are the consequences of the actions taken by the US public companies to convert to IFRS? To answer these questions, the following sub-questions will be addressed: 1. What modifications in the reporting financial can be performed to attract more investors and creditors in the worldwide market? 2. What are the implications of converging U.S. GAAP and IFRS? 3. What are the advantages and disadvantages of using the IFRS? 4. How are the US public companies affected by the adoption of IFRS in the global market? Significance of the study This study is particularly si... ... middle of paper ... ...cial statement and the impacts on the flow of funds. Chapter 4 - Research Question Findings. The implications of converging U.S. GAAP and IFRS. This chapter deals with the difficulties and the challenges that the US public companies face. Chapter 5 - Research Question Findings. The advantages and disadvantages of using the IFRS. This chapter explores the details of the IFRS as well the need of adopting the IFRS. Chapter 6 - Research Question Findings. The US public companies affected by the adoption of IFRS in the global market. This chapter shows the way that the US public companies concerned by the adoption of the IFRS in the global market Chapter 7 - Summary and Conclusions. This chapter restates the problem and the research questions, summarizes the findings from the research and presents the conclusions to the research questions drawn from the research.
Also, if United States will switch over to IFRS from GAAP, it will allow US to become a part of the global economy.
The conclusion should be written out word for word. The conclusion should contain the following objectives:
Conclusion: It is evident that if these financial practices were to be followed, David Johnston, the CRA, the business, and its stakeholders will be satisfied. A business must obey IFRS standards, as it provides a corporation with accurate measures of finance and
In accounting, private companies are treated differently than governmental and non-profit companies. However governmental and non-profit companies use different reporting requirements from the private sector. The requirements for governmental companies use the Government Accounting Standards Board (GASB), whereas profit and non-profit companies use the Financial Accounting Standards Board. This paper will explain the purpose, discus the similarities, and differences between the GASB and FASB.
We would love for these impacts to always have a positive impact; however the impact can affect a company in a negative manner. “ Researchers Holger Daske, Leuz Hail, Christian Leuz and Rodrigo Verdi examined 3,100 firms in 26 countries mandated to adopt IFRS in “Mandatory IFRS Reporting around the World: Early Evidence on the Economic Consequences”. The study examines the economic effects of IFRS, both early and mandated adoption” (Bolt-Lee). They were able to conclude that a company’s adoption of IFRS creates strong economic benefits in countries with rigid regulation over financial reporting. The article also explains that these benefits include an increase in the stock’s market value, an increase in market liquidity, and a lower cost of capital. Companies with major differences between GAAP and IFRS standards show the greatest benefit when supported by a strong regulatory
"The more complex and formal US rules and procedures do not permit as much flexibility and speed" (Benston, 1995). So the UK’s new system is a compromise between the best of self regulation and statutory regulation to ensure the financial markets work in an efficient and orderly manner. The FSA reinforces the orderly operation of the UK markets. For example, when a firm wishes to list on the London Stock Exchange (LSE), they must satisfy requirements of the previously self-regulatory LSE as well as ...
IFRS 1 requires companies to select IFRS accounting policies and apply those polices retrospectively to all periods presented in the IFRS financial statements. Assets and liabilities required under IFRS have to be recognized. For example, assets and liabilities under finance leases have to be recognized. Assets and liabilities that IFRS does not permit have to be derecognized. For example, deferred costs that do not meet the definition of an asset have to be derecognized. All assets and liabilities have to be reclassified in accordance with IFRS at the transition date. For example, debt issuance costs must be netted against the related financial liability. All assets and liabilities have to be measured in accordance with IFRS. ...
This article hasn’t provided an introduction; however a lengthy summary of the study which identifies the problem, purpose and rationale for the research study has been provided in the background. The introduction should give the reader a general sense of what the document is about, and preferably persuade the reader to continue reading. This prepares the reader for reading the rest of the document (Burns & Grove, 2001 p.636; Nieswiadomy, 2008 p.380; Stockhausen and Conrick, 2002).
Expanding sales to foreign countries can offer a Multinational Company (MNC) higher profit margins, unique products, and technological advantages. One of the major issues that an MNC will face is analyzing foreign financial statements, due to the diversity of accounting guidelines across the world. It’s imperative that companies that decide to go international learn and understand the tax laws and guidelines of other countries, in order to minimize the accounting issues involved in business activities. One of the top coffee producing companies in the world, Starbucks Corp has grown to be a powerful MNC. Their investment in foreign operations and foreign trade requires them to understand international accounting concepts and international financial reporting standards (IFRS). In this report, GAAP concepts used by Starbuck’s will be compared to IFRS.
Schofield (2014) researches the difference between public and private company financial reporting. For instance, a private company has fewer consumers reviewing their financial statements, whereas public companies could have multiple consumers reviewing financial statements. In addition, private companies typically have less specialized accounting personnel, whereas public companies will have several. Lastly, Schofield (2014), reviewed the number of amendments proposed and finalized to help benefit private companies financial reporting.
On September 28, 1998, Chairman of the U.S. Securities and Exchange Commission Arthur Levitt sounded the call to arms in the financial community. Levitt asked for, "immediate and coordinated action… to assure credibility and transparency" of financial reporting. Levitt’s speech emphasized the importance of clear financial reporting to those gathered at New York University. Reporting which has bowed to the pressures and tricks of earnings management. Levitt specifically addresses five of the most popular tricks used by firms to smooth earnings. Secondly, Levitt outlines an eight part action plan to recover the integrity of financial reporting in the U.S. market place. What are the basic objectives of financial reporting? Generally accepted accounting principles provide information that identifies, measures, and communicates financial information about economic entities to reasonably knowledgeable users. Information that is a source of decision making for a wide array of users, most importantly, by investors and creditors. Investors and creditors who are responsible for effective allocation of capital in our economy. If financial reporting becomes obscure and indecipherable, society loses the benefits of effective capital allocation. Nothing illustrates the importance of transparent information better than the pre-1930’s era of anything goes accounting. An era that left a chasm of misinformation in the market. A chasm that was a contributing factor to the market collapse of 1929 and the years of economic depression. An entire society suffered the repercussions of misinformation. Families, and retirees depend on the credibility of financial reporting for their futures and livelihoods. Levitt describes financial reporting as, a bond between the company and the investor which if damaged can have disastrous, long-lasting consequences. Once again, the bond is being tested. Tested by a financial community fixated on consensus earnings estimates. The pressure to achieve consensus estimates has never been so intense. The market demands consistency and punishes those who come up short. Eric Benhamou, former CEO of 3COM Corporation, learned this hard lesson over a few short weeks in 1996. Benhamou and shareholders lost $7 billion in market value when 3COM failed to achieve expectations. The pressures are a tangled web of expectations, and conflicts of interest which Levitt describes as "almost self-perpetuating." With pressures mounting, the answer from U.S. managers has been earnings management with a mix of managed expectations. March of 1997 Fortune magazine reported that for an unprecedented sixteen consecutive quarters, more S&P 500 companies have beat the consensus earnings estimate than missed them.
Methods and Data 6. Analysis and Results 7. Discussion 8. Conclusion and Future Prospect 9. Bibliography or References Research papers are organized so that the information flow from general to specific and then back to general again.
Now within the rest of this paper you will be finding a few different things getting discussed. Staring it off we will be discussing the articles that we have found to make our arguments and hypotheses. After wrapping up the literature reviews we will be discussing the hypotheses thus continuing onto our variables and indicators. Once we discuss our hypotheses we will be moving onto the research design. The research design will have our general issues, sampling, and methods.
There has been a drive towards corporate governance which has been driven by a greater need for shareholder protection. If investors feel well cushioned then there is a higher chance that t...
The success of a company is very dependent upon its financial accounting. In accounting there are numerous Regulatory bodies that govern the accounting world. These companies are extremely important to a company because they set the standards when it comes to the language and decision making of a company. These regulatory bodies can be structured as agencies, associations, commissions, and boards. Without companies like the Security and Exchange Commission (SEC), The Financial Accounting Standards Board (FASB), the Governmental Accounting Standards Board (GASB), Internal Accounting Standards Board (IASB), Internal Revenue Service (IRS), and other regulatory bodies a company could not make well informed decisions. In this paper the author will look at only four of them.