The present work looks at the comparison of different types of international norms applied to financial assets and liabilities. Such use is intended to adjust the accounting to the “fair value” option. It is proper then, to count on the norms that have different accounting systems (the main two, based on IAS/IFRS and FAS) and on the different approaches used by the regulators as they apply the methods and principles of each one.
At a time when the globalization of financial markets demands that its agents act with prudence, an approach that does not take into account the different characteristics of evaluation can induce deciding bodies in error.
It is for this reason that this work will compare the systems that determine the value of financial
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Succintly and as a starting point to this work, the need and objectives of accounting harmonization as well as alterations that take place at an international level as well as in Portugal will be explored.
According to Volker (2002) in spite of an emission of proper norms that respond to new developments in financial markets, the quick globalization of these on par with different accounting norms and different enforcing mechanisms actually further increase the risks.
Lima (2010) points out that due to market interactions; there is a real necessity for uniformity in respect to the standard language of international investors.
According to Silva, et al. (2009) accounting harmonization implies a profound change in countries ' accounting habits, raising questions such as what factors justify the existence of different norms amongst countries and what type of impacts would be felt with this
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Radebaugh e Gray (1993) justified norm differences among countries with the historical, economical and cultural differences that existed. Choi et al. (1999) e Cañibano e Mora (2000) even found a connection between the aproximation of accounting practices and the social, economical, legal, and cultural similarities of countries.
2.1 International Environment
In 1973 in correspondence with the need to determine accounting principles, the International Accounting Standards Committee was established. Known as IASC its main function was to be responsable by issuing international accounting norms.
Rodrigues(2011) states that this institution was responsible for the objectives, definitions, publications, acceptance and conformity of accounting norms in an international level between 1973 and 2000, having also contributed to the aproximation of reported information and account credibility.
In 2001 IASC was reestructured and became IASB (International Accounting Standard Board). The norms issued up until that year by IASC and designated as International Accounting Standards (IAS) were also subjected to changes, and became (IFRS) International Financial Reporting Standards.
While IAS encompassed only accounting, IFRS encompassed accounting and financial
The goal of the Codification is to simplify the organization of thousands of authoritative U.S. accounting pronouncements issued by multiple standard-setters. To achieve this goal, the FASB initiated a project to integrate and topically organize all relevant accounting pronouncements issued by the U.S. standard-setters including those of the FASB, the American Institute of Certified Public Accountants (AICPA), and the Emerging Issues Task Force (EITF)
In the world of international finance there are two major accounting systems; GAAP, which stands for Generally Accepted Accounting Principles, and IFRS, which stands for International Financial Reporting Standards. The United States prefers GAAP while the European market, as well as many other countries, prefers IFRS. By 2015 the Securities Exchange Commission is anticipating a total transfer to IFRS in the United States. Though the differences between GAAP and IFRS are few, they could affect accuracy of financial reporting throughout the world. It is important to understand the differences and similarities between both GAAP and IFRS if one is to globalize ones market (Logue).
Olusegun Wallace, R. 1996. The Development of Accounting Research in the UK. In: Cooke, T. and Nobes, C. eds. 1997. The Development of Accounting in an International Context. London: Routledge, pp. 218-254.
As numerous business valuation approaches rely on an accurate estimate of the cost of capital. The outlook based on the history stated in the book “The reckoning financial accountability and the rise and fall of nations” provides an influential and motivating history of the interaction between financial acumen, focusing on accounting abilities and the vitality and sustainability of nations at the state level and the level of the corporate enterprise.
Paul E. Hot. 2013. Critical Elements of Foreign Currency Translation: A Worldwide Informational and Accounting Problem. United States. American Journal of Economics and Business Administration.
Now more than ever it is important to know what IFRS is and what AICPA and IMA are, especially pertaining to their ethical standards. IFRS or the International Accounting Standards Board is a group of highly experienced professionals in the accounting field. They deal with the setting of standards, as well as preparing, auditing or using financial reports, and educating future accountants. The AICPA or the American Institute Of Certified Public Accountants is a non-profit organization of American Certified Public Accountants (CPA) who create
Accounting Theory: Conceptual Issues in a Political and Economic Environment (6th edition ed.). South Western College Pub.
A country’s accounting system is a reflection of a number of factors that encompass both its past and present. Italy is a great reflection of this as it once stood as a leader in the accounting world, but since that point has become a bit entangled in itself.
This paper objective is to examine the pros and cons of both principles-based standards and rules-based standards and decide on which of these approaches is the better for the ever-evolving nature of accounting. Ultimately, the better of the two approach should take into account reliability and
The globalization of business has resulted in the need for compatible accounting standards that can be used internationally for financial reporting. As a result, the International Financial Reporting Standards (IFRS) were developed by the International Accounting Standards Board (IASB) to unify the various financial reporting methods and create a single accounting standard which can be applied to any financial statement worldwide (Byatt). The global standardization of financial reporting will increase the readability and enhance comparability of globally traded companies’ financial statements, without the need of conversion or translation. There are a few main differences between the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (U.S GAAP). The increasing recognition and acceptance of the International Financial Reporting Standards by accounting professionals in the United States, will affect the way in which the U.S will record financial statements in the future.
The International Accounting Standards Board, (IASB), began life as the International Accounting Standards Committee (IASC) in the 1973. The IASC was created in June 1973 as a result of an agreement by the accountancy bodies of Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland and the United States. These countries constituted the Board of IASC at that time.
According to business, or any organization, Accounting plays a major role in developing and growth of the business. Financial standards of the organization expected as the complexities of business growth and expansion. Hence determining the implementation of the standards can vary according to the type of industry, business or organization.
Both accounting and finance deal with money and assets; however, they are categorically different concepts. This portion of the essay will discuss the dissimilarities between accounting and finance. Examples of different concepts will be given for both practices.
Financial theories are the building blocks of today's corporate world. "The basic building blocks of finance theory lay the foundation for many modern tools used in areas such asset pricing and investment. Many of these theoretical concepts such as general equilibrium analysis, information economics and theory of contracts are firmly rooted in classical Microeconomics" (Oaktree, 2005)
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.