This document discusses accounting practices in 5 European countries: France, Germany, the Czech Republic, the Netherlands, and the UK. It describes the regulatory bodies that set standards in each country, the required financial reporting elements, and key accounting measurements and principles. Some similarities and differences between the countries include historical cost basis, treatment of goodwill, research/development costs, and inventory valuation methods. IFRS adoption varies, with listed companies in Germany and some Dutch companies using IFRS.
International accounting: Comparative accounting the americas and asiaMohammed Alashi
The document discusses and compares the accounting systems and standards of 5 countries: the US, Mexico, Japan, China, and India. It covers topics such as the regulatory bodies that set standards, enforcement mechanisms, required financial reporting, and accounting measurements for items like business combinations, inventory, fixed assets, and research/development costs. Overall, the accounting in these countries has been influenced by their political and economic ties, with the US having significant influence on Mexico and India originally adopting British standards.
International Accounting Standard Board(IASB) - StructureSundar B N
The document discusses the structure of the International Accounting Standards Board (IASB). The IASB was formed in 2001 to set accounting standards and replaced the International Accounting Standards Committee. The IASB has a three-level governance structure, with the IFRS Foundation overseeing the IASB and accountable to the Monitoring Board. The IASB itself is made up of 16 full and part-time members who are responsible for developing accounting standards. It is supported by interpretation committees and advisory councils.
IFRS is the abbreviation for International Financial Reporting Standards, which is a set of accounting standards developed by the International Accounting Standards Board to provide a global framework for publicly traded companies to prepare and disclose their financial statements. Adopting IFRS has several benefits, such as allowing comparison of financial information across borders, simplifying reporting procedures, and providing transparency to investors. The mission of IFRS is to increase transparency and accountability while improving efficiency and lowering costs through a single set of high-quality global accounting standards.
This document provides an overview of International Financial Reporting Standards (IFRS). It discusses that IFRS are a global set of accounting standards developed by the IASB to provide consistency in how public companies report financial information. It also outlines the importance of IFRS in allowing easier comparison between companies, as well as advantages like increased investment and disadvantages like increased costs of transition and potential differences in interpretation. Finally, it lists the key components required in IFRS financial statements and provides a listing of the individual IFRS standards.
This document outlines the key learning objectives and topics covered in international accounting. It defines international accounting as accounting for multinational companies that have operations across national borders. The document discusses how international accounting is distinct from domestic accounting in its consideration of diversity in measurement principles, disclosure practices, and auditing across countries. It also lists several contributing factors to the growth and importance of international accounting, such as the globalization of business, capital markets, and competition.
This document provides an overview of International Financial Reporting Standards (IFRS) and how they differ from Indian GAAP and US GAAP. It discusses the history and evolution of IFRS from the International Accounting Standards Committee in 1973 to today. Key differences between IFRS, Indian GAAP and US GAAP are outlined for inventory valuation, events after the balance sheet date, and treatment of prior period items and changes in accounting policies.
The course aims to provide students with an in-depth understanding of financial accounting issues and emerging accounting topics to exercise appropriate judgment in selecting and presenting accounting information. Students will learn to understand accounting frameworks and ethical codes, describe accounting standard provisions and principles, account for assets and liabilities, recognize revenue, account for income taxes, and prepare financial statements in accordance with standards. They will also develop arguments for accounting problems.
The International Accounting Standards Board (IASB) is an independent organization that establishes International Financial Reporting Standards (IFRS) accepted globally. The IASB consists of 14 members from different countries and backgrounds who meet publicly to develop high-quality, transparent accounting standards. It seeks to develop a single set of global standards in the public interest and operates independently without political influence through an established due process.
International accounting: Comparative accounting the americas and asiaMohammed Alashi
The document discusses and compares the accounting systems and standards of 5 countries: the US, Mexico, Japan, China, and India. It covers topics such as the regulatory bodies that set standards, enforcement mechanisms, required financial reporting, and accounting measurements for items like business combinations, inventory, fixed assets, and research/development costs. Overall, the accounting in these countries has been influenced by their political and economic ties, with the US having significant influence on Mexico and India originally adopting British standards.
International Accounting Standard Board(IASB) - StructureSundar B N
The document discusses the structure of the International Accounting Standards Board (IASB). The IASB was formed in 2001 to set accounting standards and replaced the International Accounting Standards Committee. The IASB has a three-level governance structure, with the IFRS Foundation overseeing the IASB and accountable to the Monitoring Board. The IASB itself is made up of 16 full and part-time members who are responsible for developing accounting standards. It is supported by interpretation committees and advisory councils.
IFRS is the abbreviation for International Financial Reporting Standards, which is a set of accounting standards developed by the International Accounting Standards Board to provide a global framework for publicly traded companies to prepare and disclose their financial statements. Adopting IFRS has several benefits, such as allowing comparison of financial information across borders, simplifying reporting procedures, and providing transparency to investors. The mission of IFRS is to increase transparency and accountability while improving efficiency and lowering costs through a single set of high-quality global accounting standards.
This document provides an overview of International Financial Reporting Standards (IFRS). It discusses that IFRS are a global set of accounting standards developed by the IASB to provide consistency in how public companies report financial information. It also outlines the importance of IFRS in allowing easier comparison between companies, as well as advantages like increased investment and disadvantages like increased costs of transition and potential differences in interpretation. Finally, it lists the key components required in IFRS financial statements and provides a listing of the individual IFRS standards.
This document outlines the key learning objectives and topics covered in international accounting. It defines international accounting as accounting for multinational companies that have operations across national borders. The document discusses how international accounting is distinct from domestic accounting in its consideration of diversity in measurement principles, disclosure practices, and auditing across countries. It also lists several contributing factors to the growth and importance of international accounting, such as the globalization of business, capital markets, and competition.
This document provides an overview of International Financial Reporting Standards (IFRS) and how they differ from Indian GAAP and US GAAP. It discusses the history and evolution of IFRS from the International Accounting Standards Committee in 1973 to today. Key differences between IFRS, Indian GAAP and US GAAP are outlined for inventory valuation, events after the balance sheet date, and treatment of prior period items and changes in accounting policies.
The course aims to provide students with an in-depth understanding of financial accounting issues and emerging accounting topics to exercise appropriate judgment in selecting and presenting accounting information. Students will learn to understand accounting frameworks and ethical codes, describe accounting standard provisions and principles, account for assets and liabilities, recognize revenue, account for income taxes, and prepare financial statements in accordance with standards. They will also develop arguments for accounting problems.
The International Accounting Standards Board (IASB) is an independent organization that establishes International Financial Reporting Standards (IFRS) accepted globally. The IASB consists of 14 members from different countries and backgrounds who meet publicly to develop high-quality, transparent accounting standards. It seeks to develop a single set of global standards in the public interest and operates independently without political influence through an established due process.
Valuation of Inventories: A Cost-Basis Approachreskino1
Describe inventory classifications and different inventory systems.
Identify the goods and costs included in inventory.
Compare the cost flow assumptions used to account for inventories.
Determine the effects of inventory errors on the financial statements.
The document provides summaries of several International Accounting Standards (IAS). It begins by explaining that IAS were formerly issued by the International Accounting Standards Committee to provide guidance on reflecting transactions and events in financial statements, and are now known as International Financial Reporting Standards issued by the IASB. It then summarizes the objectives and key requirements of several individual IAS standards, including IAS 1 on financial statement presentation, IAS 2 on inventories, IAS 7 on statements of cash flows, IAS 8 on accounting policies and errors, IAS 11 on construction contracts, and several others dealing with topics like income taxes, property and equipment, leases, revenue, and employee benefits.
This document provides an introduction to international accounting. It discusses how international accounting differs from domestic accounting due to factors like differing business practices, regulations, and tax codes between countries. The document also outlines the historical development of international accounting standards and how certain countries influenced other regions. Finally, it discusses contemporary issues in international accounting like the growth of multinational operations, financial innovation, global competition, and the internationalization of capital markets.
This document outlines the requirements and guidance for a first-time adopter of International Financial Reporting Standards (IFRS) as provided in IFRS 1. It discusses the objective, scope, definitions, recognition and measurement principles, mandatory exceptions and optional exemptions to retrospective application that a first-time adopter must consider. It also provides examples of the phased transition approach to IFRS adoption in Ethiopia, including transition dates and timelines for different entities.
International financial reporting standards (ifrs)pptIDBI Capital
International Financial Reporting Standards (IFRS) are a global set of accounting standards meant to provide consistency and transparency in financial reporting around the world. IFRS provide rules that accountants must follow to prepare financial statements that are comparable, understandable, reliable and relevant to both internal and external users. IFRS financial statements include a statement of financial position, statement of comprehensive income, statement of changes in equity, and cash flow statement. Many countries around the world either require or allow the use of IFRS to standardized financial reporting practices globally.
International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board to establish consistent, transparent, and comparable financial reporting around the world. IFRS address record keeping, financial reporting, and other aspects of financial reporting. While not universal, with the US using GAAP, IFRS are used in the European Union, India, Hong Kong, Australia, and other countries. The objectives of IFRS include bringing uniformity to accounting practices, expanding global capital markets, enhancing transparency, and reducing reporting costs. Financial statements prepared under IFRS include a statement of financial position, statement of comprehensive income, statement of changes in equity, and cash flow statement.
The document provides an overview of the development of accounting principles and professional practice. It discusses how the environment of accounting has evolved over time to meet changing demands and influences. Three key influences are: 1) recognizing scarce resources, 2) current concepts of property rights and equity, and 3) measuring information for absentee investors. The document also describes the objectives of financial reporting, key qualitative characteristics of accounting information, elements of financial statements, and basic principles of accounting including measurement, revenue/expense recognition, and full disclosure.
In this ppt i have given Introduction International Accounting which covers approaches in international accounting, importance of ia, introduction international accounting.
Subscribe to Vision Academy for Video assistance https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
The International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) to provide a common global language for business affairs. The key elements of financial statements under IFRS include statements of financial position, comprehensive income, changes in equity, cash flows, and accompanying notes. IFRS aims to make company accounts more understandable and comparable internationally to benefit investors and businesses operating globally.
International financial reporting standardsKushal Setty
International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board to be the global standard for public company financial statements. More than 100 countries either require or allow the use of IFRS. Several countries including Canada, India, and the EU are transitioning to require IFRS by 2011. While IFRS adoption has benefits, there are also costs and challenges to the transition for companies and differences remain between IFRS and US GAAP standards.
IFRS are principles-based accounting standards set by the IASB to promote global financial reporting consistency. Ethiopia has adopted IFRS and established the Accounting and Auditing Board of Ethiopia to oversee the implementation of IFRS for public interest entities, small and medium enterprises, and non-profits according to a staged rollout plan concluding in 2019. While IFRS and US GAAP have converged in many areas, differences remain in accounting treatments for items like inventory, contingencies, and classification of financial instruments.
This document provides an overview of the equity method of accounting for investments. It describes the equity method criteria, accounting procedures, and journal entries. The key points are:
1. The equity method is used when an investor has significant influence over an investee, usually owning 20-50% of the voting shares.
2. Under the equity method, the investment account increases with the investee's earnings and decreases with dividends. Income is recognized based on the investor's share of the investee's earnings.
3. Example journal entries are provided to record an investor recognizing income from and dividends received from an investee under the equity method.
This document summarizes the key requirements of IAS 1 regarding the presentation of financial statements. It outlines the general purpose and components of financial statements, including statements of financial position, comprehensive income, changes in equity, and cash flows. It describes the general features that financial statements must adhere to, such as fair presentation, going concern basis, accrual accounting, materiality and offsetting. It provides details on the minimum line items that must be presented in each financial statement and notes. In the end, it gives examples of how Burj Bank implemented IAS 1 in its own financial statements.
The document is an illustrative independent auditor's report that includes four examples of circumstances that could result in modified opinions.
The first example describes a qualified opinion due to a material misstatement of inventories. The second example describes an adverse opinion due to failure to consolidate a subsidiary. The third example describes a qualified opinion because the auditor was unable to obtain evidence about an investment. The fourth example describes a disclaimer of opinion because the auditor was unable to obtain evidence about a major joint venture investment.
IFRS IND-AS (2014-2019) Application in IndiaGajveer Mahur
IFRS, Ind-AS 2014-2019 Application in Indian company, financial organisation
International Financial Reporting Standards (IFRS) is a set of accounting standards developed by an independent, not-for-profit organization called the International Accounting Standards Board (IASB).
This document provides an overview of IFRS 6, which specifies the financial reporting for exploration and evaluation of mineral resources. It discusses key aspects such as the objective, scope, recognition and measurement of exploration and evaluation assets, impairment testing, and disclosure requirements. Specifically, the standard aims to improve consistency and requires entities to assess exploration and evaluation assets for impairment using IAS 36 and disclose information to help users understand amounts and future cash flows from these assets.
IAS1 INTERNATIONAL ACCOUNTING STANDARD Presentation of Financial Statement un...Shuaib Adebayo
This document outlines a presentation on the presentation of financial statements. It discusses key topics like the qualitative characteristics of financial statements, components and elements of financial statements, recognition of elements, description of different financial statements, periods covered, approval process, disclosure requirements, and examples of statements prepared under IFRS like the statement of financial position, income statement, statement of changes in equity, and cash flow statement. The presentation also provides definitions and recognition criteria for assets, liabilities, income, and expenses.
The document provides information about accounting standards and principles. It defines generally accepted accounting principles as standards that have substantial authoritative support such as FASB standards. It explains the need for accounting standards to minimize dangers of bias, misinterpretation and inexactness in financial statements. It identifies the main financial statements as the balance sheet, income statement, statement of cash flows and statement of owners' equity. It also lists other means of financial reporting such as letters, schedules and reports.
Valuation of Inventories: A Cost-Basis Approachreskino1
Describe inventory classifications and different inventory systems.
Identify the goods and costs included in inventory.
Compare the cost flow assumptions used to account for inventories.
Determine the effects of inventory errors on the financial statements.
The document provides summaries of several International Accounting Standards (IAS). It begins by explaining that IAS were formerly issued by the International Accounting Standards Committee to provide guidance on reflecting transactions and events in financial statements, and are now known as International Financial Reporting Standards issued by the IASB. It then summarizes the objectives and key requirements of several individual IAS standards, including IAS 1 on financial statement presentation, IAS 2 on inventories, IAS 7 on statements of cash flows, IAS 8 on accounting policies and errors, IAS 11 on construction contracts, and several others dealing with topics like income taxes, property and equipment, leases, revenue, and employee benefits.
This document provides an introduction to international accounting. It discusses how international accounting differs from domestic accounting due to factors like differing business practices, regulations, and tax codes between countries. The document also outlines the historical development of international accounting standards and how certain countries influenced other regions. Finally, it discusses contemporary issues in international accounting like the growth of multinational operations, financial innovation, global competition, and the internationalization of capital markets.
This document outlines the requirements and guidance for a first-time adopter of International Financial Reporting Standards (IFRS) as provided in IFRS 1. It discusses the objective, scope, definitions, recognition and measurement principles, mandatory exceptions and optional exemptions to retrospective application that a first-time adopter must consider. It also provides examples of the phased transition approach to IFRS adoption in Ethiopia, including transition dates and timelines for different entities.
International financial reporting standards (ifrs)pptIDBI Capital
International Financial Reporting Standards (IFRS) are a global set of accounting standards meant to provide consistency and transparency in financial reporting around the world. IFRS provide rules that accountants must follow to prepare financial statements that are comparable, understandable, reliable and relevant to both internal and external users. IFRS financial statements include a statement of financial position, statement of comprehensive income, statement of changes in equity, and cash flow statement. Many countries around the world either require or allow the use of IFRS to standardized financial reporting practices globally.
International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board to establish consistent, transparent, and comparable financial reporting around the world. IFRS address record keeping, financial reporting, and other aspects of financial reporting. While not universal, with the US using GAAP, IFRS are used in the European Union, India, Hong Kong, Australia, and other countries. The objectives of IFRS include bringing uniformity to accounting practices, expanding global capital markets, enhancing transparency, and reducing reporting costs. Financial statements prepared under IFRS include a statement of financial position, statement of comprehensive income, statement of changes in equity, and cash flow statement.
The document provides an overview of the development of accounting principles and professional practice. It discusses how the environment of accounting has evolved over time to meet changing demands and influences. Three key influences are: 1) recognizing scarce resources, 2) current concepts of property rights and equity, and 3) measuring information for absentee investors. The document also describes the objectives of financial reporting, key qualitative characteristics of accounting information, elements of financial statements, and basic principles of accounting including measurement, revenue/expense recognition, and full disclosure.
In this ppt i have given Introduction International Accounting which covers approaches in international accounting, importance of ia, introduction international accounting.
Subscribe to Vision Academy for Video assistance https://www.youtube.com/channel/UCjzpit_cXjdnzER_165mIiw
The International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) to provide a common global language for business affairs. The key elements of financial statements under IFRS include statements of financial position, comprehensive income, changes in equity, cash flows, and accompanying notes. IFRS aims to make company accounts more understandable and comparable internationally to benefit investors and businesses operating globally.
International financial reporting standardsKushal Setty
International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board to be the global standard for public company financial statements. More than 100 countries either require or allow the use of IFRS. Several countries including Canada, India, and the EU are transitioning to require IFRS by 2011. While IFRS adoption has benefits, there are also costs and challenges to the transition for companies and differences remain between IFRS and US GAAP standards.
IFRS are principles-based accounting standards set by the IASB to promote global financial reporting consistency. Ethiopia has adopted IFRS and established the Accounting and Auditing Board of Ethiopia to oversee the implementation of IFRS for public interest entities, small and medium enterprises, and non-profits according to a staged rollout plan concluding in 2019. While IFRS and US GAAP have converged in many areas, differences remain in accounting treatments for items like inventory, contingencies, and classification of financial instruments.
This document provides an overview of the equity method of accounting for investments. It describes the equity method criteria, accounting procedures, and journal entries. The key points are:
1. The equity method is used when an investor has significant influence over an investee, usually owning 20-50% of the voting shares.
2. Under the equity method, the investment account increases with the investee's earnings and decreases with dividends. Income is recognized based on the investor's share of the investee's earnings.
3. Example journal entries are provided to record an investor recognizing income from and dividends received from an investee under the equity method.
This document summarizes the key requirements of IAS 1 regarding the presentation of financial statements. It outlines the general purpose and components of financial statements, including statements of financial position, comprehensive income, changes in equity, and cash flows. It describes the general features that financial statements must adhere to, such as fair presentation, going concern basis, accrual accounting, materiality and offsetting. It provides details on the minimum line items that must be presented in each financial statement and notes. In the end, it gives examples of how Burj Bank implemented IAS 1 in its own financial statements.
The document is an illustrative independent auditor's report that includes four examples of circumstances that could result in modified opinions.
The first example describes a qualified opinion due to a material misstatement of inventories. The second example describes an adverse opinion due to failure to consolidate a subsidiary. The third example describes a qualified opinion because the auditor was unable to obtain evidence about an investment. The fourth example describes a disclaimer of opinion because the auditor was unable to obtain evidence about a major joint venture investment.
IFRS IND-AS (2014-2019) Application in IndiaGajveer Mahur
IFRS, Ind-AS 2014-2019 Application in Indian company, financial organisation
International Financial Reporting Standards (IFRS) is a set of accounting standards developed by an independent, not-for-profit organization called the International Accounting Standards Board (IASB).
This document provides an overview of IFRS 6, which specifies the financial reporting for exploration and evaluation of mineral resources. It discusses key aspects such as the objective, scope, recognition and measurement of exploration and evaluation assets, impairment testing, and disclosure requirements. Specifically, the standard aims to improve consistency and requires entities to assess exploration and evaluation assets for impairment using IAS 36 and disclose information to help users understand amounts and future cash flows from these assets.
IAS1 INTERNATIONAL ACCOUNTING STANDARD Presentation of Financial Statement un...Shuaib Adebayo
This document outlines a presentation on the presentation of financial statements. It discusses key topics like the qualitative characteristics of financial statements, components and elements of financial statements, recognition of elements, description of different financial statements, periods covered, approval process, disclosure requirements, and examples of statements prepared under IFRS like the statement of financial position, income statement, statement of changes in equity, and cash flow statement. The presentation also provides definitions and recognition criteria for assets, liabilities, income, and expenses.
The document provides information about accounting standards and principles. It defines generally accepted accounting principles as standards that have substantial authoritative support such as FASB standards. It explains the need for accounting standards to minimize dangers of bias, misinterpretation and inexactness in financial statements. It identifies the main financial statements as the balance sheet, income statement, statement of cash flows and statement of owners' equity. It also lists other means of financial reporting such as letters, schedules and reports.
International accounting development and classification (ch2)Mohammed Alashi
This document discusses factors that influence accounting development and classifications of accounting approaches. It identifies eight factors that influence accounting development: sources of finance, legal system, taxation, political/economic ties, inflation, economic development level, education level, and culture. It also describes four approaches to accounting development found in Western market economies: the macroeconomic approach, microeconomic approach, independent discipline approach, and uniform approach. Finally, it explains the differences between fair presentation and legal compliance orientations of accounting.
IFRS in Africa presentation gives comparison between Ghana and Nigeria how IFRS has been implemented in both countries and the challenges they both faced with IFRS adoption.
The document analyzes the financial statements of Bangalore Metropolitan Transport Corporation (BMTC) for the year 2012-13. It finds that in 2012, BMTC's capital and internal resources, fixed assets, reserves, and liabilities decreased. Cash and balances improved. Inventories decreased and net profit decreased from the previous year. Comparative, common-size, and trend analysis were conducted on BMTC's financial statements. The analysis revealed decreases in certain areas and provided suggestions to improve debt recovery, utilization of loans, and profits by reducing operating costs.
Managerial Accounting - Dice Company - SolutionFaHaD .H. NooR
This document contains production, direct labor, and direct material budgets for the Dice Company for the first two quarters of 1990. Part A shows the production budget for picnic tables, including opening balances, production quantities, sales, and closing balances for each quarter. Part B gives the direct labor budget for lumber, and Part C the direct material budget for stain, both including the same line items. The final sections provide calculations for cutting and finishing labor costs for picnic table production in the first two quarters.
The document provides information on financial systems from both conventional and Islamic perspectives. It defines key components of each system, including mechanisms, institutions, instruments, and rewards. The conventional system uses interest-based financing and investment, while the Islamic system uses participatory modes like mudarabah and leasing. It also discusses constituents of money and capital markets, as well as financial intermediation and its advantages/disadvantages. Finally, it contrasts conventional and Islamic views of money, explaining why Islam does not consider money a commodity.
A COMPARATIVE STUDY ON FINANCIAL PERFORMANCE OF PUBLIC SECTOR BANKS IN INDIA:...kishoremeghani
Banking sector is one of the fastest growing sectors in India. Today’s banking sector becoming more complex. The objective of this study is to analyze the Financial Position and Performance of the Bank of Baroda and Punjab National Bank in India based on their financial characteristics. This study attempts to measure the relative performance of Indian banks. For this study, we have used public sector banks. We know that in the service sector, it is difficult to quantify the output because it is intangible. We have chosen the CAMEL model and t-test which measures the performance of bank from each of the important parameter like capital adequacy, asset quality, management efficiency, earning quality, liquidity and Sensitivity.
presentation on financial statement of hero moto corpsayed124
This document outlines an internship project completed by Sayed Nabil at Hero MotoCorp Ltd. It includes an acknowledgment, declaration, objectives, introduction to the company, milestones, leadership team, product line, organizational structure, and employees profile. The project analyzed Hero MotoCorp's financial statements over five years including the profit and loss account, balance sheet, and cash flow statement to understand the company's financial performance and position. Key ratios were calculated and trends analyzed. The document provides an overview of Hero MotoCorp as the background for Nabil's financial analysis internship project.
Financial statement analysis involves analyzing a company's financial statements to assess its performance and financial position. It is done by both internal managers and external parties such as investors and creditors. Key aspects of financial statement analysis include ratio analysis, trend analysis, and comparative analysis. Ratio analysis calculates and analyzes financial ratios to evaluate aspects such as liquidity, asset efficiency, debt levels, profitability, and investor returns. Trend analysis examines changes in financial metrics over several periods. Comparative analysis compares financial results to other companies or years. The overall goal is to evaluate the company's financial health and identify strengths and weaknesses.
Comparative study of the financial analysis of Tata steel and Jindal Steelarchit aggarwal
This document provides an overview of the steel industry in India. It discusses that India is the 4th largest producer of crude steel globally. It then outlines the major players in the public and private sector of the Indian steel industry such as SAIL, Tata Steel, and JSW Steel. The document also summarizes recent major investments and developments in the industry as well as various initiatives taken by the Indian government to support the steel sector. It concludes by stating that the steel industry in India is anticipated to see investments of Rs. 2 trillion in the coming years based on increasing domestic demand.
A study on financial performance analysis at cee veeAKHILHARIDAS
This document provides an overview of the global and Indian footwear industry. It discusses the history of footwear dating back to ancient civilizations. India has a large livestock population and is one of the largest producers and exporters of footwear globally, especially leather footwear. The key products exported are leather footwear, footwear components, leather garments, and leather goods. The footwear industry is concentrated in certain regions and states of India like Tamil Nadu, Delhi, Agra and Kanpur. The document also provides statistics on India's annual footwear production capacity and imports.
Ratio analysis @ gadag textile mill project report mba financeBabasab Patil
The document provides an overview of a study on the analysis and interpretation of financial statements for Gadag Co-Operative Textile Mill Ltd Hulkoti. It includes 16 tables and charts that will be used in the analysis. It also outlines the 4 chapters that will comprise the study, including an introduction to the company, techniques for analysis and interpretation, findings and conclusions.
Income Statement Reporting Challenges with BI Tools: Helping IT and Finance t...Senturus
Use Cognos BI tools to maximize income statement reporting for finance and IT teams. View the webinar video recording and download this deck: http://www.senturus.com/resources/income-statement-reporting-challenges-bi-tools/,
Issues addressed include: 1) The need for both revenue and expenses to be displayed as positive numbers in the income statement; 2) The need to compare budget vs. actual with flexibility to choose which budget version to use and 3) The need to display positive variances as favorable in some cases, and as unfavorable in others.
We also share tips and techniques for configuring IBM Cognos Transformer models to enhance OLAP-based income statement reporting and ad hoc analysis.
Senturus, a business analytics consulting firm, has a resource library with hundreds of free recorded webinars, trainings, demos and unbiased product reviews. Take a look and share them with your colleagues and friends: http://www.senturus.com/resources/.
A project report on analysis and interpretation of 10 years financial statementsBabasab Patil
The document analyzes the financial statements of K.H.D.C.Ltd over 10 years. It aims to understand the company's financial position, growth in profits/expenses, and proportion of income statement and balance sheet items. Key objectives are to analyze the comparative and common size financial statements. The conclusion is that while expenses were rising, the company controlled costs in the last two years and became profitable. Suggestions include further minimizing administrative expenses and controlling operating costs to increase profits.
The document provides a comparative analysis of the financial statements of two textile companies in Bangladesh, Saiham Textile Mills Ltd. and Ashraf Textile Mills Ltd., over a three year period. Key findings include:
- Saiham Textile had higher total assets and shareholder's equity compared to Ashraf Textile.
- Saiham Textile was profitable over the period while Ashraf Textile reported losses each year.
- Analysis of ratios showed Saiham Textile had stronger liquidity, lower financial risk, and better ability to cover interest payments compared to Ashraf Textile.
Financial magment- Comparative Study of Sources of Financepillai college
This document is a project report submitted by Sunita Kumari Yadav to the University of Mumbai for her Master of Commerce degree. The project compares the sources of finance for MTNL and Reliance Communication based on their 2011-12 balance sheets and profit/loss statements. It provides definitions and classifications of different types of short-term, long-term, and medium-term sources of finance including shares, debentures, retained earnings, and loans. The bulk of the document discusses various types of ownership securities and creditorship securities as sources of security finance for companies.
The document discusses accounting organizations, standards, and qualifications in Germany. It describes several key organizations that influence accounting in Germany: (1) The Accounting Standards Committee of Germany (ASCG) which develops accounting recommendations and standards; (2) The Institute of Public Auditors (IDW) which represents auditors' professional interests; and (3) The Chamber of Public Accountants (WPK) which regulates auditors. German accounting standards are principle-based and focused on creditor protection, incorporating the realization and loss anticipation principles. While listed companies must use IFRS, non-listed companies can optionally use IFRS or German GAAP for consolidated financial statements. Major accounting scandals in Germany include those involving Arcand
This document provides an overview and outline of Chapter 18 which discusses international accounting issues. It examines factors that influence the development of accounting practices in different countries and the global convergence of standards. It also discusses how companies account for and translate foreign currency transactions and financial statements. Performance evaluation of foreign operations is complicated by issues like transfer pricing and foreign exchange rates. The balanced scorecard framework is introduced as an approach to evaluate performance from multiple perspectives.
All documents are reproduced with the permission of the copyright ownermanuelgoez303
This document summarizes an article about the benefits of international accounting standards. It discusses how international standards can promote harmonization and globalization in accounting management. The standards help reduce costs for multinational companies that previously had to convert financial reports between different countries' accounting rules. Widespread adoption of international standards can also lower information barriers between owners and managers and improve the accuracy of economic and financial forecasts. While international standards provide benefits, their effects depend on the supporting institutional environment of each country.
All documents are reproduced with the permission of the copyright ownermanuelgoez303
This document provides a summary of an academic journal article titled "Accounting Management by International Standards". The summary discusses how international accounting standards can promote harmonization and globalization by standardizing accounting management practices across borders. It notes that international standards can help multinational companies consolidate financial reporting and reduce costs. The adoption of uniform standards also increases transparency and reduces information asymmetry between managers and shareholders. However, the positive effects of international standards depend on the appropriate institutional background of individual countries. Overall, the summary examines the role of international accounting standards in areas like the division of labor, financial innovation, and business management.
The document provides an introduction to international accounting. It discusses key topics in international accounting including foreign currency translation, consolidation of foreign financial statements, accounting for foreign inflation, and management accounting areas like multinational transfer pricing and analysis of foreign financial statements. International accounting aims to facilitate harmonization of accounting practices globally and help decision makers understand financial reporting across different countries and their underlying accounting principles. It allows companies to effectively manage multinational operations and transactions between borders.
This document is the annual financial report of Deutsche EuroShop AG for the year 2020. It includes key figures, a combined management report, consolidated financial statements, and other standard sections for a financial report. The key figures section shows declines in revenue, earnings, and asset values from 2019 to 2020. The management report provides an overview of the company, its strategy and management system, as well as a review of the macroeconomic environment and retail sector affected by the coronavirus pandemic in 2020.
Global Market AnalysisGeoff BrownProfessor Duh.docxwhittemorelucilla
Global Market Analysis
Geoff Brown
Professor Duhn
ACC 680
March 5, 2017
Objectives
Introduction
Potential issues in financial statement analysis
Recommendations on the issues
International financial statement analysis potential benefits
2
Introduction: financial statements analysis
Definition; the act of looking at financial statements with a view of evaluating the financial status of the company to make better economic decisions(Brown et.al, 2014)
Financial statements include balance sheet, income statement, statement of equity and cash flow statement among others
Financial analysis uses tools such as financial ratios
Financial statement analysis make the use of various tools. The most common tools is financial ratios. This financial ratios are classified into various categories depending on the objective they are required to achieve. The common financial ratios are classified into liquidity, profitability, solvency, operating financial ratios and leverage ratios.
3
Introduction (continued)
Statement of the problem- effect of global market on financial statement analysis
Scope; financial statement analysis in the us vis a vis the global market
global market of choice is German.
This presentation is intended to give an outline of the various opportunities as well as threats that will be encountered as result of having global operations. The threats and opportunities will have a bias on the various effects this global markets will have on the process of financial statement analysis. This will also be a comparison between the host country, USA and the new country referred to as the global market. The global market in this case is German
4
Potential issues
Legal systems
Tax regulation
Political and political ties
Inflation
Funding mechanism
This are the major determinants of many countries accounting system and by the extension the process of financial statement analysis. They present both threats and opportunities to the business. The will be each be discussed in the subsequent slides.
5
Legal system
There two types of legal systems namely common law and codified roman law
The kind of accounting system is determined by the legal system
German being the global market uses codified roman law.
Accounting profession in German is highly regulated with procedures laid down on particular transaction
In the German law is silent about items such as cash flow statements, leases and also transactions involving foreign currency transactions(Geppert et.al, 2016)
Unlike in the USA and other countries who use the common law legal system, the accounting field is highly regulated in German. In countries operating under the common law regime the laws are left to professional bodies to deliberate on the various contentious issues. In this case various tools such as cash flow statement are very important when it comes to issues such liquidity. Lack of clear direction on such an item can make benchmarking wit ...
The underlying trends in the business show increasing revenue from Iya Internet and Salon Sumi, who are the top two advertisers. Iya Internet in particular shows consistent spending across months as an Eagle advertiser. Going forward, the business should focus sales efforts on expanding relationships with Iya Internet and Salon Sumi, as well as pursuing new advertiser Dana's Donuts, as these three appear poised for continued growth. Forecasting future quarters will require obtaining advertiser budgets and planned media spend by month to identify opportunities and risks.
International Financial Reporting Standards (IFRS) are designed to provide a common global language for business financial reporting to make company accounts understandable and comparable internationally. IFRS are replacing many different national accounting standards. Pakistan has adopted most IFRS, with some exceptions. This document discusses the history and standard-setting bodies of IFRS and Generally Accepted Accounting Principles (GAAP), the objectives and concepts of financial reporting, and how accounting standards are set in different jurisdictions and institutions.
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2. LEARNING OBJECTIVE:
1. Understand how financial reporting is regulated
and enforced in five European countries: France,
Germany, the Czech Republic, the Netherlands,
and the United Kingdom.
2. Describe the key similarities and difference among
the accounting systems of these five countries.
3. Identify the use of International Financial
Reporting Standards at the individual company
and consolidated financial statement levels in
these five countries.
4. Describe the audit oversight mechanisms in these
five countries.
3. IFRS IN THE EUROPEAN UNION
FINANCIAL REPORTING
IFRS financial statements consist of the
consolidated statement of financial position,
statement of comprehensive income, cash flow
statement, a statement of changes in equity, and
explanatory notes. Note disclosures must include:
Accounting policies followed
Judgments made by management in applying critical
accounting policies
Key assumptions about the future and other important
sources of estimation uncertainty
4.
5. IFRS IN THE EUROPEAN UNION
ACCOUNTING MEASUREMENTS (1)
Under IFRS, all business combinations are treated
as purchases. Goodwill is the difference between
the fair value of the consideration given and the fair
value of the subsidiary’s assets, liabilities, and
contingent liabilities. Goodwill is tested annually for
impairment.
Negative goodwill should be immediately
recognized in income.
6. …IFRS IN THE EUROPEAN UNION
ACCOUNTING MEASUREMENTS (2)
Translation of the financial statements of foreign
operations is based on the functional currency
concept.
The functional currency is the currency of the
primary economic environment in which the foreign
entity operates. It can be either the same currency
that the parent uses to present its financial
statements or a different, foreign currency.
7. …IFRS IN THE EUROPEAN UNION
ACCOUNTING MEASUREMENTS (2)
(a) If the foreign entity has a functional currency
different from the reporting currency of the parent, the
financial statements are translated using the current
rate method with the resulting translation adjustment
included in stockholders’ equity. (Under the current
rate method, assets and liabilities are translated at
the year-end, or current, exchange rate; revenues
and expenses are translated at the transaction rates
[or, in practice, the average rate].)
8. …IFRS IN THE EUROPEAN UNION
ACCOUNTING MEASUREMENTS (2)
(b) If the foreign entity has the same functional
currency as the reporting currency of the parent,
financial statements are translated as follows:
• Year-end rate for monetary items
• Transaction-date exchange rates for nonmonetary
items carried at historical cost
• Valuation-date exchange rates for nonmonetary
items carried at fair value Translation adjustments are
included in current period income.
9. …IFRS IN THE EUROPEAN UNION
ACCOUNTING MEASUREMENTS (2)
(c) If a foreign entity has the functional currency of a
hyperinflationary economy, its financial statements
are first restated for the effects of inflation, then
translated using the current rate method
10. …IFRS IN THE EUROPEAN UNION
ACCOUNTING MEASUREMENTS (3)
Research costs are charged to expense when
incurred. Development costs are capitalized after the
technical and commercial feasibility of the resulting
product or service has been established.
11. …IFRS IN THE EUROPEAN UNION
ACCOUNTING MEASUREMENTS (4)
Inventories are valued at the lower of cost or net
realizable value. FIFO and weighted average are
acceptable cost bases under IFRS, but LIFO is not.
12. FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
France
1. objectives and principles of financial accounting
and reporting
2. definitions of assets, liabilities, shareholders
equity, revenues, and expenses
3. recognition and valuation rules
4. a standardized chart of accounts, requirement for
its use, and other bookkeeping requirements
5. model financial statements and rules for their
presentation
13. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
France
ACCOUNTING REGULATION AND ENFORCEMENT
Five major organizations are involved in setting standards in
France:
1. Counseil National de la Comptabilite, or CNC (National
Accounting Board)
2. Comite de la Reglementation Comptable, or CRC
(Accounting Regulation Committee)
3. Autorite des Marches Financiers, or AMF (Financial Markets
Authority)9
4. Ordre des Experts-Comptables, or OEC (Institute of Public
Accountants)
5. Compagnie Nationale des Commissaires aux Comptes, or
CNCC (National Institute of Statutory Auditors)
14. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
France
FINANCIAL REPORTING French companies must
report the following:
1. Balance sheet
2. Income statement
3. Notes to financial statements
4. Directors’ report
5. Auditor’s report
15. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
France
A significant feature of French reporting is the
requirement for extensive and detailed footnote
disclosures, including the following items:
Explanation of measurement rules employed (i.e.,
accounting policies)
Accounting treatment of foreign currency items
Statement of changes in fixed assets and
depreciation
Details of provisions
Details of any revaluations
16. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
France
…..
Breakdown of receivables and liabilities by maturity
List of subsidiaries and share holdings
Amount of commitments for pensions and other
retirement benefits
Details of the impact of taxes on the financial
statements
Average number of employees listed by category
Analysis of turnover by activity and geographically
17. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
France
ACCOUNTING MEASUREMENTS
Tangible assets are normally valued at historical
cost. Although revaluations are allowed, they are
taxable and, therefore, are seldom found in
practice.
Fixed assets are depreciated according to tax
provisions, normally on a straight-line or declining
balance basis.
18. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
France
ACCOUNTING MEASUREMENTS
Inventory must be valued at the lower of cost or
realizable value using either First in, First Out
(FIFO) or weighted-average methods.
Research and development costs are expensed as
incurred, but may be capitalized in restricted
circumstances. If capitalized, research and
development costs must be amortized over no
more than five years.
19. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
Germany
ACCOUNTING REGULATION AND
ENFORCEMENT
Before 1998, Germany had no financial accounting
standard-setting function, as it is understood in
English-speaking countries. The German Institute
provided consultation in various processes of
lawmaking that affected accounting and financial
reporting, but legal requirements were absolutely
supreme. Similar consultation was given by the
Frankfurt Stock Exchange, German trade unions, and
accounting academics.
20. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
Germany
German law specifies different accounting, auditing, and
financial reporting requirements depending on company
size rather than the form of business organization.
There are three size classes—small, medium, and
large— defined in terms of balance sheet totals, annual
sales totals, and numbers of employees. Companies
with publicly traded securities are always classified as
large. The law specifies the content and format of
financial statements, which include the following:
1. Balance sheet
2. Income statement
3. Notes
4. Management report
5. Auditor’s report
21. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
Germany
ACCOUNTING MEASUREMENTS
Historical cost is the basis for valuing tangible assets.
(Germany is one of the world’s staunchest adherents to
the historical cost principle. Its strong anti-inflation
attitudes are the result of the ravages of the two
debilitating inflationary periods it went through in the
20th century.)
Inventory is stated at the lower of cost or market; FIFO,
LIFO, and average are acceptable methods of
determining cost.
Depreciable fixed assets are subject to tax depreciation
rates.
Research and development costs are expensed when
incurred.
22. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
Germany
Listed German companies must prepare their
consolidated financial statements in accordance
with IFRS. Other companies have a choice of using
either IFRS or German rules already described for
consolidation purposes. Both choices are found in
practice, and the reader of German financial
statements should be careful to know which
accounting standards are being followed.
23. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
Czech Republic
The administrative needs of various central
government institutions were satisfied through such
features as a uniform chart of accounts, detailed
accounting methods, and uniform financial
statements, obligatory for all enterprises. A focus on
production and costing, based on historical costs,
was emphasized over external reporting. A unified
system of financial and cost accounting used the
same pricing and other principles.
24. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
Czech Republic
• Of course, prices did not reflect the market forces of
supply and demand.
• They were centrally determined and controlled,
primarily on a cost plus basis.
• Losses were normally subsidized. Accounting was
of limited importance in managing an enterprise.
• Furthermore, accounting information was
considered to be secret and financial statements
were not published.
25. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
Czech Republic
ACCOUNTING REGULATION AND
ENFORCEMENT
The new Commercial Code was enacted by the
Czech parliament in 1991 and became effective on
January 1, 1992.
Influenced by the Austrian roots of the old
commercial code and modeled on German
commercial law, it introduced a substantial amount
of legislation relating to businesses.
26. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
Czech Republic
FINANCIAL REPORTING Financial statements must
be comparative, consisting of:
1. Balance sheet
2. Profit and loss account (income statement)
3. Notes
27. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
Czech Republic
ACCOUNTING MEASUREMENTS
• There are no guidelines for reporting foreign
currency translation adjustments.
• Tangible and intangible assets are valued at cost
and written off over their expected economic lives.
28. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
Czech Republic
ACCOUNTING MEASUREMENTS
• Inventory is valued at the lower of cost or net
realizable value, and FIFO and weighted average
are allowable cost-flow assumptions (LIFO is not).
• Research and development costs may be
capitalized if they relate to projects completed
successfully and capable of generating future
income.
29. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
The Netherlands
Dutch accounting presents several interesting
paradoxes. The Dutch have relatively permissive
statutory accounting and financial reporting
requirements but very high professional practice
standards. The Netherlands is a code law country, yet
accounting is oriented toward fair presentation.
Financial reporting and tax accounting are two
separate activities.
30. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
The Netherlands
ACCOUNTING REGULATION AND
ENFORCEMENT
Accounting regulations in the Netherlands remained
liberal until the passage of the Act on Annual
Financial Statements in 1970. The act was a part of
an extensive program of changes in company
legislation and was introduced partly to reflect the
coming harmonization of company law within the EU.
31. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
The Netherlands
FINANCIAL REPORTING
The quality of Dutch financial reporting is uniformly
high. Statutory financial statements should be filed in
Dutch, but English, French, and German are also
acceptable. The financial statements must include the
following:
1. Balance sheet
2. Income statement
3. Notes
4. Directors’ report
5. Other prescribed information
32. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
The Netherlands
ACCOUNTING MEASUREMENTS
• Although the pooling-of-interests method of accounting
for business combinations is allowed in limited
circumstances, it is rarely used in the Netherlands.
• The purchase method is the normal practice.
• Goodwill is the difference between the acquisition cost
and the fair value of the assets and liabilities acquired. It
is normally capitalized and amortized over its estimated
useful life, up to a maximum of 20 years.
• It may also be charged immediately to shareholders’
equity or to income.
33. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
The Netherlands
ACCOUNTING MEASUREMENTS
The Dutch flexibility toward accounting
measurements is most evident in permitting the use
of current values for tangible assets such as
inventory and depreciable assets.
When current values are used for these assets,
their corresponding income statement amounts,
cost of goods sold and depreciation, are also stated
at current values. Current value can be
replacement value, recoverable amount, or net
realizable value.
34. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
The Netherlands
ACCOUNTING MEASUREMENTS
Companies using current values should provide
additional historical cost information in the notes.
Historical cost is also acceptable. While much has
been made of current value accounting in the
Netherlands, few companies actually use it.
Philips, arguably the most conspicuous example,
started using current value accounting in 1951, but
abandoned it in 1992 in the interests of international
comparability.
35. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
The Netherlands
ACCOUNTING MEASUREMENTS
• When historical cost is used for inventory, it is generally
stated at the lower of cost or net realizable value, with
cost determined by FIFO, LIFO, or average methods.
• All intangibles are assumed to have a finite life, normally
no more than 20 years, and are amortized over that life.
• Intangibles with lives longer than 20 years must be
impairments tested each year.
• Research and development costs are capitalized only
when the amounts are recoverable and sufficiently
certain.
36. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
The Netherlands
ACCOUNTING MEASUREMENTS
Because Dutch companies have flexibility in applying
measurement rules, one would suspect that there are
opportunities for income smoothing.
37. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
United Kingdom
Accounting in the United Kingdom developed as an
independent discipline, pragmatically responding to
the needs and practices of business.
Over time, successive companies laws added
structure and other requirements, but still allowed
accountants considerable flexibility in the application
of professional judgment.
38. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
United Kingdom
Since the 1970s, the most important source of
development in company law has been the EU
Directives, most notably the Fourth and Seventh
Directives. At the same time, accounting standards
and the standard setting process have become more
authoritative.
39. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
United Kingdom
The legacy of British accounting to the rest of the
world is substantial. The United Kingdom was the first
country in the world to develop an accountancy
profession as we know it today.
40. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
United Kingdom
The concept of a fair presentation of financial results
and position (the true and fair view) is also of British
origin. Professional accounting thinking and practice
were exported to Australia, Canada, the United
States, and other former British possessions including
Hong Kong, India, Kenya, New Zealand, Nigeria,
Singapore, and South Africa.
41. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
United Kingdom
ACCOUNTING REGULATION AND
ENFORCEMENT
The two major sources of financial accounting
standards in the United Kingdom are companies law
and the accounting profession. Activities of
companies incorporated in the United Kingdom are
broadly governed by statutes called companies acts.
Companies acts have been updated, extended, and
consolidated through the years.
42. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
United Kingdom
ACCOUNTING REGULATION AND
ENFORCEMENT
Companies may choose from alternative balance
sheet formats and four profit and loss account
formats. The 1981 act also sets out five basic
accounting principles:
1. Revenues and expenses are matched on an
accrual basis.
2. Individual asset and liability items within each class
of assets and liabilities are valued separately.
43. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
United Kingdom
ACCOUNTING REGULATION AND
ENFORCEMENT
3. The principle of conservatism (prudence) is
applied, especially in the recognition of realized
income and all known liabilities and losses.
4. Consistent application of accounting policies from
year to year is required.
5. The going concern principle is applicable to the
entity being accounted for.
44. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
United Kingdom
FINANCIAL REPORTING
British financial reporting is among the most
comprehensive in the world. Financial statements
generally include:
1. Directors’ report
2. Profit and loss account and balance sheet
3. Cash flow statement
4. Statement of total recognized gains and losses
5. Statement of accounting policies
6. Notes referenced in the financial statements
7. Auditor’s report
45. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
United Kingdom
ACCOUNTING MEASUREMENTS
The United Kingdom allows both the acquisition
and merger methods of accounting for business
combinations. However, the conditions for the use
of the merger method (pooling-of-interests in the
United States) are so narrow that it is almost never
used.
Under the acquisition method, goodwill is calculated
as the difference between the fair value of the
consideration paid and the fair value of the net
assets acquired.
46. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
United Kingdom
ACCOUNTING MEASUREMENTS
Goodwill is capitalized and amortized over 20 years
or less; however, a longer period or an indefinite
period (resulting in no amortization) is possible if
goodwill is subject to an annual impairment review.
47. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
United Kingdom
ACCOUNTING MEASUREMENTS
Assets may be valued at historical cost, current
cost, or (as most companies do) using a mixture of
the two.
Thus, revaluations of land and buildings are
permissible.
Depreciation and amortization must correspond to
the measurement basis used for the underlying
asset.
48. … FIVE NATIONAL FINANCIAL
ACCOUNTING SYSTEMS
United Kingdom
ACCOUNTING MEASUREMENTS
Research expenditures are written off in the year of
the expenditure, and development costs may be
deferred under specific circumstances. However, in
practice, few British companies capitalize any
development costs.
Inventory (referred to as “stocks”) is valued at the
lower of cost or net realizable value on a FIFO or
average cost basis; LIFO is not acceptable.