Gaap Essays (Examples)

GAAP

Generally Accepted Accounting Principles in Health Care

GAAP (generally accepted accounting principles) in health care

Within the United States, all businesses that keep financial records must adhere to GAAP or generally accepted accounting principles, including both for-profit and not-for-profit healthcare entities. "GAAP is not a single accounting rule, but rather the aggregate of many rules on how to account for various transactions" (Kramer & Applebaum 2013). The first two principles of GAAP are that "financial records must be separately maintained for each economic entity" in a separate fashion and that "an economic entity's accounting records include only quantifiable transactions. Certain economic events that affect a company, such as hiring a new chief executive officer or introducing a new product, cannot be easily quantified in monetary units and, therefore, do not appear in the company's accounting records" (GAAP, 2013, Houghton Mifflin Harcourt). These details may be included as qualitative data…

References

GAAP. (2013). Houghton Mifflin Harcourt. Retrieved:

 http://www.cliffsnotes.com/more-subjects/accounting/accounting-principles-i/principles-of-accounting/generally-accepted-accounting-principles 

Kramer, J & Applebaum, S. (2013). Accounts receivable from third-party payors: A GAAP

refresher. South Florida Hospital News. Retrieved from:

GAAP is a set of specific common guidelines, provided by the institutions such as the Financial Accounting Standards oard, the American Institute of Certified Public Accountants and the Securities and Exchange Commission, about "acceptable accounting practices"

These acceptable practices should not necessarily be regarded as a set of ground rules. In fact, it is a common denominator, useful when foreign firms, especially auditing companies, proceed to financial verifications. The GAAP provide for an easier task from the auditing companies and anybody else who interprets the financial statements.

In the case of Legal Plan Services, the GAAP guidelines will provide the necessary information that will permit a common evaluation, a common ground on which revenue and expenses can be considered. esides being interpretable by more than one side, the GAAP guidelines are, in this case, rules which allow for the company's accounting methods to be understood by others and would permit,…

Bibliography

1. What are Generally Accepted Accounting Principles?. On the Internet at  http://www.allbusiness.com/articles/content/17954.asp 

2. Issues Related To The Recognition pf Revenues and Liabilities. The Financial Accounting Standards Board. March 2002. Page 1. On the Internet at  http://www.fasb.org/ proposals/recognitionrev& liab.pdf

3. Statement of Financial Accounting Standards No. 48 - Revenue Recognition When Right of Return Exists. Financial Accounting Standards Board. June 1981. Page 4. On the Internet at

Organizations Establish ules for the Creation or Use of Accounting Information:

- Securities and Exchange Commission

- New York Stock Exchange

Internal evenue Service

Describe what kind of rules each makes, why they make them, and how they enforce them. Which organizations make laws, and which publish guidelines? What is the difference? What are the different consequences for those who bend various sets of rules? (Causey Enron case) How might Causey's defense be stronger or weaker under IFS guidelines rather than GAAP?

The rules that govern the three organizations may not be specifically made by that organization, but they are enforced by it. The Securities and Exchange Commission (SEC) is not a law or even rule making body, but the members do suggest legislation and, as one of its main functions, enforces the laws that have been passed by congress (SEC, 2012). The New York Stock Exchange (NYSE) is a…

References

Atwood, T.J., Drake, M.S., Myers, J.N., & Myers, L.A. (2011). Do earnings reported under IFRS tell us more about future earnings and cash flows? Journal of Accounting & Public Policy, 30(4).

Crovitz, L.G. (2008). Closing the information GAAP. Wall Street Journal. Retrieved from  http://online.wsj.com/article/SB122083366235408621.html ?mod=hpp_us_inside_ today

Ernst & Young. (2010). U.S. GAAP vs. IFRS. Retrieved from  http://www.ey.com/Publication/vwLUAssets/IFRS_vs_US_GAAP_Basics_March_  2010/$FILE/IFRS_vs_US_GAAP_Basics_March_2010.pdf

Fowler, T., & Roper, J.C. (2005, Dec 28). Causey pleads guilty leaving just Skilling, Lay. Houston Chronicle. Retrieved from  http://www.chron.com/business/enron/article/Causey-pleads-guilty-leaving-just - Skilling-Lay-1943273.php#page-2

Accounting

Several terms and definitions are valuable to understand financial statements. In the United States, financial statements of public corporations are produced in accordance with the U.S. Generally Accepted Accounting Principles. These principles govern how the information for financial statements is compiled and presented. The purpose of these principles is so that all stakeholders can easily understand the statements and make comparisons across both time and across different companies, because the statements are produced and presented in a consistent manner. The International Financial eporting Standards (IFS) are the international equivalent of GAAP. While several countries utilize a national version of GAAP (U.S., Canada, UK, etc.), more than 100 countries use IFS, making this set of standards the most widely-adopted in the world. There is a move to converge national GAAP standards with IFS, including a multi-year project to converge U.S. GAAP with IFS. For now, however, IFS represents a different…

References:

No author. (2012). Generally accepted accounting principles (GAAP). Investopedia. Retrieved August 18, 2012 from  http://www.investopedia.com/terms/g/gaap.asp #axzz23vrKSd9Q' target='_blank' REL='NOFOLLOW'>

Turning a Hobby into a Business: This is Where the Cowboy ides Away with a Profit

I was fortunate to spend part of my childhood on a working cattle ranch. I learned how to ride horses, rope, work cattle, shoot, and hunt. Though my uncle, who owned the cattle ranch, sold it when I was still relatively young, I have always considered "cowboying" to be one of my hobbies. I have not pursued the professional rodeo route of my hobby. While I have respect for those men and women that earn their livings in the rodeo, to me, being a cowboy or cowgirl is about having the practical skills one needs to live on a ranch. I have kept in contact with my uncle's old ranch acquaintances, and I have worked part-time on their ranches, keeping up my skills. For a long time, I thought that the skills I acquired…

References

Accounting Coach, LLC. (2012). Income statement. Retrieved November 22, 2012 from Accounting Coach website:  http://www.accountingcoach.com/terms/I/income-statement.html 

Boer, G. (2001, July 24). A note on the preparation of pro forma financial statements.

Retrieved November 22, 2012 from Owen Graduate School of Management at Vanderbilt University website:  http://www2.owen.vanderbilt.edu/Germain.Boer  / entrepreneur/Proforma%20Financials/proforma.html

Forgeas, R. (2008, June 16). Is IFRS that different from U.S. GAAP? Retrieved November 22,

Accounting

The role of financial statements in investing is that they provide a consistent format that can be used by potential investors and other stakeholders to evaluate a company. There are several components that facilitate this happening. For publicly-traded firms, Generally Accepted Accounting Principles (GAAP) play a key role in the creation of financial statements. GAAP is a common set of accounting principles and procedures that companies use to compile their financial statements (Investopedia, 2012). ith companies having to produce their statements according to a common set of criteria, the information is easier to compare not only between different years at the same company, but also against other firms in the industry and all other publicly-traded firms.

The IFRS is essentially the international version of GAAP. Financial statements in many countries, especially those in Europe, are produced according to IFRS. There are a many areas where GAAP and IFRS diverge,…

Works Cited:

AICPA. (2011). International financial reporting standards (IFRS): An AICPA backgrounder. AICPA. Retrieved March 22, 2012 from  http://www.ifrs.com/pdf/IFRSUpdate_V8.pdf 

Beiersdorf 2011 Annual Report. Retrieved March 22, 2012 from  http://www.beiersdorf.com/GetFile.ashx?id=3243 

Investopedia (2012). Generally Accepted Accounting Principles (GAAP). Investopedia. Retrieved March 22, 2012 from  http://www.investopedia.com/terms/g/gaap.asp #axzz1pmKm2c8C' target='_blank' REL='NOFOLLOW'>

Business Plan

Business Financial Plan for Sweet Tooth Treats

Baking has always been a major part of my family life, and for generations there has been infamous cookie recipes past down from one cook to the next. Every holiday season, my cookies are notorious for being the best any gift receivers have ever had. Finally, I believe it is time to make my baking hobby and actual money making enterprise. I know I have the recipe, the potential customers, and options for both retail space and an online presence. The only thing missing is the initial push to make this hobby an actual business -- Sweet Tooth Treats.

Business Start Up Plan

Product

The essentially product here is the various cookies, of different flavors and ingredients. I have several recipes for cookies, both permanent and seasonal variations. These products will be sold in both individual sales at a retail location,…

References

Colorado Small Business Association. (2012). The beginning balance sheet. Documents. Web.  https://www.coloradosbdc.org/DocumentMaster.aspx?doc=4 

Damrauer, Virginia Hire. (2010). One Good Cookie. National University. Web.  http://www.academia.edu/346438/One_Good_Cookie_A_Business_Plan 

Hub Pages. (2012). How to start your own cookie business from home. Small Business and Entrepreneurs. Web.  http://kathrynvercillo.hubpages.com/hub/Start_Your_Own_Cookie_Business 

Office of Financial Management. (2012). Generally Accepted Accounting Principles (GAAP). Accounting Principles. Web.  http://www.ofm.wa.gov/policy/80.20.htm

WorldCom

Prior to the corporate financial scandal, WorldCom was one of the largest long distance telephone companies (euters, 2003). Initially headquartered in Mississippi it later moved to Virginia. The company grew fast by acquiring other companies such as MCI Communications in 1998 and UUNET technology in 1996. Other companies acquired included, Metromedia in 1992, esurgens Communications Group in 1993. In the course of this acquisition spree, WorldCom undertook two complex takeovers. The first was the 1998 acquisition of CompuServe from H& Block where it retained the network division, sold off the online service to American Online (AOL) and the second, the acquisition of Digex in 2001, and disposed of all Digex assets to Allegiance Telecom (Kaplan & Kiron, 2004). With these acquisitions, it gained a favorable reputation in the market as a company with a solid foundation.

Facts of the WorldCom Case

The WorldCom fraud case is one of the…

References

Kaplan, R.S., & Kiron, D. (2004). Accounting Fraud at WorldCom. HBS Premier Case Collection .

Reuters. (2003, April 14). WorldCom to emerge from collapse. Retrieved from www.cnn.com: http://edition.cnn.com/2003/Business/04/14/worldcom/

Ryerson, F. (2009). Improper Capitalization and The Management of Earnings. Las Vegas: Macon State College.

The Securities and Exchange Commission, 02 Civ. 3288 (United States District Court For the Southern District of New York June 26, 2002).

Controlling Costs

The question does offer some good ideas and thoughts to keep in mind when it comes to controlling costs. Indeed, having internal employees as opposed to external employees like contractors and the like that cannot be directly controlled in all aspects by the project management team is usually advantageous. However, these exterior employees and their associated costs can be controlled via an agreed price in advance that will not vary based on the acumen (or lack thereof) of the people working on the project unless something unforeseeable changes or is revealed. In that case, the costs are going to go up regardless of whether the costs are internal or external.

As it relates to electricity being a "hidden cost," it has to be expected that a construction project that uses any electricity from the site/client itself is going to cost money. As such, there should be an expected…

References

PMI. (2013). A Guide to the Project Management Body of Knowledge: PMBOK (R) Guide (5th

ed., pp. 1-589). New York: Project Management Institute.

Rodriguez, F. (2010). Impact of revenue recognition methods in project cost control through earned value. PMI Virtual Library. Retrieved from  http://pmqlinkedin.files.wordpress.com/2010/07/impact-of-revenue-recognition-methods -

in-project-cost-control-through-earned-value.pdf

hese preferences aside, American multinationals like PepsiCo and Procter & Gamble, are examining how a possible shift away from GAAP would affect their revenue recognition, taxation, and hedge accounting in the near and far future. In many cases, the overall, self-interested impression is positive as IFRS tend to make a company's returns look higher. But for smaller U.S. companies without an outreach abroad, the advantages of a switch to IFRS are less clear, as they have not been keeping two books all along like multinationals. More time-consuming (an estimated 18-24 months) headaches and paperwork as companies switch to IFRS seem likely -- and a tremendous financial drain is almost certain upon all organization's revenues during the period of transition. "Procter & Gamble hasn't pinned down an exact number, but expects a conversion project would cost tens of millions of dollars" (Johnson 2008, p. 2). European companies who have already switched…

These preferences aside, American multinationals like PepsiCo and Procter & Gamble, are examining how a possible shift away from GAAP would affect their revenue recognition, taxation, and hedge accounting in the near and far future. In many cases, the overall, self-interested impression is positive as IFRS tend to make a company's returns look higher. But for smaller U.S. companies without an outreach abroad, the advantages of a switch to IFRS are less clear, as they have not been keeping two books all along like multinationals. More time-consuming (an estimated 18-24 months) headaches and paperwork as companies switch to IFRS seem likely -- and a tremendous financial drain is almost certain upon all organization's revenues during the period of transition. "Procter & Gamble hasn't pinned down an exact number, but expects a conversion project would cost tens of millions of dollars" (Johnson 2008, p. 2). European companies who have already switched from their local systems to IFRS estimated that they spent an average 0.05% of their revenue in their first year of switching from their local standards to IFRS (Johnson 2008, p. 2).

Additionally, not all U.S. firms will show higher profits if there is a total transition to IFRS. International standards bar the use of LIFO (last in, first out) accounting, which confers sizable tax benefits to some companies in many industries. However, like it or not, a shift away from GAAP seems to be the trend of the future: even smaller European companies which chafed at the retreat from their homegrown GAAP were forced to comply eventually. "The EU's smaller companies, with less exposure to IFRS, took longer to respond to the mandate. Many didn't get serious until the year before filings were due…there's something to be said for taking a wait-and-see approach and letting the standard-setters continue to work on convergence" (Johnson 2008, p.2). Methods of revenue recognition, accounting for pensions and leases, and financial-statement presentation are all points of controversy between the two systems at present within the U.S.

Yet the difficulties of the transition, particularly for U.S. firms, may be overstated: "it is apparently much easier to transition from a more prescriptive set of standards to one that allows more judgment" (Johnson 2008, p.3). Because America's GAAP is so rigorous in nature, U.S. companies may experience less heartache than their European counterparts who transitioned from less scrupulous local standards to international standards. The benefits of a homogeneous international standard will likely be enjoyed by all in the very long run in this global economy, but the transition may be painful for some firms -- and more financially gut-wrenching for smaller U.S. institutions than large ones.

Business Plan

Description of the Business

The business is a gourmet candy shop. The shop will sell gourmet candy that has been sourced from all over the world. The shop will operate with one storefront location, and there will be an Internet/mail order component as well.

The rationale for the business is simply. There is a growing trend towards hedonistic approaches to dining. We have seen in the past few years the rise of the bacon fetish, high end craft beer and coffee, cupcakes, the move of fine dining to the mass market and a full embrace by Americans of better quality indulgent goods. Much of this trend can be credited to the aging of the population, as people seek to maximize pleasure. They have the financial means to treat themselves, and seek to balance this hedonism with a desire to be healthy. The intersection of these ideals is where…

References

Bailey, E. (2013). Pros and cons of incorporation. Suite101.com. Retrieved November 14, 2013 from http://suite101.com/a/pros-and-cons-of-incorporation-a42401

FASB. (2013). International convergence of accounting standards. Financial Accounting Standards Board. Retrieved November 14, 2013 from  http://www.fasb.org/ jsp/FASB/Page/SectionPage&cid=1176156245663

IRS.gov. (2013). Publication 946. Internal Revenue Service. Retrieved November 14, 2013 from  http://www.irs.gov/publications/p946/ar02.html#en_US_2012_publink1000270861 

NCA. (2013). Profile of the U.S. candy industry. National Confectioners' Association. Retrieved November 14, 2013 from  http://www.candyusa.com/content.cfm?ItemNumber=1607

Financial Standards

eporting standards for financial transactions have been varied with regard to countries and companies across the globe for many years. This fact has made it difficult for transactions to be reported with any great degree of accuracy. This was especially true in Germany where there was no true German GAAP. What the rest of the world has considered the German GAAP, the GoB, was actually comprised of here say and opinion gleaned from many different sources. With the advent of the IASB that the European Union adopted in 2007, Germany has finally decided on a single standard with which to govern financial reporting. Large companies within the country, such as Deutsche Bank, have had to make adjustments to the new standards, but this does not seem to have caused a problem. Since the country has loosely used international standards for many years, the new IASB is not new…

References

Bonthrone, R. (2000). German financial accounting and reporting. Translation Journal, 4(3). Retrieved from  http://translationjournal.net/journal/13finan.htm 

Deutsche Bank. (2011). Company. Deutsche Bank. Retrieved from  http://www.db.com/en/content/company/company.htm 

Feige, P. (1997). How "uniform" is financial accounting in Germany? European Accounting Review, 6(1), 109-122.

Gornik-Tomaszewski, S., & McCarthy, I.N. (2003). Cooperation between FASB and IASB to achieve convergence of accounting standards. Review of Business, 24(2), 52-61.

alternative accounting methods that have become increasingly popular. There are various merits and demerits of obtaining each of the accounting method for a firm however a company must choose the accounting method carefully as it proves to be a vital decision for the success of a company.

Accounting Methods are the guidelines and the basic rules based on which the businesses prepare and maintain their financial records. There have been a vast development in the accounting methods and practices over the years; however the two main accounting methods remain the same which are a) IFS (International Financial eporting Standards) b) U.S. GAAP (Generally Accepted Accounting Principle)

IFS (International Financial eporting Standards) were deigned to cater to the globalization of the businesses by providing an accounting method which is comparable and understandable beyond the regional boundaries. It was initiated to standardize the accounting methods for European nations by the European Council,…

References:

Ball R. (2006). International Financial Reporting Standards (IFRS): pros and cons for investors. Accounting and Business Research

Crovitz, L. Gordon (2008-09-08). "Closing the Information GAAP." The Wall Street Journal.

International Accounting Standards Board (2007): International Financial Reporting Standards 2007, LexisNexis,

Jeffers, Agatha; Mengyu Wei, Sidney Askew (2010). "The Switch from U.S. GAAP to IFRS." Proceedings of the Northeast Business & Economics Association

.....mission of the Emerging Issues Task Force (EITF) exerts upon the Financial Accounting Standards Board (FASB)

The Emerging Issues Task Force (EITF) was established with the main purpose of addressing and coming up with resolve for current issues being faced by professionals in the accounting field, which were not addressed by announcements of the Financial Accounting Standards Board (FASB). Prior to the establishment of ETIF in 1984, the FASB constantly faced challenges of not being able to offer well-timed and sensible solutions to developing practice problems. The EITF was therefore designed to disseminate and propagate carrying out guidance within the structure of the Accounting Standards Codification to decrease multiplicity when it comes down to it on a well-timed basis. In their field of profession, accountants experience a wide range of issues that are not comprehensively addressed in accounting pronouncements, and, which necessitate prompt resolve. In addition, such professionals insist that…

1-6 Summary

The accounting convergence project of the FASB and IASB has proceeded slowly, despite a new deadline of 2014 from the SEC. There remain several key issues that are bogging down the conversion process. This dissertation will outline where American public companies stand on this issue. It will attempt to ascertain how much they understand about the convergence process and how prepared they are for full conversion to international financial reporting standards.

orks Cited:

AICPA. (2010). IFRS primer for audit committees. AICPA. In possession of the author.

American Bar Association (2010) Program: International financial reporting standards: Implications of accounting convergence for business lawyers. American Bar Association. Retrieved November 2, 2011 from http://www.americanbar.org/content/dam/aba/publishing/business_law_today/buslaw_blt_content_2010_11_0005.pdf.

Barth, M., Landsman, ., Lang, M. & illiams, C. (2011). Are IFRS-based and U.S. GAAP-based accounting amounts comparable? Stanford University orking Paper No. 78.

Bratton, . (2011). Heedless globalism: The SEC's roadmap to accounting convergence. University of…

Works Cited:

AICPA. (2010). IFRS primer for audit committees. AICPA. In possession of the author.

American Bar Association (2010) Program: International financial reporting standards: Implications of accounting convergence for business lawyers. American Bar Association. Retrieved November 2, 2011 from  http://www.americanbar.org/content/dam/aba/publishing/business_law_today/buslaw_blt_content_2010_11_0005.pdf .

Barth, M., Landsman, W., Lang, M. & Williams, C. (2011). Are IFRS-based and U.S. GAAP-based accounting amounts comparable? Stanford University Working Paper No. 78.

Bratton, W. (2011). Heedless globalism: The SEC's roadmap to accounting convergence. University of Cincinnati Law Review. Vol. 79 (2) 470-498.

Business Plan

The business that I am going to start is a small coffee microroastery and shop. The company will perform two basic functions. The first is a product function, the roasting of coffee beans. Green beans will be received by the company, roasted, and then both used in the shop and made available for a variety of retail channels. The second function will be a service function, based on the production and serving of beverages and light snacks. The staffing plan will be simple. The owner/manager/roaster will perform most of the management tasks associated with the shop. There will be an assistant manager who doubles with barista duties, as well as 4-6 part-time staff members, filling 3 FTEs in the barista/service function. This plan is based on experiences at other, similar operations, in addition to meeting a few other needs. One is the need to keep costs down, and…

Works Cited:

Inc. (2000). Cash vs. accrual accounting. Inc. Magazine. Retrieved November 13, 2012 from  http://www.inc.com/articles/2000/04/19194.html 

IRS.gov (2012). Limited liability company (LLC). Internal Revenue Service. Retrieved November 13, 2012 from  http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Limited-Liability-Company-%28LLC%29 

KPMG. (1999). Internal control: A practical guide. KPMG. Retrieved November 13, 2012 from www.ecgi.org/codes/documents/kpmg_internal_control_practical_guide.pdf

Perez, W. (2012). Types of business organization. About.com. Retrieved November 13, 2012 from  http://taxes.about.com/od/taxplanning/a/incorporating_2.htm

This can be defined at the system level of the consultancy's network architecture. Finally the firewall of the systems will be defined also through the definition of system parameters throughout the network operating system running the entire firm (Malecki, 2012). There will be little resistance to change for each of these implementations as they are designed to protect and streamline the work being completed in the firm. There will also be a clearer sense of accountability over data security once the Practice Leaders and senior consultants realize that if they accidentally lose their iPhone, iPad or laptop all data will be erased immediately, which forces them to be more vigilant how they uses these systems and also how they are backed up.

Impact of the egulatory Environment

As the proposed research and advisory firm is a private corporation, it does not need to comply with the Sarbanes-Oxley (SOX) Act as…

References

Cox, J. (2009). iPhone winning over it security skeptics. Network World, 26(34), 1-1,12.

Hamblen, M. (2012). iPhone 5: Pros and cons in the enterprise. Computerworld, 46(17), 6-6.

Henry, E., Lin, S., & Ya-wen Yang. (2009). The European-U.S. "GAAP gap": IFRS to U.S. GAAP form 20-F reconciliations. Accounting Horizons, 23(2), 121-150.

Malecki, F. (2012). Next-generation firewalls: Security with performance. Network Security, 2012(12), 19-20.

reporting of capital and operating leases and their impact on fair value measurements. The essay surveys lease accounting standards from 1976 thru the present.

The basic principle of lease accounting is that some leases are merely rentals, while others are in effect purchases. U.S. regulations that specify lease accounting rules are issued by the Financial Accounting Standards Board (FASB). The primary FASB statement on leases was Number 13, issued in 1976, and is also known as FAS 13, SFAS 13 and FASB 13. Over the years it has been amended several times by additional FAS, including FAS 22, FAS 23, FAS 27, FAS 28, FAS 29, FAS 98, and FAS 121. In addition to financial accounting standards, various interpretations and technical bulletins have also been issued to provide additional guidance. Lease accounting rules were previously labeled as section L10 in the FASB Current Text, while the new FASB Codification uses…

Works Cited

Epstein, Barry J. "Accounting for Leases IFRS vs. GAAP. " IFRS Accounting. 2011. 16 September 2011. .

"History of Lease Accounting (Agenda Paper 2)." Joint International Working Group on Leasing. International Accounting Standards Board and Financial Accounting Standards Board. London. 15 February 2007.

"Leases (Topic 840)." Financial Accounting Standards Board. August 17, 2010: 1. Financial Accounting Foundation. 2011. 16 September 2011. .

"Lease Accounting Rules." Financial Computer Systems, Inc. 2007. 16 September 2011. .

Bhp

The company I am studying is BHP Billiton, the Australian mining company whose ADs trade on the New York Stock Exchange under the symbol BHP. The following is an analysis of how its GAAP balance sheet would correspond to an economic balance sheet.

Cash, STI, Cash equivalents

Core Operations

eceivables

Core Operations

Inventories

Core Operations

Other Current Assets

Non-operating net assets

Net property, plant and equipment

Core Operations

Goodwill and other intangible

Non-operating net assets

Investments and advances

Non-operating net assets

Accounts receivable, non-current

Core operations

Deferred non-current accounts

Non-operating net assets

Other non-current accounts

Non-operating net assets

Payables

Debt claims

Long-term debt and capital leases

Debt claims

Deferred liabilities, non-current

Debt claims

Minority interest

Other capital claims

Provisions, long-term

Debt claims

Provisions, current

Debt claims

Current debt

Debt claims

Deferred liabilities, current

Debt claims

Current portion of LTD

Debt claims

Other current liabilities

Debt claims

Capital stock

Equity…

References:

MSN Moneycentral: BHP Billiton. (2013). Retrieved October 27, 2013 from  http://investing.money.msn.com/investments/stock-balance-sheet/?symbol=U.S.%3ABHP&stmtView=Ann 

BHP Billiton 2013 Annual Report. Retrieved October 27, 2013 from http://www.bhpbilliton.com/home/investors/reports/Documents/2013/BHPBillitonAnnualReport2013.pdf

This will of course change the methods in which companies in the U.S. do their accounting and report financial information, but a change in accounting methods should not lead to a major change in the way these companies actually perform their business.

If the transition to IFRS rather than GAAP is expected to change a company's business practices, it is only a sign that the transition needs to be made that much sooner. If a company makes business decisions based on the way it will be able to report that decision's financial effects, rather than on the real value of that decision, there is clearly something wrong with the accounting methods the company is using. The recent financial meltdown largely caused by questionable accounting practices (and tangentially exacerbated by a lack of international standardization in these practices) is definitely evidence that such practices need to be changed, and with an…

"AmEx profit triples, beating expectations."  http://money.cnn.com/2010/01/21/news/companies/American_Express_earnings/ 

This article describes the unexpected profit gains that New York-based credit card company American Express made in the fourth quarter of 2009. Though revenue remained flat when compared to the same quarter in 2008, near the height of the global recession, the six-and-a-half billion dollars that the company saw was nearly half-a-billion more than expected. This led to a profit of seven hundred and sixteen million, or sixty cents per share, in the three-month period. Much of this is due to a rise in consumer spending with the use of their AmEx cards, which rose for the first time in over a year during the fourth quarter of 2009. The percentage of credit card payments defaulting or failing to be made also dropped significantly in the quarter, boosting the company's earnings.

Though this is considered a significant improvement in the company's situation, analysts warn that the company could still see hard times as record unemployment levels continue to hurt many consumers, in both their willingness to spend and their ability to make their credit card payments. Although American Express is showing greater profits and revenue, it actually posted a larger revenue in the fourth quarter of 2008, with significantly higher earnings per share than the profits of the past quarter brought to investors.

The report reflects the actual figures. Variance columns are presented in comparing the actual with the revised budget. There is reconciliation between the budgetary basis and GAAP are presented on the comparison schedule. The major differences are in how they are reported. There are budgetary comparison schedules provided for reserve funds. All special reserves are included. ("Comprehensive Annual Financial eport," 2012)

3C. Look at the note that describes the basis of budgeting (usually in the Summary of Significant Accounting Policies). Is the budget prepared on the GAAP basis or some other basis? Are the differences, if any, between the budgetary basis and GAAP clearly explained? Does the note indicate that encumbrance accounting is used?

The budget is prepared on a GAAP basis. The differences between the two are clearly explained in the approaches. It is indicating that encumbrance accounting is not used. ("Comprehensive Annual Financial eport," 2012)

4A. Look at…

economic globalization over the past twenty years sparked demand for a single, worldwide set of high-quality accounting standards" (Benjamin 2012). The SEC's allowance for American companies with international holdings to use IFS supports convergence to some extent by providing an incentive for filers to use IFS. Companies that use IFS can be compliant with both U.S. And international filing requirements, without having to keep 'double books.' All firms with an international scope are now likely to consider using IFS because of its compatibility with U.S. And worldwide standards. Given the globalization of the economy, even small and mid-sized U.S. organizations may begin using IFS, which will make firms which use GAAP more isolated. Convergence will be facilitated, with a likely bias in the new, universal standards towards using IFS with minor (or no) modifications.

Q2. The EU is one of the most powerful trading blocks in the world. The wholesale…

References

Benjamin, Michael. (2012). IFRS convergence: What it means and where it stands. BPM.

Retrieved:

 http://www.bpmcpa.com/Library/IFRS-Convergence-Update-Feb-2012.asp#.UT_JkFesf5N 

Schneider, Bob. (2013). Accounting basics. Investopedia. Retrieved:

Business Description

The business created is an automated restaurant. Autodine Restaurant is a business venture that is expected to flourish and prosper in the forthcoming periods. This is an advanced business idea purposed to appeal to consumers within the market. The restaurant will provide meals and services similar to any 4-star hotel within the nation, and providing exclusive meals every Friday night. The general staffing plan is that human beings will cook the meals served within the restaurant. The rest of the work such as washing dishes, cleaning floors and serving of meals to the customers will be automated. The robots undertaking these services will be fully functional, being able to hear and understand different languages conveyed by consumers and being able to communicate in return (Cumming, 2012). In addition, the robots will be programmed to welcome the clients at the reception. This is meant to add to the appeal…

IAC (iordan)

Any company that is a leader in an industry knows that what they sell had better be both quality and innovative in order to compete within their designated industry. iordan Manufacturing is no different. iordan has long been a company that offers both quality and innovative products in the plastic molding and parts industry. It also has a strong internal structure that works harmoniously with the objectives of the company. Despite iordan's position as a leader in their industry, the company does face some internal challenges, which work against their company objectives. This paper will look at these areas that require improvement, including finance and accounting, training budget, shipping and receiving, human resources, and the new pyramid bottle cap design for The Taylor Group. The paper will utilize the Issue, ule, Analysis and Conclusion (IAC) method in each distinct area.

Finance and Accounting

Issue: One of the chief…

References

Association for Automatic Identification and Mobility: Technologies: RFID / What is RFID?.

(2011).

Retrieved on 19 April 2011:

 http://www.aimglobal.org/technologies/rfid/what_is_rfid.asp

Acquisition that I am studying is the Google acquisition of Motorola's mobile business, Motorola Mobility, for $40 per share, or a total of $12.4 billion (Google, 2012). Both companies are active in the mobile communication space, Motorola Mobile in the handset space and Google with its operating system. By acquiring the technology and patents of Motorola Mobile, the latter of which Google valued at $5.5 billion (Reisinger, 2012). The acquisition was made entirely with cash, of which Google has no shortage. There were also significant tax benefits associated with the deal, including the ability to reduce taxes as the result of the ongoing losses at the Motorola Mobility division, which will continue to be run independently. This paper will outline a number of issues pertaining to the accounting elements of this deal. Although both firms are American, they are multinational companies and there will be some theoretical explanation of how…

Works Cited:

Dignan, L. (2013). Google's Motorola purchase: Was it worth it? ZDNet. Retrieved March 2, 2013 from  http://www.zdnet.com/googles-motorola-purchase-was-it-worth-it-7000009356/ 

Google. (2012). Fact's about Google's acquisition of Motorola. Google.com. Retrieved March 2, 2013 from  http://www.google.com/press/motorola/ 

PWC. (2010). Accounting for business combinations. Price Waterhouse Coopers. Retrieved March 2, 2013 from  http://www.pwc.com/us/en/issues/business-combinations/assets/accounting-business-combinations-nci.pdf 

Reisinger, D. (2012). Google: Motorola's patents, tech are worth $5.5 billion. C/Net. Retrieved March 2, 2013 from  http://news.cnet.com/8301-1023_3-57479646-93/google-motorolas-patents-tech-are-worth-$5.5-billion/

Absorption costing is a costing method which treats all costs of production as product costs without considering whether these costs are variable or fixed (AccountingforManagement, 2013). Under the absorption costing method the cost of a unit product comprises direct materials, direct labor, and both variable and fixed overhead. This costing method allocates a portion of fixed manufacturing cost to each unit of a product along with the variable manufacturing cost (AccountingforManagement, 2013). It includes all costs of production as product cost. That is why it is often called a full costing method.

Under variable costing costs of production varying with output are treated as product costs. Product costs under this costing method therefore include costs of direct material, direct labor, and variable portion of manufacturing overhead. Fixed manufacturing cost does not therefore fall under product costs (AccountingforManagement, 2013). It is nevertheless, treated as period cost and just like selling and…

References List

AccountingforManagement. (2013). Variable Costing vs. Absorption Costing. Retrieved from  http://www.accountingformanagement.org/variable-vs.-absorption-costing/ 

Daphne, A. (2013). Why Variable Costing is not allowed with GAAP. Retrieved from http://www.ehow.com/info_8790382_variable-costing-not-allowed-gaap.html

Johnston, K. (2013). GAAP & Absorption vs. Variable Costing and Tax Implications. The Houston Chronicle.

Loss Contingency

A transaction between Company M. And Company W. has caused some serious accounting problems and a complex legal scheme and law set is necessary to figure out how to resolve this issue. Company M. And Company W. have been tied up in a long and drawn out legal battle over some copyright and patent infringement argument. In May 2007, W filed a claim against M. And a verdict was reached in September of 2009. This jury found that M. must pay W $18.5 for their mistakes. M did not like this and called for an appeal in November of 2009. More than one year later, the appeals court ruled in favor of M. And the jury's verdict was overturned. W was still upset and filed a petition for a rehearing the next month. That request for appeal was denied and the matter was over according to all legal…

References

Financial Accounting Standards Board. "Accounting Standards Codification." Viewed 17 Sep 2013. Retrieved from  https://asc.fasb.org/section&trid=2127165&analyticsAssetName=subtopic_page_section  &nav_type=subtopic_page

Nilsen, K. (2011). Renewed Focus on Loss Contingency Disclosures. Journal of Accountancy April 2011. Retrieved from  http://www.journalofaccountancy.com/Issues/2011/Apr/20113854.htm

By re-characterizing the epo 105 dealing as a sale, Lehman detached the account from its balance sheet (Durden, 2010).

Lehman frequently augmented its utilization of epo 105 transactions in the time previous to reporting interludes to decrease its openly reported net leverage and balance sheet. Lehman's intermittent reports did not reveal the money borrowing from the epo 105 transaction, even though Lehman had in reality borrowed tens of billions of dollars in these dealings, Lehman did not reveal the acknowledged responsibility to pay back the liabilities. Lehman utilized the money from the epo 105 dealings to pay off other dangers, thus dropping both the entire debts and the entire assets accounted for on its balance sheet and decreasing its power percentages. Therefore, Lehman's epo 105 dealing was made up of a two-fold procedure: performing epo 105 dealings followed by the utilization of epo 105 cash borrowings to pay down debts,…

References

Durden, Tyler. (2010). The "Repo 105" Scam: How Lehman Fooled Everyone (Including

Allegedly Dick Fuld) and How Other Banks Are Likely Doing This Right Now. Retreived

April 10, 2011, from Web site:  http://www.zerohedge.com/article/repo-105-scam-how-lehman-fooled-everyone-including-allegedly-dick-fuld-and-how-other-banks-a 

Goldstein, Jacob. (2011). Repo 105: Lehman's 'Accounting Gimmick' Explained. Retreived April

EITF as relates to the FASB

The Emerging Issues Task Force, abbreviated as the EITF, was formed in the year 1984. The EITF works to assist the FASB (Financial Accounting Standards Board) to improve financial reporting by providing timely identification, identification, discussion and resolution of issues in accounting which are within the FASB framework known as the Accounting Standards Codification. The framework represents the source of authoritative standards of accounting in general and reporting and is to be applied to nongovernmental entities. They are issued side by side to those of the SEC (Securities Exchange Commission) Beresford, 1998()

The EITF promulgates the guidance of implementation of financial and reporting procedures within the FASB framework in order to reduce the diversity in practice on a basis that is timely. The EITF was also created to minimize the need of the FASB to spend crucial effort and time to address narrow issues…

References

Beresford, D.R. (1998). THE FASB'S ACCOMPLISHMENTS TO DATE: ONE PARTICIPANT'S VIEWS. The Accounting Historians Journal, 25(2), 151-166.

Emerging Issues Task Force. (2012). Description and Status of Current Issues Retrieved May 20th, 2012, from  http://www.fasb.org/ jsp/FASB/Page/SectionPage&cid=1218220137528

Financial Accounting Standards Board. (2012). Statement of Cash Flows (Topic 230): Not-for-Profit Entities: Classification of the Sale of Donated Securities in the Statement of Cash Flows a consensus of the FASB Emerging Issues Task Force. Connecticut: Financial Accounting Standards Board.

May, J., Paul, R., & Uhl, B. (2009). EITF Snapshot. Greenville: Deloitte & Touche LLP.

Jim & Judy Choi's Bed & Breakfast

As Jim & Judy Choi's banker, no, they should not be congratulated on their "profit." Since they have not done anything related to their actual business activities and have not actually made any money from their business, there is no profit to address. Profit comes from making money in a business, not from saving money that would otherwise be used to prepare for that business. Many people do not understand the difference, however, and that gets them into trouble when they attempt to create balance sheets and keep their accounting books in order for their company. The Choi's, for example, have managed not to spend every dime they were loaned and that they previously had in the bank, but that is not the same thing as making a profit once their business has been opened. They can only make a profit once they…

References

Elliot, B. & Elliot, J. (2004). Financial accounting and reporting, London: Prentice Hall.

International Accounting Standards Board. (2007). The framework for the preparation and presentation of financial statements.

Tale of Stable Mable's Unstable Investment

John Smith

Accounting 101

Stable Mable is a privately held company with a fiscal year ending on September 30th. Because of its private status, the only external reporting requirement on the company is that they must provide audited annual financial statements to shareholders and other financial leaders.

In order to seek additional levels of income, Stable Mable invested $20 million into a mutual bond fund in October of 1997. By the end of the following fiscal year, the investment went south and had an unrealized holding loss of $1.3 million. Stable Mable had to classify and establish just how to adjust their financial statements for the investment's losses. Their options were to account for the losses as realized losses or to exclude the losses from earnings as a separate component of shareholders' equity.

In addition, decisions made now could effect future financial statements because…

That was the year that significant changes were made in the Securities Act and the rules for bringing class action lawsuits were adjusted and modified. Because of those changes, it became more important from a litigation standpoint to ensure that conservatism was used in accounting valuation. Because there are empirical differences between the contracting and litigation perspectives, there have been many discussions regarding them in the past and that will likely continue well into the future. Each accounting firm must do what it feels is in the best interest of both itself and its clients, but the avoidance of lawsuits is a highly significant issue to consider when a company is planning to focus on a particular accountancy option.

C. Income Tax Perspective

Because income taxes are so closely tied to earnings, it only stands to reason that there would be an accounting valuation issue as it relates to conservatism…

References

Ahmed, A.S., B. Billings, M.S. Harris and R.M. Morton. 2001. Accounting conservatism and cost of debt: An empirical test of efficient contracting. Working paper, Syracuse University.

Ahmed, A.S., R.M. Morton and T.F. Schaefer. 2000. Accounting conservatism and the valuation of accounting numbers: Evidence on the Feltham-Ohlson (1996) model. Journal of Accounting, Auditing & Finance 15 (Summer): 271-292.

American Institute of Certified Public Accountants, Committee on Accounting Procedures (AICPA). 1939. Accounting Research Bulletin 2.

Antle, R. And R. Lambert. 1988. Accountants' loss functions and induced incentives for conservatism. In Economic Analysis of Information and Contracts: Essays in Honor of John Butterworth, edited by G. Feltham, A. Amershi, and W. Ziemba. Boston, MA: Kluwer Academic Publishers.

accounting questions while the rest centers on the characteristics of two certain companies, those being Apple and Philips.

Accounting Questions & Answers

The first accounting question is why revenue recognition is a significant issue. ecognizing when revenue comes in, what specific revenue stems from and the exact amount of all of the above is a very vital part of the accounting process because it has a direct correlation and effect on the profit/loss of a company, the income statement, the cash flow statement and, to a lesser extent, the balance sheet. evenues are used to defray the costs of the goods/services that were disseminated and they need to be properly measured and accounted for, and in the time period to which they apply, so as to ensure that all of the affected and relevant financial statements reflect what is truly going on and when precisely it happens (McQuaig & Bille,…

References

Apple. (2012, December 6). Apple Inc. - Overview. Apple Inc. - Overview. Retrieved December 6, 2012, from  http://investor.apple.com/ 

McQuaig, D.J., & Bille, P.A. (2008). College accounting (9th ed.). Boston: Houghton Mifflin.

Philips. (2012, December 6). Philips Investor Info. Philips Electronics. Retrieved December 6, 2012, from www.philips.com/about/investor/index.html

Yahoo Finance. (2012, December 6). Yahoo! Finance - Business Finance, Stock Market, Quotes, News. Yahoo! Finance - Business Finance, Stock Market, Quotes, News. Retrieved December 6, 2012, from  http://finance.yahoo.com

Thus, if the asset's usefulness will decline consistently after the first year of usage, it is best to use one of the accelerated depreciation methodologies, which will calculate a higher depreciation rate in the first year of usage (when the asset is producing most for the company) and a lower one in the subsequent years, when the asset is less useful for the company. Accelerated methods include the declining balance method and the sum-of-the-years-digits methods.

3. Answering this question first requires a differentiation between accounting (and accounting related activities) and physical reality. For example, cost flow assumption may not always reflect physical flow. In accounting, inventory errors generally correct themselves in the following years, mainly because the accounting methodologies can regulate the values in the following years. But physically, of course, is something different.

4. Basically, GAAP allows various methods of inventory valuation because it seems appropriate for the company…

Hedging may be used to reduce risk. The three predominant types of hedging activities are fair value hedges, cash flow hedges, and foreign currency hedges. In this assignment, you will examine how hedging activities are reported.

Download (attached file) and complete the computational problem, which illustrates hedge computations. how or explain the calculations.

The current price of his bushel slightly decreased in July at $9.98 and then increased in December at $10.09.

In July, he sold 100,000 bushels at $9.99 with spot price being $10.00. He lost nothing.

In December the spot price was $9.98; the price decreased. He sold at $9.95 per bushel and actually made a profit of $4,000.

In December, however, the spot price for soybeans ($10.09) was higher than his future offset price making it non-profitable for him, $10,000

He won $4,000, he lost $1,000. His liability was $6,000

Compare and contrast the requirements for investments…

Sources

Deloitte IAS 39 -- Financial Instruments: Recognition and Measurement  http://www.iasplus.com/en/standards/standard38 

FASB Summary of Statement No. 133. Accounting for Derivative Instruments and Hedging Activities (Issued 6/98)

 http://www.fasb.org/ summary/stsum133.shtml

NY Times, (2012) Derivatives  http://topics.nytimes.com/top/reference/timestopics/subjects/d/derivatives/index.html

GASB

Persons who use governmental financial reports have different needs than those who use business financial reports. These different needs are shown in the way the framework of the accounting and reporting standards are set up. The GASB framework is geared towards being user-friendly to citizens and their elected representatives in government. These users are not the primary readers and/or targets of business reports. Thus, while some businesses might use mark-to-market accounting principles, like those employed by Enron prior to its collapse in the early days of the 21st century, GASB puts accountability and transparency at the top of its principles. The purpose of its accounting, in other words, is to show constituents what their government is doing with taxpayer dollars (eck, 2015).

One significant example of how GASB standards address differences between governmental and business financial reporting is the Congressional Budget Office, which shows the use of fund accounting…

References

BubbaLouis. (2006). 9/10/2001: Rumsfeld says $2.3 TRILLION Missing from Pentagon. YouTube. Retrieved from  https://www.youtube.com/watch?v=xU4GdHLUHwU 

National Association of State Retirement Aministrators. (2013). NASRA. Retrieved

from  http://www.nasra.org/files/Topical%20Reports/GASB/gasbdifferent.pdf 

Reck, J. (2015). Accounting for Governmental and Nonprofit Entities. NY:

Amazon's cash cycle so much shorter than that of competitor Barnes & Noble? How does this comparison affect financial management decisions of other retailers?

There are several reasons which explain why the Amazon Company has a shorter cash cycle than its competitor Barnes & Noble. First and foremost, Amazon is a much bigger company than Barnes & Noble both in terms of income and in the number of products that it sells. hile Barnes & Noble sells some things besides book and ebooks, this is their primary product. Amazon sells everything including books, although this is a very small portion of their income. Another reason for this is that Amazon is doing better financially than Barnes & Noble. The ebook trend has bitten into Barnes & Noble's income, which they tried to combat by creating their own ereader, the Nook but this was far less successful than the Amazon ereader,…

Works Cited

Ross, S., Westerfield, R. & Jordan, B. (2012). Fundamentals of Corporate Finance. 10th ed.

McGraw-Hill.

GASB Statement 34, Basic Financial Statements and Management Decisions

Select a local government in your state and review the financial statements and audit report for the county or municipality. The financial statements of the government selected should have at least three funds.

Located in Muscogee County, the city of Columbus, Georgia is the state's third-largest city with over 194,000 residents. The Consolidated Government of Columbus, Georgia recently released its latest Comprehensive Annual Financial eport (CAF) for the 2011 fiscal year. Among the various funds for which this report records accounting practices are the city's General Fund, Special evenue Funds, Debt Service Funds, and Capital Projects Funds.

Analyze the method of accounting used for the general fund and all other funds in existence by the government. Evaluate the reasoning for the use of the method of accounting for each of the funds as required by GASB.

According to Figure A-1, Major…

References

Hodge, P.J. Columbus Consolidated Government, Finance Department. (2012). Comprehensive annual financial report . Retrieved from website:

 http://www.columbusga.org/finance/Accounting_Docs/CAFR_FY11.pdf 

GASB. (1999). Summary of statement no. 34 basic financial statements -- and management's discussion and analysis -- for state and local governments.Governmental Accounting

Standards Board, Retrieved from  http://www.gasb.org/st/summary/gstsm34.html

Southwest Airlines. What types of budgets would you recommend for the company? Why?

Currently, the type of accounting standard that is being utilized by Southwest Airlines is Generally Accepted Accounting Principals (GAAP). This is the basic benchmark that has been implemented by many U.S. companies to more accurately account for: their budgets, expenses, assets and liabilities. Over the years, it has become common for most corporations to follow these different standards. ("2010 Annual Report," 2010) ("Generally Accepted Accounting Principles," 2011)

However, Southwest takes this process one step further by also including Pro Forma accounting standards as an alternate way of evaluating the company. This is when you are anticipating that certain events have occurred in the future and are listing them as revenues in the current quarter (such as: future earnings on a large contract that was signed). The idea with using this approach is to see how these revenues…

Bibliography

2010 Annual Report. (2010). Southwest Airlines. Retrieved from; http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9ODk3NDZ8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

Generally Accepted Accounting Principles. (2011). Investopedia. Retrieved from:  http://www.investopedia.com/terms/g/gaap.asp 

Pro-Forma. (2011). Business Dictionary. Retrieved from:  http://www.businessdictionary.com/definition/pro-forma-invoice.html 

US GAAP vs. IFRS. (2009). Ernest and Young. Retrieved from:  http://www.ey.com/Publication/vwLUAssets/IFRS_v_GAAP_basics_Jan09/$file/IFRS_v_GAAP_basics_Jan09.pdf

studied appeared a business accounting publications. A partial list publications article selected: The Accounting eview, Barrons, Wall Street Journal, Business Week, Fortune, Barrons, and Wall Street Journal.

GAAP article review:

Crovitz, Gordon L. (2008, September 8).Closing the information GAAP. The Wall Street

Journal. etrieved November 22, 2010 at http://online.wsj.com/article/SB122083366235408621.html

GAAP article review:

Crovitz, Gordon L. (2008, September 8).Closing the information GAAP. The Wall Street

Journal. etrieved November 22, 2010 at http://online.wsj.com/article/SB122083366235408621.html

The Wall Street Journal is famous for its pro-business, conservative editorials. So perhaps it is no surprise that in 2008, Journal editorial writer Gordon L. Crovitz praised the Securities and Exchange Commission (SEC)'s decision to mandate a shift to international accounting standards, in a phasing out of GAAP (Generally Accepted Accounting Principles) by 2016 for all U.S. firms. The Journal writer said that this was reflective of the "remarkably quickening pace of acceptance of a true lingua franca for…

Reference

Crovitz, Gordon L. (2008, September 8).Closing the information GAAP. The Wall Street

Journal. Retrieved November 22, 2010 at  http://online.wsj.com/article/SB122083366235408621.html 

Gibson, Scott. (2008, October). LIFO vs. FIFO: A return to the basics. RMA Journal. Retrieved November 22, 2010 at  http://findarticles.com/p/articles/mi_m0ITW/is_2_85/ai_n14897182/

International accounting - Evaluate research theories and methodologies to classify accounting systems internationally

The necessity of accounting standards is given by the fact that financial statements should describe financial performance in a fair and consistent manner. Lacking standards, users of financial statements would be required to master the accounting rules of each company, and any comparison between companies' performances would be almost impossible.

Accounting standards are essential to the healthy development of an international financial reporting structure. Around the world several accounting traditions have been developed as a response to the needs of users who are in need of the financial information. Some countries, for instance, chose to build the structure of accounting standards around the needs of private creditors, while other countries were more concerned with the needs of tax authorities or central planners. As a characteristic of the United States, the needs of participants in the capital markets…

Bibliography

1. SEC Concept Release: International Accounting Standards

SECURITIES AND EXCHANGE COMMISSION

17 CFR PARTS 230 and 240

RELEASE NOS. 33-7801, 34-42430; INTERNATIONAL SERIES NO. 1215]

International Financial eporting Standards

IFS and Canada

Canada was one of the first prominent nations involved in the North American Free Trade Agreement to consider switching their financial reporting to the International Financial eporting Standards. For years, Canada had been under the pressure of the United States to adopt a system aligned with the GAAP. Still, growing opportunities across the globe made the adoption of the IFS in Canada a better option. It was announced in early 2008 that the move was going to be made in Canada. Canada officially adopted the IFS standards in January of 2011 (PWC, 2014). Actually, the IFS standards were quite similar to the already existing Canadian GAAP standards. Thus the transition, for most businesses, was not extremely different than what they had encountered in the past.

The country made the official decision to adopt the IFS over their own GAAP system came in a…

References

Canadian Institute of Chartered Accountants. (2011). The CICA's Guide to IFRS in Canada. Web.  http://ocaq.qc.ca/pdf/ang/6_presse/infoca/2007/InfoCA1185_Guide_EN.pdf 

Canadian Institute of Chartered Accountants. (2012). IFRS Adoption in Canada: An Empirical Analysis of the Impact on Financial Statements. Web.  http://www.cga-canada.org/en-ca/ResearchReports/ca_rep_2013-10-03_IRFS.pdf 

IFRS. (2013). Canada. IFRS Application Around the World. Web.  http://www.ifrs.org/Use-around-the-world/Documents/Jurisdiction-profiles/Canada-IFRS-Profile.pdf 

PWC. (2013). IFRS Adoption by Country. Web.  http://www.pwc.com/en_US/us/issues/ifrs-reporting/publications/assets/pwc-ifrs-by-country-apr-2013.pdf

However, when a shock happens that changes that pattern, the information is no longer relevant. In periods of turmoil, only the most up-to-date information is relevant. The usefulness of the information wanes quickly as the behavior of the company becomes more erratic. After a period of erratic behavior and change, the company may be forced to make internal changes that affect the way they do business. They may make changes that affect their inventory management, sales cycle, stock levels, supply chain, distribution network or other fundamental business functions. New patterns may emerge and the old information no longer applies.

The term "relevancy" can have many different meanings depending on what is happening with the company. A new accounting regime may need to be instituted when a change takes place. Looking at the most recent historical information is one way to determine the relevancy of the accounting information. The analyst needs…

References

Cadwalader, Wickersham, & Tact LLP. 1999. Application of the Safe Harbor for Forward-

Looking Statements. Findlaw. Accessed April 23, 2009

.

Giroux, G. (n.d.). American Big Business and Cost Accounting. In a Short History of Accounting and Business. Accessed April 23, 2009

Accounting, by its nature, requires a set of standards that are exactly the same industry-wide. If there were not established rules for determining revenues, profits, expenses, and other influences on a company's bottom line, there would be no way to evaluate a corporation's effectivity, production, or potential. A lack of established standards would also mean that no two companies could be honestly compared, since their accounting methods could be so significantly different that their financial statements showed vastly different accounting methods.

In light of these potential discrepancies in reporting methods, the bodies that govern accounting have established Generally Accepted Auditing Standards, or GAAS. Generally These principles are required to be applied in all accounting situations, and they are extensive enough so that almost every possible scenario has a standard response. Interest owed in Houston is reflected on a financial statement in the exact same way that interest owed in New…

globalization has been pushing many countries to create standards for accounting procedures that can be used around the globe. This is designed to improve transparency and the accuracy of financial information that is being provided (IFRS guidelines). To fully understand how this is taking place we will examine the differences between IFRS and GAAP standards. This will be accomplished by carefully examining the accounting procedures used by Apple and Philips. Once this occurs, is when we will have the greatest insights as to underlying differences between both procedures.

Is there a difference in approach to valuation by U.S. GAAP and IFRS?

To fully understand the dissimilarities between the two standards we will examine several different factors to include: the way an expense / asset are accounted for, how current / long-term assets are calculated and the way current / long-term liabilities are determined. Once this takes place is when we…

Bibliography

2010 Annual Report. (2011), Philips. Retrieved from: http://www.annualreport2010.philips.com/downloads/index.asp?link_origin=global_en_ar2010_tailoredaccess

Apple 2011 Earnings. (2011). Apple. Retrieved from: http://files.shareholder.com/downloads/AAPL/1601237473x0xS1193125-11-282113/320193/filing.pdf

Capitalization. (2011). Business Dictionary. Retrieved from:  http://www.businessdictionary.com/definition/capitalization-cap.html 

Comparing the Differences between IFRS and U.S. GAAP. (2011). McGladrey. Retrieved from:  http://mcgladrey.com/IFRS-Bulletins/Comparing-Differences-Between-IFRS-and-U.S.-GAAP-in-the-Treatment-of-Intangible-Assets