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Giáo trình Comparative accounting 13th by christoper nobes parker .Giáo trình Comparative accounting 13th by christoper nobes parker Giáo trình Comparative accounting 13th by christoper nobes parker Giáo trình Comparative accounting 13th by christoper nobes parker Giáo trình Comparative accounting 13th by christoper nobes parker Giáo trình Comparative accounting 13th by christoper nobes parker
www.downloadslide.com COMPARATIVE INTERNATIONAL ACCOUNTING Visit the Comparative International Accounting, Thirteenth Edition Companion Website at www.pearsoned.co.uk/nobes to find valuable student learning material including: ● A mock exam of multiple choice questions to test your understanding ● Extensive links to valuable resources on the web ● Flashcards to test your understanding of key terms www.downloadslide.com www.downloadslide.com 13th Edition COMPARATIVE INTERNATIONAL ACCOUNTING Christopher Nobes and Robert Parker www.downloadslide.com Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearson.com/uk First edition published in Great Britain under the Philip Allen imprint 1981 Second edition published 1985 Third edition published under the Prentice Hall imprint 1991 Fourth edition published 1995 Fifth edition published under the Prentice Hall imprint 1998 Sixth edition published 2000 Seventh edition published 2002 Eighth edition published 2004 Ninth edition published 2006 Tenth edition published 2008 Eleventh edition published 2010 Twelfth edition published 2012 Thirteenth edition published 2016 © Prentice Hall Europe 1991, 1995, 1998 © Pearson Education Limited 2000, 2002, 2004, 2006, 2008, 2010, 2012, 2016 Chapter 17 (formerly 18) © John Flower 2002, 2004, 2006, 2008, 2010, 2012, 2016 The rights of Christopher Nobes and Robert Parker to be identified as authors of this Work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Barnard’s Inn, 86 Fetter Lane, London EC4A 1EN Crown Copyright material is reproduced with the permission of the Controller of Her Majesty’s Stationery Office (HMSO) and the Queens’ Printer for Scotland Pearson Education is not responsible for the content of third-party Internet sites ISBN 978-1-292-08190-8 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Nobes, Christopher, editor | Parker, R H (Robert Henry), editor Title: Comparative international accounting / Christopher Nobes and Robert Parker Description: 13th edition | Harlow, England ; New York : Pearson, 2016 Identifiers: LCCN 2015042325 | ISBN 9781292081908 (print) Subjects: LCSH: Comparative accounting Classification: LCC HF5625 C74 2016 | DDC 657 dc23 LC record available at http://lccn.loc.gov/2015042325 10 9 8 7 6 5 4 3 2 1 20 19 18 17 16 Typeset in 9.5/12.5pt Stone Serif ITC Pro Medium by Lumina Datamatics Printed in Slovakia by Neografia www.downloadslide.com Brief contents Contributors xvi Prefacexvii Part I SETTING THE SCENE 1 Introduction 2 Causes and examples of international differences 3 International classification of financial reporting 4 International harmonization 27 58 89 Part II FINANCIAL REPORTING BY LISTED GROUPS USING IFRS OR US GAAP 5 6 7 8 9 10 The context of financial reporting by listed groups The requirements of International Financial Reporting Standards Different versions of IFRS practice Financial reporting in the United States Key financial reporting topics Political lobbying on accounting standards – US, UK and international experience 119 151 186 203 236 267 Part III CHINA AND JAPAN 11 Financial reporting in China and Japan 303 Part IV FINANCIAL REPORTING BY INDIVIDUAL COMPANIES 12 13 14 15 The context of financial reporting by individual companies Harmonization and transition in Europe Making accounting rules for unlisted business enterprises in Europe Accounting rules and practices of individual companies in Europe 337 350 372 396 v www.downloadslide.com Brief contents Part V GROUP ACCOUNTING ISSUES IN REPORTING BY MNEs 16 Group accounting 17 Foreign currency translation 18 Segment reporting 423 443 483 Part VI MONITORING AND ENFORCEMENT vi 19 International auditing 20 Enforcement of financial reporting standards 515 545 Synoptic table of accounting differences in eight GAAPs, 2015 565 Glossary of abbreviations 568 Suggested answers to some of the end-of-chapter questions 574 Author index 592 Subject index 596 www.downloadslide.com Contents Contributors xvi Preface xvii Part I SETTING THE SCENE 1 Introduction Contents Objectives 3 1.1 1.2 1.3 1.4 1.5 Differences in financial reporting The global environment of accounting The nature and growth of MNEs Comparative and international aspects of accounting Structure of this book Summary References Useful websites Questions Causes and examples of international differences 15 18 21 23 24 25 26 27 Contents Objectives 27 27 28 28 31 33 37 41 42 43 44 2.1 Introduction 2.2 Culture 2.3 Legal systems 2.4 Providers of finance 2.5 Taxation 2.6 Other external influences 2.7 The profession 2.8 Conclusion on the causes of international differences 2.9 Some examples of differences Summary References Questions 52 53 57 vii www.downloadslide.com Contents 3 International classification of financial reporting 58 Contents Objectives 58 59 59 60 60 62 66 71 76 78 79 80 81 3.1 Introduction 3.2 The nature of classification 3.3 Classifications by social scientists 3.4 Classifications in accounting 3.5 Extrinsic classifications 3.6 Intrinsic classifications:1970s and 1980s 3.7 Developments related to the Nobes classification 3.8 Further intrinsic classification 3.9 Is there an Anglo-Saxon group? 3.10 Classification in an IFRS world 3.11 A synthesis of accounting classifications Summary References Questions 4 International harmonization Contents Objectives 4.1 Introduction 4.2 Reasons for, obstacles to and measurement of harmonization 4.3 The International Accounting Standards Committee 4.4 Other international bodies 4.5 The International Accounting Standards Board Summary References Useful websites Questions 83 84 88 89 89 90 90 91 94 103 107 112 112 115 116 Part II F INANCIAL REPORTING BY LISTED GROUPS USING IFRS OR US GAAP 5 The context of financial reporting by listed groups 119 viii Contents Objectives 119 119 120 121 5.1 Introduction 5.2 The legal and political context of international standards www.downloadslide.com Contents 5.3 5.4 5.5 5.6 5.7 5.8 Adoption of, and convergence with, IFRS IFRS in the EU IFRS/US differences Convergence of IFRS and US GAAP Reconciliations from national rules to US GAAP or IFRS International financial analysis Summary References Useful websites Questions 6 The requirements of International Financial Reporting Standards 121 125 128 133 134 136 144 145 149 149 151 Contents Objectives 151 152 152 154 159 161 162 166 167 169 170 6.1 Introduction 6.2 The conceptual framework 6.3 Presentation and accounting policies 6.4 Revenue and foreign currency transactions 6.5 Assets 6.6 Liabilities 6.7 Group accounting 6.8 Disclosures, and management commentary 6.9 Synthesis: the sources of the content of IFRS Summary References Further reading Useful websites Questions Appendix 6.1 An outline of the content of International Financial Reporting Standards 7 Different versions of IFRS practice 171 172 172 172 173 174 186 Contents Objectives 186 186 187 187 189 196 198 199 7.1 Introduction 7.2 Motivations for varied IFRS practice 7.3 Scope for varied IFRS practice 7.4 Examples of varied IFRS practice 7.5 Changes in IFRS practice over time 7.6 Implications Summary 200 ix www.downloadslide.com Subject index auditing definition 516 financial reporting in USA 229–230 international standards–list of 527 Auditing Practices Board (APB) 555 auditing standard-setters 524–530 European Union 528–529 IFAC 524–528 PCAOB 529 Australia accounting system 72, 75, 78, 81 adoption/convergence with IFRS 122, 123 balance sheet format 50 convergence with IFRS 136 disclosure practices 498 divergence from IFRS 189, 196–197 enforcement in 547, 548, 550, 558–559 comparisons 550 entity concept of group 426 financial reporting 351 gearing ratios 34 in IFAC 19 IFRS policy changes by companies 199 income statements 52 in international organizations 97, 102, 109 legal system 31, 32 MNEs 17 proportional consolidation 437 share ownership 13 SMEs in 344, 347 stock exchanges 10, 11 tax policy 39 Australian Financial Reporting Panel 558–559 Australian Securities Commission (ASC) 558 Australian Securities and Investment Commission (ASIC) 558–559 Austria accounting directives, implementation of 356 accounting system 78, 359 in Euro zone 446 financial reporting 341 gearing ratios 34 harmonization in 102 investor protection, ownership concentration and earnings management 138 Seventh Directive, implementation of 429 share ownership 14 Autorité des Marchés Financiers (AMF) 36, 547, 555 Autorité des Normes Comptables (ANC) 374, 375, 401 Bahamas 72 balance sheet formats 50 balance sheets (USA) 215, 216 BASF 38–39, 45, 134, 135, 166, 339, 357, 405, 406, 451, 464, 466 Bayer 130, 287, 339, 340, 466 Belarus, transition in 358 Belgium accounting directives, implementation of 356 accounting system 72, 75, 78 currency translation 451 enforcement in 547 in Euro zone 446 FDI from 17 financial reporting 341 gearing ratios 34 investor protection, ownership concentration and earnings management 138 MNEs 17 Seventh Directive, implementation of 429 share ownership 13 tax policy 39 Bilanzkontrollgesetz 557 Bilanzrechtsmodernisierungsgesetz (BilMoG) 377, 401–402, 404 Bilanzrichtliniengesetz 557 BMW 193 Board for Actuarial Studies 555 Bolivia 72 Bosnia 358 BP 484–485 Brazil accounting system 72 disclosure practices 498 exports as GDP percentage in IFAC 19 in international organizations 109 MNEs 17 stock exchanges 11 British sphere of influence and financial reporting 67–68 BT (British Telecom), 136 Bulgaria 358 Bundesanstalt für Finanzdiensleistungsaufsicht (BaFin) 36, 549, 550, 557 Business Accounting Deliberation Council (BADC, Japan) 308, 309, 314, 316, 317–318 business combinations, IFRS requirements 167 business combinations in USA 228 political lobbying from 1990 283–285 up to 1990 274–275 business environments, classification of (Mueller) 67 Canada accounting system 72, 75 adoption/convergence with IFRS 122 disclosure practices 498 enforcement in 546 FDI from 17 financial reporting 351 gearing ratios 34 in IFAC 19 in international organizations 95, 102, 109 legal system 32 MNEs 17 segment reporting 498 share ownership 13 stock exchanges 10, 11 capital markets auditing, demand from 519–520 597 www.downloadslide.com Subject index and financial analysis 139–143 and harmonization 102 cash flow statements 407 USA 218 Caterpillar 228, 464 Certified Public Accountants and Auditing Oversight Board (Japan) 559 Certified Public Accountants Law (Japan) 309 Chile 72 China 565, 566–567 Accounting Standards for Business Enterprises 321, 323 Accounting Standards Committee 322–323 convergence with IFRS 123, 136 disclosure practices 498 enforcement in 547, 548, 559 exports as GDP percentage harmonization in accounting context 320–321 accounting regulations of 1992 321–322 audit 324 companies using IFRS 327 developments after 1992 322–323 IFRS, differences from 324–327 in IFAC 19 in international organizations 109 legal system 32 MNEs 17 stock exchanges 10, 11 China Accounting Standards Committee (CASC) 322–323 China Petroleum and Chemical 432 China Securities Regulatory Commission (CSRC) 559 Chinese Institute of Certified Public Accountants (CICPA) 322, 324 Chrysler 12, 279 classification AAA’s morphology 61 clustering in classification in financial reporting 71–74 in accounting see financial reporting, classification in nature of 60 in social sciences 60–62 Code général des impôts (CGI) 376 codified Roman law 31, 32, 188 Cohen Committee 378 collectivism as cultural dimension 29 Colombia 72 colonial differences in accounting 41 Comité de la Réglementation Compable 374 Commission des Opérations de Bourse (COB) 36, 72, 425, 555 Commissione Nationale per le Società e la Borsa (CONSOB) 36 Committee on Accounting Procedure 209 Committee of European Securities Regulators (CESR) 245, 352, 552 common law 31, 188 communist accounting 360–361 pre-communist era 359–360 sphere of influence in financial reporting 68 Compagnie Nationale des Commissaires aux Comptes (CNCC) 375, 376, 548 Companies Act 1985 (UK) 378 598 Companies Act 1989 (UK) 378–379, 553, 554 Companies Act 2005 (Japan) 306, 307, 308, 309, 310, 315, 316 Companies Act 2006 (UK) 379, 407, 553 Companies (Audit, Investigations and Community Enterprise) Act 2004 (UK) 379, 554 Company Law Review Steering Group (CLRSG) 379 comparability, IFRS requirements 157 completeness 156 comprehensive income 261–264 translation of 467–470 current rate method 467–469 temporal method 469–470 Confederation of Asian and Pacific Accountants (CAPA) 106 Conseil National de la Comptabilité (CNC) 374, 375, 398, 400 conservatism accounting differences in 44–47 as accounting value 30 IFRS requirements 157 consistency, IFRS requirements 157 consolidation adoption of 424–425 and foreign currency 447 IFRS requirements 168 techniques of 433–439 equity method 434, 437–438 goodwill 434, 438–439 non-controlling interests 434, 436 pooling of interests 434, 435–436 proportional consolidation 434, 437 purchase accounting 433, 434–435 in USA 227–228 business combinations 228 goodwill 228–229 and parent company concept 440 scope 227–228 see also group accounting Consultative Committee of the Accountancy Bodies (CCAB) 554–555 contingent liabilities 251–252 convenience currency translations 136 convergence with IFRS 121–124 conversion of foreign currency 444 Coopers & Lybrand 71 corporate taxation in USA 226–227 corporatism in financial reporting 68–69 cost of goods sold in foreign currency translation 470 credit crunch 7–8 Croatia 358 cultural classification of financial reporting 68 cultural differences in accounting 28–31 currency translation 317–318 current purchasing power (CPP) accounting 279, 280 current rate method in foreign currency translation 446, 448 of comprehensive income 467–469 of financial statements 453–455 gain and losses, accounting for 470–472 and temporal method 458–462 Cyprus 341, 446 www.downloadslide.com Subject index Czech Republic enforcement in 547–548 financial reporting 341 publication requirements and practices 439–440 transition in 358, 363, 366 Daimler-Benz 12, 46 DaimlerChrysler 287 Dearing Report 209, 380, 553 debt restructuring (USA) 276–277 deferred taxation 256–261 in Japan 316 political lobbying in UK 280 defined-benefit obligations 253–254 Deloitte 204, 520, 523 Denmark accounting directives, implementation of 356 enforcement in 547–548 gearing ratios 34 harmonization in 93, 358 in international organizations 109 investor protection, ownership concentration and earnings management 138 MNEs 17 Seventh Directive, implementation of 429 Department for Business, Innovation and Skills (BIS) 553 depreciation accounting differences in 38 in foreign currency translation 469–470 and tax 258–259 Deutsche Bank 251 Deutsches Rechnungslegungs Standards Committee (DRSC) 378 developing countries, harmonization in 100 disclosures, IFRS requirements 169 distribution of income in national rules 342–343 dividends in Japan 316 Dunlop Ltd 425 DVFA (Germany), 139–140 earnings management 137, 138 earnings per share (EPS), 142 Eastern, Central and Southern Africa Federation of Accountants (ECSAFA) 106 Eastern and Central Europe harmonization 358–367 communist accounting 360–361 IFRS, applying 366–367 pre-communist era 359–360 transition, problems of 361–365 economic globalization economic substance 156 IFRS requirements 156 The Economist 305 Electrolux 259 Elements of financial statements 157–159 Elmendorff Report 353 Emerging Issues Task Force 210, 211 emerging nations, harmonization in 100 employee benefits 252–256 actuarial gains and losses 254 defined-benefit obligations 253–254 funding benefit obligations 255–256 IFRS requirements 166–167 institutional arrangements 252–253 stock options, political lobbying on 282–283 and convergence with IASB 293–294 USA 225–226 enforcement Australia 558–559 China 559 comparisons 550 EU 547, 551–558 France 555–557 Germany 557–558 Japan 559 modes and models 547–550 UK 553–555 USA 550–551 Enron 6, 110, 128, 207, 228, 431 entity concept of group 426 equity markets, strength of 33 equity method 434, 437–438 Ericsson 287 Ernst & Young (EY) 204, 232, 520, 523 Estonia 358, 361, 446 in Eurozone 446 ethics in audit process 532–534 Ethics Standards Board 555 Ethiopia 72 European Bank for Reconstruction and Development (EBRD) 361 European Commission 196, 353, 495 European Company 357 European Economic Interest Grouping (EEIG) 357 European Enforcers Co-ordination Sessions (EECS) 552 European Financial Reporting Advisory Group (EFRAG) 105–106, 125, 291, 494 Technical Expert Group 288 European Group of Auditors’ Oversight Bodies (EGAOB) 553 European Parliament 287 European Securities and Markets Authority (ESMA) 13 European Union 4, 6, 105 auditing standards 528–529 different versions of IFRS 187, 190 Eighth Directive 528, 552 enforcement in 547, 551–558 foreign currency translation 446, 450 Fourth Directive 353–357, 384, 387, 399, 557 group accounting in 427–430 harmonization in 90, 92, 94, 105, 351–358 directives and regulations 353, 357–358 European Company and EEIG 357 influence of 111 reasons for and obstacles to 351–352 research findings 358 IFRS in 125–128 adoption of 122, 123, 124 and optional IFRS 341–342 599 www.downloadslide.com Subject index political lobbying 286–290 accounting standard-setter, control of 291–292 on segment reporting 494–495 Seventh Directive 427–430, 462 Standards Advice Review Group 125 exchange rates in foreign currency translation 450–451, 479–480 extensible business reporting language (XBRL) 139 extraordinary items in Japan 317 extrinsic classification in financial reporting 66–70 and auditing competence 70 cultural classification 68 morphologies 67 Mueller’s 66–67 by regulatory style 68–69 regulatory variables 70 spheres of influence 67–68 F Hoffmann-La Roche 287 fair value 221, 243, 538–539 faithful representation, IFRS requirements 156–157 Fédération des Experts Comptables Européens (FEE) 105–106, 194, 257, 430, 547 femininity as cultural dimension 29 Fiji 72 FIN46 431 FIN46R 432 finance provision, accounting differences 33–37 Financial Accounting Foundation (FAF) 209, 210, 291, 343 Financial Accounting and Reporting Rules (FARR, China) 323 Financial Accounting Standards Advisory Council (FASAC) 209 Financial Accounting Standards Board (FASB) 128, 547 convergence with IASB 110 and adoption by 133 and political lobbying 276–277, 281–286, 293–294 financial reporting in USA 209–211 on foreign currency translation 457, 462, 463, 464–465 on revenue recognition 238, 240 on segment reporting 487, 488 Financial Accounting Standards (FAS) SFAS 457–458, 462, 463, 465, 470 SFAS 52 210, 450, 462, 463–465, 469, 471 financial assets 244–246 Financial Executives Institute (FEI) 274 financial instruments IFRS requirements 164–165 political lobbying, IASB on 288–289 Financial Instruments and Exchange Law (Japan) 306 financial liabilities 246 financial reporting classification in 62–65 extrinsic 66–70 and IFRS 80–81 intrinsic 63, 76, 78–79 by Nobes 76–78 synthesis of 81–83 differences in 4–5 600 improvement in 143 and national rules 341 Financial Reporting Enforcement Panel (FREP, Germany) 549, 550, 557 Financial Reporting Releases (of SEC) 207 Financial Reporting Review Panel (FRRP) 20, 380, 547, 548, 549, 550, 553–555 Financial Reporting Standards (FRSs) 379–380 FRS 218, 381 FRS 383 FRS 171, 216–217, 261, 383, 407 FRS 383 FRS 436 FRS 10 383, 427, 439 FRS 15 38, 382 FRS 17 171, 254 FRS 19 227 FRS 23 380, 383 FRS 25 383 Financial Reporting Standards for Smaller Entities (FRSSE) 380 Financial Services Action Plan (FSAP) 352 Financial Services Agency (FSA, Japan) 559 Financial Services Authority (FSA, UK) 553 Financial Stability Board (FSB) 528 financial statement formats, differences in 50–52 Financial Times 305 Finland accounting directives, implementation of 356 in Euro zone 446 investor protection, ownership concentration and earnings management 138 MNEs 12 non-state pension schemes 257 Seventh Directive, implementation of 429 share ownership 13 Fisher effect 456 flexibility as accounting value 30 Ford Motor Company 225, 429 foreign currency translation 136, 443–480 exchange rates, alternatives to 479–480 foreign language and 136 IFRS 465–467 research findings 476–479 revenue and 161–162 terminology 444–445 translation of comprehensive income 467–470 current rate method 467–469 temporal method 469–470 translation of financial statements 447, 452–455 current rate method 453–455 current/non-current method 453–455 monetary/non-monetary method 453–455 problem 452 translation gain 453–455 translation gain and losses, accounting for 470–475 current rate method 470–472 on intra-group loans 474–475 problem of 470 on transactions 472–473 www.downloadslide.com Subject index translation problem 445–446 translation of transactions 447–452 accruals principle 449 issues 447–448 prudence principle 448–449 rules and practice 450–452 exceptions to 452 exchange rate 450–451 reporting gain or loss 451 USA in 1970s 455–458 GAAP 463–465 net investment concept 461–462 SFAS on 457–458 SFAS 52 on 462–465 and subsidiary’s financial statements 459–461 temporal method 455–457 foreign direct investment 7–9 share of by country 16 share of GDP 17 Forum of Firms 522 France 41, 565, 566–567 accounting directives 356 accounting rules in 397–401 financial statements, format 397–399, 411–413 making of 374–376 principles, differences from IFRS 399–401 for unlisted companies 384–385, 397–401 accounting system 72, 75, 78 adoption/convergence with IFRS 122 balance sheet format 50 consolidation in 425 convergence with IFRS 136 currency translation 451 deferred tax, reporting on 260 disclosure practices 498 divergence from IFRS 196, 197 enforcement in 547, 548, 550, 555–557 comparisons 550 in Euro zone 446 exports as GDP percentage FDI from 16, 17 financial reporting 341, 342 forms of business enterprises 384–385 gearing ratios 34 goodwill 439 harmonization in 75, 101, 102, 358, 427 in IFAC 19 IFRS policy changes on companies 199 income statements 52 in international organizations 95, 109 investor protection, ownership concentration and earnings management 138 legal system 32 MNEs 9, 17 proportional consolidation 437 publication requirements and practices 440 Seventh Directive, implementation of 429 share ownership 13 taxation, policy 39, 40 French-Spanish-Portuguese sphere of influence and financial reporting 68 functional currency 466–467 G4+1 104 gearing ratios 34 General Agreement on Tariffs and Trade (GATT) General Motors 255, 256, 260, 279 Generally Accepted Accounting Principles (GAAP) 4, 120 convergence of IFRS and 133–134 current 463–465 differences between national rules 338–339 and financial reporting 206 foreign currency translation 450 hedging foreign currency 452 and IFRS, differences 128–132 options including fair value 129–130 principles and rules 128–129 reconciliations between 130–132 political lobbying 272 reconciliations from national rules to 134–135 segment reporting 492 synoptic table of accounting differences 565–567 German-Dutch sphere of influence and financial reporting 68 Germany 7, 565, 566–567 accountancy profession 42–43 accounting directives 356, 358 accounting rules in 401–406 financial statement, format 401–403, 414–416 making of 377–378 principles, differences from IFRS 403–406 for unlisted companies 385–386, 401–406 accounting system 67, 68, 69, 71, 75, 78 adoption/convergence with IFRS 122 auditing in 516 balance sheet format 50 consolidation in 425 goodwill 438 convergence with IFRS 134–135 currency translation 451 depreciation 38 disclosure practices 498 divergence from IFRS 187–188, 190, 193, 195, 197 enforcement in 546, 548, 557–558 comparisons 549, 550 entity concept of group 426 equity markets 33 in Euro zone 446 exports as GDP percentage FDI from 16 finance, providers of 34 financial conservatism 140 financial reporting 341–342 on deferred tax 258 on employee benefits 253 on provisions 250–251 forms of business enterprises 385 gearing ratios 34 harmonization in 75, 101, 427 601 www.downloadslide.com Subject index in IFAC 19 IFRS policy changes on companies 199 income statements 52 in international organizations 95, 109 investment’s analysts’ association (DVFA) 139–140 investor protection, ownership concentration and earnings management 137, 138 legal systems 32 MNEs 9, 17 national rules in 338, 339, 340 non-state pension schemes 257 political lobbying 286 proportional consolidation 437 publication requirements and practices 440 Seventh Directive, implementation of 429 share ownership 12 size limits for SMEs 386 stock exchanges 10, 11 taxation, policy 38, 39 Gesellschaft mit beschränkter Haftung (GmbH) 385 GlaxoSmithKline (GSK) 4–5, 126–127, 195, 242, 435 globalization index stock markets 9–13 godo kaisha 307 going concern IFRS requirements 155 international auditing assumption 542 gomei kaisha (Japan) 307 goodwill and consolidation 434, 438–439 IFRS transitional issues 195 political lobbying in UK 281 in USA 228–229 political lobbying 284–285 goshi kaisha (Japan) 307 Greece accounting directives, implementation of 356 consolidation in 425 in Euro zone 446 gearing ratios 34 investor protection, ownership concentration and earnings management 138 Seventh Directive, implementation of 429, 430 group accounting 423–442 auditing 523–524 definitions 430–433 differences 432 IFRS 430–431 USA 431 ‘group’ concept 425–426 harmonization, 1970s on 427–430 IFRS requirements 167–169 intra-group loans in foreign currency translation 474–475 publication requirements and practices 439–440 US/IFRS differences 432 see also consolidation Group of Latin American Standard Setters (GLASS) 106 602 Handelsgesetzbuch 377, 386, 401 harmonization 1970s onwards 427–430 in China 320–324 accounting context 320–321 accounting regulations of 1992 321–322 audit 324 developments after 1992 322–323 reconciliations, differences revealed in 325–327 definition 90 in Eastern and Central Europe 358–367 communist accounting 360–361 IFRS, applying 366–367 pre-communist era 359–360 transition, problems of 361–363 in European Union 351–358 directives and regulations 353, 357–358 European Company and EEIG 357 Fourth Directive 353–357 reasons for and obstacles to 351–352 research findings 358 and IASC 94–103 direct and indirect effects of 101 standards 95–99 see also International Accounting Standards (IASs); International Financial Reporting Standards (IFRS) success of 99–102 in Japan 305–320 accounting context 305–307 accounting practices 313–318 annual reports 310–312 audit 313 business organizations, forms 307 consolidation and currency translation 317–318 differences revealed in reconciliations 320 private sector, accounting profession and standards 309–310 regulatory framework 306, 307–309 measurement of 93–94 need for 92 obstacles to 92–93 reasons for 91–92 harmony, definition 90 Haut Conseil de Commissariat aux Comptes (H3C) 556 hedge accounting 246–248 hedging 452 Her Majesty’s Revenue and Customs (HMRC), 139 historical rate method in foreign currency translation 446, 447 holding company concept 424–425 Hong Kong MNEs 17 share ownership 13 SMEs in 343, 347 stock exchanges 11 HSBC Holdings 270 Hungary 358, 360, 361, 366 IFRS see International Financial Reporting Standards (IFRS) www.downloadslide.com Subject index IFRS Advisory Council 210 IFRS Foundation 139, 210 IFRS Interpretations Committee (IFRIC) 99, 108–109, 193, 210 IFRS for Small and Medium-sized Entities 110, 380–381, 402, 565, 566–567 IFRS taxonomy 139 impairment of assets, USA 221 income, comprehensive 261–264 income statements formats 51–52 USA 217–218 income tax credit (USA) 273–274 India accounting system 72 consolidation in 425 exports as GDP percentage in IFAC 19 in international organizations 95 stock exchanges 10 individualism as cultural dimension 29 inflation 41–42 accounting, political lobbying up to 1990 (UK) 279–280 post-war 272 ING 287 Institut der Wirtschaftsprüfer 377, 378, 557 Institute of Chartered Accountants in England and Wales (ICAEW), 196, 379 intangible assets IFRS requirements 162–164 Japan 314 recognition of 240–242 USA 222–223 Inter-American Accounting Association (IAA) 106 internal audit 539 international accountancy firms and harmonization 92 International Accounting Standards Board (IASB) 4, 6, 41, 107–112, 164, 209, 211, 341, 547 convergence with FASB 110 and adoption by 133–134 political lobbying 293–294 and EU 125 on foreign currency translation 462 on group accounting 424 and harmonization 91 initial members 109 initial work 110 and Japan 310 legal and political context of 121 on management commentary 169 political lobbying 286–290 financial instruments 288–289 investment in securities 288–289 LIFO, elimination of 286 operating segments 290 share-based payment 287 reforms 107–110 on revenue recognition 238, 240 on segment reporting 486, 489 on translation of comprehensive income 467–469 trustees 108 International Accounting Standards Committee Foundation (IASCF) 94, 292 International Accounting Standards Committee (IASC) China joins 322 and harmonization 94–103 direct and indirect effects of 101 empirical findings 103 standards 95–99 see also International Accounting Standards (IASs); International Financial Reporting Standards (IFRS) success of 99–102 history and purpose 94–95 legal and political context of 121 political lobbying 286–290 on segment reporting 487–488 International Accounting Standards (IASs) IAS (Presentation of financial statements) 96, 153, 171, 174 different practices 191, 192, 194 on revenue recognition 238 IAS (Inventories) 96, 153, 174, 315 different practices 192, 195 IAS (Cash flow statements) 96, 153, 171, 175, 218 different practices 190, 195 IAS (Accounting policies) 96, 153, 171, 175, 191 different practices 194 on revenue recognition 238 IAS 10 (Events after reporting period) 96, 153, 175 IAS 11 (Construction contracts) 96, 153, 175 different practices 194 on revenue recognition 239 IAS 12 (Income taxes) 96, 153, 171, 176, 257 on deferred tax 257, 259 different practices 194, 195 IAS 14 (Segment reporting) 488–492, 499 IAS 16 (Property, plant and equipment) 96, 153, 171, 176, 258 on asset measurement 220, 244 different practices 192, 195 IAS 17 (Leases) 96, 153, 171, 176–177, 222 different practices 194, 195 IAS 18 (Revenue) 96, 153, 177 on revenue recognition 239 IAS 19 (Employee benefits) 96, 153, 171, 177, 254 different practices 190, 192, 195 IAS 20 (Government grants) 96, 153, 177 different practices 192 on revenue recognition 264 IAS 21 (Effects of foreign exchange rate changes) 96, 153, 177–178, 450 different practices 194 on foreign currency reporting 465–468, 470–471, 473, 474 IAS 22 (Business combinations) 178, 436, 438–439 IAS 23 (Borrowing costs) 96, 153, 171, 178, 220 different practices 194 603 www.downloadslide.com Subject index IAS 24 (Related party disclosures) 96, 153, 178 IAS 26 (Reporting by retirement benefit plans) 96, 153, 178 IAS 27 (Separate financial statements) 96, 153, 178, 227 different practices 192 on group accounting 426, 427, 431 IAS 28 (Investments in associates and joint ventures) 96, 153, 178–179, 427, 431 different practices 194 IAS 29 (Financial reporting in hyperinflationary economies) 96, 153, 179 IAS 31 (Interest in joint ventures) 96, 179, 427, 437 different practices 192 IAS 32 (Financial instruments: presentation) 96, 153, 179, 215 on liabilities 246 IAS 33 (Earnings per share) 96, 153, 179, 231 IAS 34 (Interim financial reporting) 96, 153, 179–180 IAS 36 (Impairment of assets) 96, 153, 171, 180, 439 different practices 194, 195 IAS 37 (Provisions, contingent liabilities and contingent assets) 96, 153, 171, 180, 248, 251–252 different practices 194, 195 IAS 38 (Intangible assets) 96, 153, 171, 180 different practices 192, 193, 194, 195 on financial reporting 241, 242 USA 222–223 interpretation of 188 IAS 39 (Financial instruments: recognition and measurement) 96, 125–126, 153, 171, 180–181, 438 on asset measurement 242 on assets 245, 246 different practices 192, 194, 195 on hedge accounting 246–248 on hedging foreign currency 452 IAS 40 (Investment property) 96, 153, 171, 181 on asset measurement 220, 244 different practices 192, 193, 194, 195 IAS 41 (Agriculture) 96, 153, 171, 181, 220 on asset measurement 242 different practices 190, 194, 195 government grants 264 outline of content 174–185 International Audit Practice Notes (IAPNs) 526 international auditing 515–544 audit process 530–542 engagement 536 ethics 532–534 evidence gathering 538–539 materiality 537–538 planning and risk assessment 536–537 quality control 534–535 reporting 539–541 responsibilities 541–542 technical standards 534 auditors’ services 531–532 date of report 542 expectations and information gaps 541–542 going concern assumption 542 internationalization of, reasons for 518–523 604 demand from capital markets 519–520 MNEs 518–519 role of networks 520–523 standard-setters 524–530 European Union 528–529 IFAC 524–526, 528 PCAOB 529 standards 524–530 unqualified opinion 540 International Auditing and Assurance Standards Board (IAASB) 522, 525–526, 539–540, 541 Clarity project 526, 528 International Coordination Committee for the Accountancy Profession (ICCAP) 103 International Ethics Standards Board for Accountants 533 International Federation of Accountants (IFAC) 95, 103–104, 517–518, 522 auditing process 530–542 code of ethics 532–534 quality control 534–535 regional organizations of 528 as standard-setters 524–528 technical standards 534 international financial analysis 136–144 accounting differences see accounting, international differences and capital market 139–143 foreign language and foreign currency 136 IFRS financial statements 143–144 ratio analysis 138–139 reliability of information 137, 138 International Financial Reporting Standards (IFRS) 4, 59 accounting rules in France 397–401 Germany 401–406 UK 407–408 adoption of 121–124 changes in practices 198–199 Chinese companies using 327 classification of financial reporting 80–81 convergence and US GAAP 133–134 convergence with 121–122 current 465–467 differences between national rules 338–340 different versions of practice 187 examples 196–198 implications 199–200 motivations for 187–189 scope for 189–196 covert options 193 gaps in 191 imperfect enforcement 196 measurement estimations 193–195 overt options 191–193 translations of 190–191 in Eastern and Central Europe 366–367 financial statements 143–144 www.downloadslide.com Subject index and ‘group’ concept 430–431 IFRS (First-time adoption of IFRSs) 153, 181–182, 191 IFRS (Share-based payment) 153, 182, 226 different practices 195 IFRS (Business combinations) 153, 182, 228, 242, 427, 434, 436, 438, 439 different practices 194, 195 IFRS (Insurance contracts) 153, 182, 191 IFRS (Non-current assets held for sale and discontinued operations) 153, 171, 182, 431 different practices 194 IFRS (Exploration for and evaluation of mineral resources) 153, 182–183, 191 IFRS (Financial instruments: disclosures) 153, 171, 183, 223, 290 IFRS (operating segments) 126, 153, 171, 183, 486, 489–496 different practices 194 IFRS (Financial instruments) 126, 153, 183, 195, 246 IFRS 10 (Consolidated financial statements) 153, 171, 183–184, 430, 436 different practices 188 IFRS 11 (Joint arrangements) 153, 184, 431, 437 IFRS 12 (Disclosure of interests in other entities) 153, 184 IFRS 13 (Fair value measurement) 153, 184 IFRS 15 (Revenue from contracts with customers) 45, 96, 153, 184–185, 192, 240, 345 IFRS 16 (Leases) 153, 164, 185, 222 legal and political context of 121 liabilities measurement 261 outline of content 181–185 reconciliations from national rules to 134–135 requirements 151–173 assets 162–165 assumptions 155 comparability and consistency 157 completeness 156 disclosures 169–170 economic substance 155–157 elements of financial statements 157–159 group accounting 167–169 liabilities 166–167 objective 154–155 presentation 159–161 relevance 155–156 timeliness 157 understandability 157 verifiability 157 on segment reporting 493 sources of content 170, 171 transitional issues 195 and US GAAP asset measurement 243–244 differences 128–132 in group accounting 432 options 129–130 principles and rules 128–129 reconciliations between 130–132 voluntary adoption of 124, 312–313 international financial system 14–15 International Organization of Securities Commissions (IOSCO) 93, 98, 105, 520, 528, 530 International Power 432 International Standards on Auditing ISA 210 536 ISA 220 535 ISA 260 539–540 ISA 265 540 international trade 7–8 intrinsic classification in financial reporting 63, 71–76, 78–79 clustering 71–74 by degree of standardization 76 model and new data 74–76 Nobes model 74–78 inventories IFRS requirements 162 in Japan 315 in USA 223–225 Investigation and Discipline Board (IDB) 555 investments in Japan 314–315 in securities, IASB on 290 in USA 223 Investor protection laws 137, 138 Ireland accounting directives, implementation of 356 accounting system 70, 75, 78 divergence from IFRS 196 in Euro zone 446 gearing ratios 34 harmonization in 93 in IFAC 19 investor protection, ownership concentration and earnings management 138 legal system 31, 32 Seventh Directive, implementation of 429 share ownership 13 Israel 13 adoption of IFRS 123 Italy accounting directives, implementation of 356 accounting system 70, 75, 78 balance sheet format 50 consolidation in 425 convergence with IFRS 122 currency translation 451 deferred tax, reporting on 261 disclosure practices 498 earnings volatility 142 enforcement in 546, 547–548 entity concept of group 427 equity markets 33 in Euro zone 446 FDI from 17 gearing ratios 34 harmonization in 101, 427 605 www.downloadslide.com Subject index income statements 52 in international organizations 109 investor protection, ownership concentration and earnings management 137, 138 legal system 32 MNEs 8, 17 political lobbying 286 Seventh Directive, implementation of 429, 430 share ownership 13 Jamaica 72 Japan 565, 566–567 accounting practices 313–318 deferred taxation 316 dividends 316 extraordinary items 317 intangible assets 314 inventories 315 investments 314–315 legal reserve 315 pensions 316 receivables 315 tangible assets 313–314 accounting system 70, 75 annual reports Companies Act requirements 310 convenience transactions 312 securities law requirements 310–311 balance sheet format 50 consolidation in 425 convenience translations 139 convergence with IFRS 136 disclosure practices 498 dividends in 316 enforcement in 546, 547, 559 exports as GDP percentage FDI from 16 financial conservatism 141 gearing ratios 34 harmonization with IASC 75, 100–102, 305–320 accounting context 305–307 accounting practices 313–318 accounting profession and standards 309–310 assets 313–315 audit 313 business organizations, forms 307 consolidation and currency translation 317–318 equity and liabilities 315–316 extraordinary items 317 IFRS, differences from 318–320 in reconciliations, differences revealed 320 regulatory framework 269, 307–309 voluntary adoption of IFRS 312–313 in IFAC 19 income statements 52 in international organizations 95, 109 legal system 32 MNEs 9, 16 national rules in 341 political lobbying 286 606 segment reporting 501, 502 share ownership 14 stock exchanges 10, 11 taxation, policy 39 Japan Tobacco Inc 317, 318 Japanese Institute of Certified Public Accountants (JICPA) 306, 309, 311, 313, 315, 316 Jenkins Committee 488 joint arrangements, IFRS requirements 168 JWG 245, 247 kabushiki kaisha (KK, Japan) 307, 308 Keiretsu 305, 317 Kenya 72 KPMG 71, 78, 189, 196, 520, 523 Lafarge 287 last-in-first-out (LIFO) inventory valuation 138 Latvia 358, 446 leases IFRS requirements 164 in USA 221–222 political lobbying 275–276 legal differences affecting accounting 31–32 legal reserve (Japan) 315 legalism and regulation in financial reporting 69 liabilities financial 246 IFRS requirements 166–167 measurement 261 liberalism and regulation in financial reporting 69 LIFO elimination of, IASB on 286 LIFO in USA 224–225 limited liability partnerships (LLPs) 388 Lithuania 358 London Stock Exchange L’Oréal 401, 451 losses, under fair value, political lobbying on (USA) 285–286 Luxembourg 41 accounting directives, implementation of 356 consolidation in 425 in Euro zone 446 Seventh Directive, implementation of 429, 430 stock exchanges 10, 11 Macedonia 358 Malaysia 95, 100 Malta 446 SMEs in 343 marketable securities (USA) political lobbying from 1990 281–282 up to 1990 275 masculinity as cultural dimension 29–30 matching, IFRS requirements 158 materiality in audit process 537–538 Mexico 13 accounting system 72 disclosure practices 498 exports as GDP percentage in international organizations 95 stock exchanges 11 www.downloadslide.com Subject index microeconomic approach to financial reporting (Mueller) 66 Moldova 358 morphologies of classification in financial reporting 67 multinational enterprises (MNEs) 15–18 auditing, demand from 518–519 country share of 17 and harmonization 92 national rules differences between IFRS or US GAAP 338–340 survival of 340–342 national standard-setters 104–105 nationalism 93 Nestlé 287 net investment concept in foreign currency translation 461–462 Netherlands 42 accounting directives, implementation of 356 accounting system 66, 71, 72, 75 disclosure practices 498 enforcement in 548 in Euro zone 446 exports as GDP percentage FDI from 16 finance, providers of 33 financial reporting 341 on deferred tax 260 harmonization in 75, 427 in IFAC 19 in international organizations 95, 102, 109 investor protection, ownership concentration and earnings management 138 legal system 32 MNEs 17 non-state pension schemes 257 Seventh Directive, implementation of 429 taxation policy 39 neutrality, IFRS requirements 156 New York Stock Exchange 11, 12 foreign listings 11–12 New Zealand accounting system 72, 75 gearing ratios 34 in IFAC 19 legal system 32 SMEs in 343 Nigeria 100 Nokia 12, 287 non-controlling interests 434, 436 Norsk Hydro 11, 132 Norwalk Agreement 133, 211 Norway accounting directives, implementation of 356 enforcement in 546, 547 FDI from 17 financial reporting, deferred tax 260 gearing ratios 34 MNEs 17 non-state pension schemes 257 Seventh Directive, implementation of 429 share ownership 13 Océ 287 OKPMG data 78–79 operating segments, IASB on 290 optimism as accounting value 30 Ordre des Experts Comptables (OEC) 375, 376, 398 Organisation for Economic Co-operation and Development (OECD) 107, 138, 363, 364 other comprehensive income (OCI) 158, 160 Pakistan 70, 72 Panama 72 Paraguay 72 parent company concept 426, 428, 431 pensions 252–256 accounting for 254 funding 255–256 in Japan 316 non-state schemes, classification of 257 Peru 72, 347 petroleum exploration, political lobbying on (USA) 275, 277–278 Philippines 70, 72 Philips 131, 287 Pirelli 287 plan comptable général (France) 373, 374, 375 and accounting rules 397–401 Poland 34, 190, 352, 355–356, 358, 360, 363–365 political lobbying 267–298 from 1990: USA 281–286 of IASC/IASB 286–290 motivations for 269–271 up to 1990 UK 279–281 USA 271–279 pooling of interests method of consolidation 435–436 Portugal accounting directives, implementation of 356 enforcement in 546, 547 in Euro zone 446 investor protection, ownership concentration and earnings management 138 legal system 32 Seventh Directive, implementation of 429, 430 share ownership 13 power distance as cultural dimension 29 presentation, IFRS requirements 159–161 presentation currency 466 PriceWaterhouseCoopers 20, 172, 191 international auditing 520, 539 Private Company Financial Reporting Committee (USA) 206, 343 private entities, use of term 338 privatization 14 Professional Oversight Board (POB)555 professionalism as accounting value 30 property, plant and equipment (PPE), 220–221 proportional consolidation 434, 437 607 www.downloadslide.com Subject index Provisional Statement of Standard Accounting Practice (PSSAP) 280 provisions 248–252 accounting differences in 47–49 and contingent liabilities 251–252 IFRS requirements 166 and reserves 250–251 prudence in foreign currency translation 448–449 IFRS requirements 156–157 public companies, financial reporting by 74 Public Company Accounting Oversight Board (PCAOB) 207–208, 230, 285, 529, 548 Public Interest Oversight Board (PIOB) 525–526, 530 Publish What You Pay (PWYP) Campaign 493 Publizitätsgesetz 386 purchase accounting method of consolidation 434 purchasing power parity index (PPPI) 479–480 quality control in audit process 534–535 Quoted Companies Alliance (QCA) 493 receivables (Japan) 315 regulation of financial reporting 69 regulatory framework of financial reporting (USA) 205–208 Congress 208 laws 205–206 SEC 206–208 regulatory style, classification in financial reporting 68–69 regulatory variables 69, 70 relevance, IFRS requirements 155 Repsol YPF 287 research, compared with development 241 research and development, political lobbying in UK 281 reserves accounting differences in 47–49 and provisions 250–251 return on equity 139 return on net assets 225, 251 revenue 161 and foreign currency transactions 161–162 recognition of 238–240 Revenue Act (1971, USA) 208 Rhodesia 72 Romania 352, 358, 362 Royal Dutch Shell 8–9 Russia 17 transition in 358, 361–362, 365–367 Saint-Gobain 287 Sandilands Committee 280 Sarbanes-Oxley Act 10, 12, 207, 208, 228, 230, 529, 551 Saudi Arabia, MNEs 17 secrecy as accounting value 30 Securities Act (1933, USA) 205, 308 Securities Exchange Acts (USA) 41, 205, 308 Securities and Exchange Commission (SEC) 134, 206–208, 308, 378, 487, 547 enforcement by 550–551 and national rules 340–342 608 and political lobbying 272, 273–274, 277–278, 282–283, 293 regulatory framework of financial reporting 206–208 on segment reporting 487 Securities Law (Japan) 308–309, 310 segment reporting benefits 496–508 assessing 500–508 constraints on 496–500 researchers’ forecasts 500, 502–505 stock market reactions 500, 505–508 user decision making 500, 501–502 definitions 483–486 political lobbying (USA) 276 regulations 486–500 historical context 486–489 IFRS 486 proposals for 492–496 requirements of 489–492 Serbia 358 share ownership, patterns of 13–14 share-based payment, IASB on 287 Singapore accounting system 72 in international organizations 100 share ownership 13 SMEs 347 stock exchanges 10, 11 Slovakia 352, 358, 446 Slovenia 352, 358, 446 small and medium enterprises (SMEs) accounting rules for 372–395 France 374–376, 384–385, 397–401 Germany 377–378, 385–386, 401–406 UK 378–383, 386–388, 407–408 size limits (UK) 387 special rules for 343–347 case for 343–344 IFRS for 344–347 SME Implementation Group (SMEIG) 346 social sciences, classification in 60–62 société responsabilité limitée 384 société anonyme 384 Société Générale 556 Solomons Report 209 South Africa 72, 102 adoption of IFRS 122 enforcement in 546 in international organizations 95, 109 SMEs in 344, 347 South Korea 10, 17, 122, 286 Spain 41 accounting directives, implementation of 356 accounting system 72, 75 balance sheet format 50 consolidation in 425 currency translation 451 disclosure practices 498 divergence from IFRS 196 www.downloadslide.com Subject index enforcement in 546, 547 in Euro zone 446 exports as GDP percentage financial reporting 341 gearing ratios 34 IFRS policy changes on companies 199 income statements 52 investor protection, ownership concentration and earnings management 138 legal system 32 MNEs 17 proportional consolidation 437 Seventh Directive, implementation of 429, 430 special purpose vehicles 227, 431 spheres of influence, classification in financial reporting 67–68 standardization, use of term 90 statement of total recognized gains and losses 216, 261 Statements of Financial Accounting Standards (SFAS) 210 SFAS 222 SFAS 14 487, 488, 491, 496, 498, 499, 500, 504, 506, 507 SFAS 19 277, 278 SFAS 52 450, 463 SFAS 87 254 SFAS 95 218 SFAS 106 278–279 SFAS 109 227 SFAS 115 244, 282 SFAS 121 221 SFAS 123 226, 283, 287, 291, 293 SFAS 130 217 SFAS 131 486, 488, 489, 492, 494, 497–500, 504–507 SFAS 133 244, 285 SFAS 141 242, 434, 436 SFAS 142 223, 229, 285, 438 SFAS 144 171, 221 SFAS 146 249 SFAS 150 215 SFAS 157 223, 243 SFAS 158 226, 254 SFAS 159 245 SFAS 162 211–212 Statements of Standard Accounting Practice (SSAP) 379 SSAP 354 SSAP 225, 382 SSAP 11 280 SSAP 12 382 SSAP 13 281 SSAP 15 227 SSAP 19 383 SSAP 22 229, 281 SSAP 23 436 statutory control as accounting value 30 stock exchanges 9–13 foreign listings 11 Stock Option Accounting Reform Act (USA) 293 subsidiary concept of 427, 430 and foreign currency translation 459–461 Sweden accounting directives, implementation of 356 accounting system 67, 69, 72, 75 deferred tax, reporting on 259 enforcement in 546, 547 FDI from 17 financial reporting 341 gearing ratios 34 investor protection, ownership concentration and earnings management 138 non-state pension schemes 257 Seventh Directive, implementation of 429 share ownership 13 Switzerland accounting system 72 convergence with IFRS 123 enforcement in 547 FDI from 17 gearing ratios 34 harmonization in 101 in international organizations 109 MNEs 17 non-state pension schemes 257 Seventh Directive, implementation of 430 share ownership 13 synoptic table 565, 566–567 Taiwan 11, 17 tangible assets IFRS requirements 162–163 in Japan 313–314 taxation accounting differences in 37–40 deferred 256–261 assets 260 IFRS requirements 167 international differences 260–261 and harmonization 92 and national rules 342 see also corporate taxation in USA Technical Expert Group 288–289 temporal method in foreign currency translation of comprehensive income 469–470 in USA (1970s) 455–457 timeliness, IFRS requirements 157 Total (France) 8, translation compared with conversion 444 of comprehensive income 467–470 current rate method 467–469 temporal method 469–470 of financial statements 447, 452–455 CNC method 453–455 current rate method 453–455 MNM method 453–455 problem 452 translation gain 453–455 terminology 444–445 of transactions 447–452 accruals principle 448, 449 609 www.downloadslide.com Subject index issues 447–448 prudence principle 448–449 rules and practice 450–452 exceptions to 452 exchange rate 450–451 reporting gain or loss 451 transparency as accounting value 30 Trinidad and Tobago 72 true and fair view 41, 382 Trueblood Committee 209, 213 Turkey 425, 478 UBS 287 Ukraine 358 uncertainty avoidance as cultural dimension 29 understandability, IFRS requirements 157 uniform accounting (Mueller) 66 uniformity as accounting value 30 United Kingdom 565, 566–567 accountancy profession 42–43 accounting directives, implementation of 356 accounting rules in 407–408 financial statement, format 407, 417–420 making of 378–383 principles, differences from IFRS 407–408 for unlisted companies 386–388 accounting system 66, 68, 69, 72, 75, 78, 81 balance sheet format 50 consolidation in 425 pooling of interests 436 currency translation 450–451 depreciation 38 disclosure practices 498, 505 divergence from IFRS 196 enforcement in 546, 547, 549, 550, 553–555 comparisons 550 equity markets 33 exports as GDP percentage FDI from 16 finance, providers of 34 financial reporting 341 on comprehensive income 261–264 on deferred tax 258, 261 on employee benefits 254–256 influence in 67–68 on segment reporting 495 forms of business enterprises 386–388 gearing ratios 34 harmonization in 75, 358 in IFAC 19 IFRS policy changes on companies 199 income statements 52 in international organizations 102, 109 investor protection, ownership concentration and earnings management 138 legal system 31, 32 MNEs 9, 17 political lobbying, to 1990 279–281 deferred tax 280 goodwill 281 610 inflation accounting 279–280 research and development 281 proportional consolidation 437 publication requirements and practices 434 segment reporting 501, 502, 503 Seventh Directive, implementation of 429 share ownership 13 SMEs 344, 386–387 size limits 386 stock exchanges 10, 11 taxation, policy 37–40 XBRL 139 United Nations 107 United States 565, 566–567 accountancy profession 42 accounting system 66, 68, 69, 72, 75, 78 auditing in 516 auditing standard-setter (PCAOB) 529 balance sheet format 50 business combinations in 228 IFRS requirements 167 political lobbying from 1990 283–285 up to 1990 274–275 consolidation in 227–229, 424 business combinations 228 goodwill 228–229 and parent company concept 440 scope 227–228 convergence with IFRS 136 depreciation 220 disclosure practices 498 enforcement in 546, 547, 549, 550–551 comparisons 550 equity markets 33 equity method 439 exports as GDP percentage FDI from 15, 16 finance, providers of 34 financial conservatism 141 financial reporting 203–235, 351 accounting principles 220–227 corporate taxes 226–227 employee benefits 225–226 intangible assets 222–223 inventories 223–225 investments 223 leases 221–222 PPE 220–227 accounting standard-setting 209–212 enforcement 211–212 by FASB 209–211 GAAP codification 210 influential parties 211 by profession 209 annual reports 215–220 balance sheets 215, 216 cash flow statements 218 comprehensive income statements 215, 216–217 www.downloadslide.com Subject index technical terms 218–220 audit 229–230 comprehensive income 262–263 conceptual framework 212–215 consolidation 227–229 business combinations 228 goodwill 228–229 scope 227–228 deferred tax 257, 260 differences from IFRS 230–232 elements of statements 214–215 employee benefits 255–256 provisions 250, 251 regulatory framework 205–208 Congress 208 laws 205–206 SEC 206–208 revenue recognition 239 foreign currency translation in 455–458 net investment concept 461–462 SFAS on 457–458 SFAS 52 on 463–465, 471 and subsidiary’s financial statements 459–461 temporal method 455–457 and current rate method 458–462 gearing ratios 34 harmonization in 75 in IFAC 19 impairment of assets 221 income statements 52, 215, 216, 218 in international organizations 95, 102, 109 investor protection, ownership concentration and earnings management 138 legal system 31, 32 MNEs 9, 17 parent company concept 431 political lobbying accounting standard-setter, control of 291 from 1990 281–286 business combinations 283–285 employee stock options 282–283 goodwill 284–285 losses under fair value 285–286 marketable securities 281–282 up to 1990 271–279 business combinations 274–275 debt restructuring 276–277 investment tax credit 273–274 leases 275–276 marketable securities 275–276 petroleum exploration 275–276, 277–278 post-war inflation 272 segment reporting 276 publication requirements and practices 440 segment reporting 491, 501, 502, 503 share ownership 13 sphere of influence and financial reporting 67–68 stock exchanges 10 taxation, policy 38, 39 XBRL 139 United States Steel Company 424 Urgent Issues Task Force 380 Uruguay 72, 73 US GAAP see generally accepted accounting principles (GAAP) Venezuela 70, 72, 123 verifiability 157 Vodafone 8, 9, 134 Volkswagen 46–47, 193, 195, 241, 251 voluntary adoption of IFRS 124 voluntary disclosure practices 139 Volvo 11 Western Europe and harmonization 100–102 Wheat Committee 209 Wirtschaftsprüferkammer 378, 548, 558 Wirtschaftsprüferordnung 378 Wm.H Müller & Co 425 world standard-setters 105 World Trade Organization WorldCom 110, 207 XBRL (extensible business reporting language) 139 yugen kaisha (YK, Japan) 307 Zaibatsu 305 611 ... Cataloging-in-Publication Data Names: Nobes, Christopher, editor | Parker, R H (Robert Henry), editor Title: Comparative international accounting / Christopher Nobes and Robert Parker Description: 13th edition | Harlow,... of key terms www.downloadslide.com www.downloadslide.com 13th Edition COMPARATIVE INTERNATIONAL ACCOUNTING Christopher Nobes and Robert Parker www.downloadslide.com Pearson Education Limited Edinburgh...www.downloadslide.com COMPARATIVE INTERNATIONAL ACCOUNTING Visit the Comparative International Accounting, Thirteenth Edition Companion Website at www.pearsoned.co.uk /nobes to find valuable