International Accounting - Research Paper Example

? Business Topic: International Accounting Memo of Transmittal Transmittal for Business Report on “International Accounting” In response to your request I have analyzed the aspects of International. This reports briefs about the concept, usefulness, and implications of International Accounting. This report is containing all the research of International Accounting Standards, UK GAAP and European rules and regulations about Accounting. *Include more Lines according to your requirements* Feel free to contact if you want to discuss the report or need additional information. Contents Purpose of International Accounting Key concept of International Accounting The Framework Current Development in International Accounting Corporate Reporting Global Differences Name: Instructor’s name: Course: Date: International Accounting International accounting is regulated by International accounting framework. The purpose of the framework is to Assist in the development of future accounting standards and in the review of existing standards. Provide a basis for future reducing the number of alternative accounting treatments permitted by international standards. Assist national standard setters in developing national standards. Assist prepares of financial statements in applying international standards and in dealing with issues not covered by international standards. Assist auditors in forming an opinion whether financial statements conform to international standards. Provide information about international accounting standard board's approach to setting international standards. The report is based on these concepts and these are described below through a diagram. Key concept International al accounting refers directly to presentation of the business. And the business is presents form its financial statements. The objective of financial statements is to provide useful information to users. It is necessary for financial statements of any business to comply with international standards and should meet the common needs of most users. The main purpose International accounting standards is to fair presentations of business statements. Financial statements are frequently described as giving a true and fair view of, or presenting, the position and performance of an entity. The framework does not define these ideas, but compliance with international standards and the framework will help to achieve these ideas. Assessment of International Accounting The International accounting framework provides a conceptual underpinning for International financial reporting standards. One of the objectives of the framework is to provide a basis for the formulation of international financial reporting standards. The another advantage of international accounting is that the framework forms a basis for dealing with any accounting issues that arises which are not covered by accounting framework. The framework’s approach builds to corporate reporting around the definitions of assets and liabilities and the criteria for recognizing and measuring them in a statement of financial position. This approach views accounting form the perspective of the statement of financial position whereas most of companies would not consider the measurement and recognition of assets and liabilities as the starting point for the determination of profit. In many jurisdictions, the financial statements form the basis of dividend payments, the starring point of the assessment of taxation, and often the basis for executive remuneration. A balance sheet fair value system, which International accounting standard board seems to favor, would have a major impact on the above elements. Current Development This is a long term joint project between International accounting standards and the US FASB, which was first agreed in 2004. The end point of the eight stage project will be approval of single, self-contained document which will create a foundation for the development of future accounting standard that are principal based, internally consistent and internationally converged. Ultimately, it will replace the framework for the presentation and presentation of financial statement of business which was first published in 1989. As this project progresses and individual chapters are approved, the new conceptual framework for financial reporting 2010 will be updated and the superseded provisions of the original framework document , currently included as chapter 4, will be deleted (P2-Financial reporting page 303). In September 2010, the IASB and FASB approved the following chapters of the updated conceptual framework. Chapter 1: The objective of general purpose financial reporting Chapter 3: Qualitative characteristics of useful financial information. There is no significant change to underlying purpose and objectives of the framework as established in 1989 document. However there are changes in chapter 3 of 2010 document dealing with the qualitative characteristics of useful financial information. There are two fundamental information qualitative characteristics of relevance and faithful representation, and each is considered in turn: Relevance: Relevant financial information is regarded as information which is capable of making difference in decisions made by users of that information Faithful representation: For financial information to be faithfully presented, it must be complete, natural and free from errors. In addition to the two fundamental qualitative characteristics, there are four enhancing characteristics with enhance the usefulness of information. These are described as Comparability Verifiability Timeliness Understandability There are also other developments present about the recognition, measurement, and fair representation on business in International accounting. Corporate reporting Corporate reporting is another essential element of international accounting. Corporate accounting aim to provide information about the resources and performance of the reporting entity to users of such reports. Traditional corporate reports include historical financial information regarding the operating and financial performance of the business. In recent years non-financial information has become more prevalent, more and more users of financial statements require information of the entities polices towards the environment, employees and society. International accounting does not require these non-financial reports, but many companies produce them voluntarily. Usefulness of corporate reporting Financial reports will always need to be produced to satisfy statutory requirements, such as filing accounts or for the presentation of tax returns. As the harmonization of accounting standards takes place on a global scale, corporate reports become more comparable. This is useful for the investors who should be able to compare financial information from different business that are located in different countries. Complacence with accounting standards In International accounting, the purpose of corporate reporting is to compliance with accounting standards. Despite the number of accounting standards in issue and the requirement for accounts to present a true and fair view, there are still number of companies that fail to comply with requirements of the standards. The financial reporting review panel in UK has the aim of ensuring that both public and private companies comply with the companies Act and accounting standards. It has expanded its role to assess financial statements prepared under international accounting standards in the UK. Global Difference of International Accounting There are key differences between UK Standards and IFRS. Some of key differences are The presentation of single company and group accounts in UK is governed by Companies Act 2006. but for companies or groups listed on stock exchange within European Union, they are obliged to prepare annual financial statements in accordance with International accounting standards. There are also some differences in terminology between two frameworks as summarized below: UK IFRS Balance Sheet Statement of financial position Profit and loss account Income Statement Reserves Equity Statements of other recognized gains and losses Other comprehensive income Debtors Receivables Creditors Payables Corporation tax Income tax Turnover Revenue Minority interest Non-controlling interest Refrences: Roberts, Clare B, Frederick D. S. Choi, and Christopher Nobes. International Accounting. Frenchs Forest, NSW: Pearson Education Australia, 2006. Print. Doupnik, Timothy S, and M H. B. Perera. International Accounting. Boston, Mass: McGraw-Hill, 2007. Print. Nandakumar, A K. Understanding Ifrs Fundamentals: International Financial Reporting Standards. Hoboken, N.J: Wiley, 2010. Print. Bragg, Steven M. Ifrs Made Easy. Hoboken, N.J: Wiley, 2011. Print. Bpp, Learning M. Acca - P2 Corporate Reporting: Study Text. S.l.: Bpp Learning Media, 2007. Print. Media, BPP L. Acca Paper F7 - Financial Reporting (uk and Int) Study Text. London: BPP Learning Media, 2010. Internet resource. Paper F7: Financial Reporting (fr) : Complete Text. Wokingham: Kaplan publishing foulks lynch, 2007. Print. Read More