Advanced Financial Reporting and Regulation - Term Paper Example

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The paper "Advanced Financial Reporting and Regulation" compares two modes of financial disclosure and finds out that US GAAP is stricter in its financial reporting while IAS 16 allows more leverage to companies with its permission to recognize gains and losses on revaluations. …
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Advanced Financial Reporting and Regulation
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Download file to see previous pages The role of the International Accounting Standards Board is not only to develop these standards but also to promote its global application by facilitating its usage. To promote trust and reliability in IASB it has been structured as a privately-funded organization. This has also enabled its recognition as a global body rather than a local one. Based in London, IASB has two main bodies i.e. Trustees and the IASB, as well as a Standards Advisory Council and the International Financial Reporting Interpretations Committee. IAS 16
IAS 16 was officially conceived on August 1980 through exposure Draft E. The implementation, however, came almost two years late in 1982. In May 1992 changes were recommended to IAS 16 through Exposure Draft E43. The changes were finalized in December 1993 under ‘Comparability for Financial Statements’ project of IASC. These changes were officially implemented in January of 1995. More changes were brought about in IAS 16 by IAS 36 (Impairment of Assets). These changes were implemented worldwide in 1999. In 2007 changes were made to IAS 16 regarding sales of rental property and plant. These were later implemented internationally in January of 2009. Objective
The primary objective of IAS 16 is to prescribe a treatment for property plant and equipment when it comes to financial reporting in public limited corporations. The IAS allows users of these financial statements to understand investments made by a corporation in its property plant and equipment. This enables users to understand any changes in these values over time and compare this data with benchmarks. Three areas are closely monitored when it comes to PPE i.e. actual cost, depreciation and impairments. Underlying Rationale
The underlying rationale for IAS 16 is that property plant and equipment are a major part of doing business especially for business which is capital expenditure intensive. The pricing of these elements can therefore totally change the financial outlook for a company.  ...Download file to see next pagesRead More
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