Finanical Accounting

1. Briefly discuss why global accounting standards are needed in today’s business environment.

Global accounting standards are needed to reduce cross-country differences in accounting standards, primarily in countries outside of North America.

2. What are IFR Standards? Who uses these accounting standards?

IFS are a set of global accounting standards set by an international standards-setting body. It applies to companies that issues publicly trades debt or equity securities called public companies, in countries that have applied IFRS as their accounting standards.

3. What body is responsible for setting IFR Standards?

International Accounting Standards Board, IASB.

4. Briefly discuss the differences between (a) convergence of US GAAP with IFRS and (b) adoption of IFRS by the US securities and Exchange Commission?

The US SEC has eliminated the requirement for foreign registrants that use IFRS to reconcile their financial statements to US GAAP. 2008, SEC issued a proposed roadmap to adoption of IFRS. 2011 was the target date for SEC’s tentative decision regarding IFRS adoption. 2015, Earliest date the SEC would require IFRS for U.S. public companies.

5. Briefly discuss the difference between (a) a “rules based” approach to accounting standard setting and (b) “principals-based” approach to accounting standard setting

Rules based approach (1) detailed guidance on reporting and accounting treatment of business events (2) Strict internal controls requirements and disclosures (Sarbanes-Oxley) (3) Conservatism and cost basis accounting

Principles based approach (1) broad guidance on reporting and accounting treatment of business events (2) Less stringent internal controls requirements (3) Fair value accounting permitted

6. How is property, plant, and equipment measured on the balance sheet under IFRS. How does this differ from the way property, plant, and equipment is measured on the balance sheet under US GAAP

( IFRS) May be select...