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Intermediate Accounting Chapter 3 Study Guide

1340 Words6 Pages

Christopher Biedka
Chapter 3 – Exercises and Problems 1, 2, 4, 5, and 9

1.
In the preceding quote, a statement is made that accounting standards that are being developed by the IASB are not paying enough attention to the concerns and practices of European companies. The largest concern for European companies is that IFRS is heavily influenced by the Anglo-Saxon style of accounting and Europe is concerned that the IASB is going to require every country in the world to adhere to this style. Since the IASB’s conceptual framework is heavily based off of the FASB’s framework, IFRS will appear to impose the US model on every other country. Additionally, all Anglo-Saxon countries have common law tradition, in comparison with the code law traditions …show more content…

There are several reasons for the EU to require the use of IFRS for publically traded companies’ consolidated financial statements. Their primary goal was to make financial statements more comparable and transparent, which would aid in developing a singular, high-functioning capital market in Europe where assets and liabilities could be more easily traded.

B. One of the biggest obstacles towards achieving the goal stated above is that switching from local GAAP to IFRS would require massive changes to accounting policies. Most countries in the EU have code law legislation designed for either taxation or for government reporting, and IFRS relies on professional judgment much more than explicit rules. These policy changes can potentially produce drastically different figures than local GAAP would, and without clear explanations of the differences, investors may not have the level of confidence they need to continue …show more content…

A. 1. Asia – Thailand, currently 1 company listed on NYSE – Fabrinet, FN 2. Africa – South Africa, currently 6 companies listed on NYSE AngloGold Ashanti Limited – AU DRDGOLD Limited – DRD Gold Fields Limited – GFI Harmony Gold Mining Company Limited – HMY Sappi Limited – SPP Sasol Limited – SSL 3. Latin America – Philippines, currently 1 company listed on NYSE Philippine Long Distance Telephone Company – PHI

B. Thailand – Thailand has not yet adopted IFRS as of 11/29/2013, but has made a public commitment that the country will begin moving towards IFRS. Currently the Federation of Accounting Profession is the standard-setting body in the country, and they use Thai Accounting Standards (which are heavily converged with IFRS). The reason why Thailand has not completely adopted IFRS already is because the standards have not yet been translated into the Thai language, in addition to concerns of fair valuation procedures, shaken confidence in the IFRS by crises in the US and EU, and unwillingness to adopt IFRS due to small company

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