...per cent greatly outstripping the growth in Australian content at 59 per cent (ACMA, 2010). One of the flagship policies of the government, headed by Julia Gillard after they came to power in 2010, was to establish a National Broadband Network (NBN), to deliver high-speed broadband services to 93% of Australian homes by 2017 (T.Flew, 2013). Some of the key moments in the history of Australian...
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...decades various United States (US) Securities and Exchange Commission (SEC) Chairs and Chief Accountants have expressed support for the development of one set of globally accepted accounting standards. Since the formation of the International Accounting Standards Board (IASB) in 2001, SEC leaders have repeatedly indicated that the logical choice for globally accepted standards is the International Financial Reporting Standards (IFRS) issued by the IASB. However, in line with other large economies, such as Japan, India and China, as of June 2012 the US had not adopted IFRS.1 This paper explores when and how, and indeed if, IFRS will become the basis for the financial reporting of domestic SEC registrants in the US. Readers are encouraged to first review Erchinger’s (2012) history of the SEC’s consideration of IFRS in the US included in this forum and especially Table 1 of this article, which provides a chronology of SEC releases regarding incorporation of IFRS into the US financial reporting model. This paper complements Erchinger’s by assessing approaches recently explored by the SEC for incorporating IFRS into the US financial reporting model. A decision can lead to correct or incorrect action. However, as articulated by many SEC constituents, uncertainty associated with repeated delays and hence ‘no decision’ by the SEC is clearly not in the best interest of investors and other financial statement users, registrants, auditors and students. Furthermore, as it considers various models for...
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...It is defined particularly for Australian local media content providers (largest) who have over 500,000 Australian users per month, and $50m per annum of revenues from Australian-source for supplying the professional TV like content to the market (Anon., 2012). The plan is that in this manner the local content would be protected in a number of ways. But why isn’t these principles needed to be extended to global media companies like Telstra, Google, Apple, HBO as well. They also contribute to providing majority of the professional content to people. Is it because these companies cannot be regulated under the Australian jurisdictional law? It is an issue which the government hasn’t well thought out either. It would be ideal to recognize whether the classifications given to media content by online “stores” such as Apple iTunes or the Google Android platform or the content broadcasted by the youtube, are subject to approval of the standards applied by the Australian regulator (Flew,...
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...it is most difficult issues that standard setters and accountants must deal with regularly because the accounting standards and rules are changing all the time for improving the quality of accounting, which also explains why there are so many changes over these two decades on Australian Accounting policy. This report will focus on some accounting policies regarding to recognition of revenue from the contracts with customers, its history before the adoption of international financial reporting standards (IFRS). Also, current standards and the convergence between IFRS and US GAAP in future will be discussed. There are some drawbacks and ambiguity on the earlier accounting standard to recognize revenue, therefore it is understood that the international accounting standard board (IASB) and Financial Accounting Standard Board (FASB) are currently working on the policy relating to the recognizing revenue from the contracts with customers. They have decided that the ultimate goal of the convergence is a single set of high-quality, international accounting standards that both domestic and international companies can use. Once the convergence is bringing U.S. GAAP and IFRS closer together in a few years, Australian entities may be influenced by the new proposals. It would be a challenging task for companies because it is difference from the two current accounting standards for recognizing revenue. There will be five steps that should be followed on order to recognize revenue under the...
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...Highlights of IFRS Research By CYNTHIA BOLT-LEE, CPA and L. MURPHY SMITH, CPA, DBA NOVEMBER 2009 Conversion from U.S. GAAP to IFRS is a heavily discussed topic in the corporate world. Expected benefits of adoption include reporting consistency, enhanced global competition and improved financial reporting transparency. While many countries worldwide have already adopted IFRS, many other countries are closely examining its effects before adoption, not only from an economic perspective but also from a reporting quality position. COMPARING RESULTS Researchers Elaine Henry, Stephen Lin and Ya-Wen Yang evaluated the difference between financial results under U.S. GAAP compared to IFRS. Their results show that convergence between U.S. GAAP and IFRS is occurring. Using 2004 to 2006 reconciliation disclosures, the authors found that the calculated difference between shareholders’ equity under U.S. GAAP and under IFRS declined from 2004 to 2006. In addition, the difference between U.S. GAAP and IFRS reported net income during this period also declined but remained significantly different. Pensions and goodwill appeared to be the dominant reconciliation items. Reconciliation amounts varied by industry and country, raising questions about consistency between region and industry. Additionally, more than 70% of the companies examined in 2004 through 2006 had a higher return on equity under IFRS compared to U.S. GAAP. The 2007 SEC elimination of the IFRS-to-U.S. GAAP reconciliation...
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...Executive Summary The purpose of this report is to outline the history, current requirements and potential issues regarding the presentation of Other Comprehensive Income (OCI) for Australian reporting entities. Historically, there has been a long standing debate on what items should be included in income, operating income (dirty surplus) or an all-inclusive income (clean surplus). Dirty surplus accounting excludes all items not related to the current operations of the firm and is generally based upon by past firm transactions. The all-inclusive method recognises both operating income as well as revaluation increments (gains and losses) of net assets as part of income (clean surplus) (Hodgson, 2014). The all-inclusive income method was adopted by the Financial Accounting Standards Board (FASB) in 1997 and subsequently the International Accounting Standards Board (IASB), leading to ‘comprehensive income’ reporting. Comprehensive Income (CI) is the sum of Profit or Loss (P&L) and OCI. OCI comprises of items of income and expense not recognised in profit or loss as required or permitted by AASB (AASB, 2014) Recent Amendments permit P&L and OCI to be presented in as a single statement or in separate statements with the P&L section first. In the past, the FASB permitted a third alternative to recognize OCI in statement of equity (FASB, 1997), (AASB, 2011). Items within OCI also need to be grouped together, on the basis of whether they will eventually be ‘recycled’ to the profit...
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...criteria of Australia’s basis for group consolidation, namely, “effective control” which is determined by control over the entity's board and the proportion of potential and current voting rights. The observations call for the principle-based accounting system instead of the insufficient and easily manipulated rules-based system. In sum, the abovementioned suggests that the financial reporting standard-setting process is largely uncertain and that the accounting standards may often be incomplete. More importantly, comparisons are made between the IFRS and Australia’s modified versions of IFRS and the results highlighted that Australia’s modified standards may sometimes be of superior quality and are more contextually relevant for Australian financial report users than the IFRS. Hence, from the above considerations, it is recommended...
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...A commonly proposed issue today is the power and influence the media has in contemporary Australian politics. Arguments for, suggest that the concentration of media outlets is too great, with too few parties having a controlling interest in the industry. Consequently, leading to a misrepresentation of political parties in accordance with the interests of the media owners. Others however, argue that the transition away from traditional methods of media promote a greater level of diversification in the industry, deeming the concentration of media irrelevant. Valid arguments stand for both positions on the issue, unfortunately it is difficult to depict a clear favourable position, this is due to complications in drawing a correlation between media publications and political...
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...capital markets and investment, eliminating barriers to cross border investing. The major benefits include the potential for lesser information asymmetry (Horton, Serafeim and Serafeim, 2012), improved reporting transparency, reduced information costs, increased comparability, accountability and increase in the quality of financial reporting (Ahmed, Neel and Wang, 2013). Therefore markets become more completive and efficient, benefiting investors. A major prospective benefit of implementation of IFRS for financial reporting is the increase in accounting comparability. The enhanced comparability is brought together though increased quality and convergence of accounting standards particularly in areas such as Fair value measurements, business combinations and revenue recognition (Jordan, 2013). The increased comparability hence allows Australian business to facilitate lower costs of capital and have better access foreign capital markets and cross-border investing. On the contrary however comparability may become worse in situations where IFRS implementation is not mandatory and countries have two varying accounting standards. Furthermore the full scope of comparability is yet to be seen as the implementation of IFRS is only been in recent. The full benefits of increased comparability is expected to be seen in the medium-long term and proportionality to the number of firms who adopted it (Williams et al., 2015). Moreover Tarca, n.d, argues that IFRS implementation increases cross-border...
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...is critical analysis the determinants and consequences of management approach to segment reporting. Entities are typically involved in different activities and operate across dispersed locations. The current accounting standard AASB 8, adopts a management approach to segment reporting. Operating Segments is primarily a disclosure standard and is particularly relevant for large organisations that operate in different geographic locations and in diverse business. Paragraph 1 of AASB 8 sets out the core principle: “An entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.” (Australian Accounting Standards Board 2010) 1. Differences between AASB 8 and the old accounting standards on segment reporting AASB 8 ‘Operating Segments’ was required to be adhered to for the reporting period starting on or after 1 January 2009. This standard is typically shown as a management approach to segment reporting, replacing the old accounting standard AASB 114 which was more of an industry standard (Harmer, 2007). The source of the statistics used in compliance with AASB 8 are gathered for the purpose for internal management decisions, hence the reason why it is viewed as a management approach. The old approach differs in a sense that it was purely gathered for reporting and compliance purposes (Parker, 2009). There are a few key...
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...Accountants in Australia (ICAA) in 1946 and these accounting practices were called as “Recommendations of Accounting Principles”. These accounting principles were just barely “copied” from those issued earlier by the Institute of Chartered Accountants of England and Wale (ICAEW). However, these accounting practices somehow led to high level of nonconformity because lack of united professional body to work on the issues incurred. Other than ICAA that is incorporated by Royal Charter, another professional accounting body named CPA Australia (was initially known as the Australian Society of Accountants, ASA then changed its name to the Australian Society of Certified Practicing Accountants, ASCPA and changed it name to CPA Australia in 2000) also issued accounting practices that deal with subjects related directly in preparation of financial statements. In 1966, ICAA and CPA were then jointed and work together to form Australian Accounting Research Foundation (AARF) to research and issue proposed accounting standards through its Accounting Standards Board (AcSB) and the Public Sector Accounting Standards Board (PSASB) to the private sector and public sector organizations. The process of how AARF issued accounting standards was pretty much the same as how The International Public Sector Accounting Standards Boards (IPSASB) did, identifying the issue area and research for the issue and followed by invite comments form the public to debate after the issue. In 1970s, even though AARF was...
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...BAO 3309 Advanced Financial Accounting Semester 2 2013 BAO3309 Advanced Financial Accounting: Research Assignment INDIVIDUAL ASSIGNMENT – 20% (Due date: no later than 5pm on Wednesday 18 September 2013) This assignment weighs 20% of the total grade of this subject. It must be handed in before the due date and meet all the submission requirement for successful completion of the subject Research topic: Convergence of international financial reporting standards 1. Your essay needs to address the following questions: A. Critically review literature on arguments for and against global convergence of international financial reporting standards (IFRS) B. Identify two listed companies: one from Australian Securities Exchange (ASX) and the other from New York Stock Exchange (NYSE); and analyse the accounting policy statement in their annual reports for the reporting year 2012 C. Discuss if your findings of Question 2 support (or reject) the convergence of IFRS. 2. Submission requirement 1. In-text references and a reference list are required to evidence your review of literature (see Appendix 1 for a list of academic journals) 2. Style: Use the following reference style (adapted from The Journal of International Accounting’s Author’s Information) for your assignment a. References list: references should be arranged first alphabetically and then further sorted chronologically if necessary. More than one reference from the same author(s) in the same year must be identified by the letters...
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...internally generated assets. With two imperative standards in practice today, one being the IASB’s selective capitalisation of expenses into an intangible asset once a specific criteria has been reached and the other being the FASB’s system of straight expensing of all expenditure. This subject plays a vital role in the accounting world due to the large amount of money invested into research and development activities, with the Australian Bureau of Statistics 2010 reporting that Business expenditure on R&D (BERD) in Australia alone increased 15% to $14, 380 million up from 07-08. In discussing the different styles taken by the Boards it is easier to identify the impact these standards have on a corporation and its performance, with particular reference being made to Clinuvel Pharmaceuticals Limited, an Australian listed company that is currently undertaking research and development to develop a UV medical protection of the skin from UV and light for sun-related ailments. 1. Clinuvel Activities of R&D Clinuvel Pharmaceuticals Limited (CUV) is a listed Australian biopharmaceutical company based in Melbourne. The focus of CUV is to further research and develop, and eventually commercialise, its leading drug candidate afamelanotide as “a preventative treatment for a range of UV-related skin disorders as well as in cancer related treatments” (Clinuvel Newsletter May, 2010). The report (Clinuvel Pharmaceuticals Ltd 2009) states that the drug attempts to provide medical protection from...
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...approaches. Therefore, to overcome this problem, International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) are working on it by taking the necessary steps as time passes to close down the gap and standardised the accounting principles globally making it easier for all parties. (157 words) 1.0 Introduction In the world of globalization, a number of countries had been experiencing the convergence of their local GAAP and IFRS in order to apply the international accounting standard to suit the growing business world. This does not left out the people of the United States who are also trying to converge the accounting standards of US GAAP and IFRS in order to close down the gap between the accounting standards. FASB and IASB are the main international bodies assisting the Securities and Exchange Commission (SEC) to achieve this goal. 2.0 Benefits 2.1 Facilitate international business and economy growth There are a number of benefits that people can gain from the convergence of US GAAP and IFRS. For example, the convergence of these accounting standards will...
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...generated assets. With two imperative standards in practice today, one being the IASB’s selective capitalisation of expenses into an intangible asset once a specific criteria has been reached and the other being the FASB’s system of straight expensing of all expenditure. This subject plays a vital role in the accounting world due to the large amount of money invested into research and development activities, with the Australian Bureau of Statistics 2010 reporting that Business expenditure on R&D (BERD) in Australia alone increased 15% to $14, 380 million up from 07-08. In discussing the different styles taken by the Boards it is easier to identify the impact these standards have on a corporation and its performance, with particular reference being made to Clinuvel Pharmaceuticals Limited, an Australian listed company that is currently undertaking research and development to develop a UV medical protection of the skin from UV and light for sun-related ailments. 1. Clinuvel Activities of R&D Clinuvel Pharmaceuticals Limited (CUV) is a listed Australian biopharmaceutical company based in Melbourne. The focus of CUV is to further research and develop, and eventually commercialise, its leading drug candidate afamelanotide as “a preventative treatment for a range of UV-related skin disorders as well as in cancer related treatments” (Clinuvel Newsletter May, 2010). The report (Clinuvel Pharmaceuticals Ltd 2009) states that the drug attempts to provide medical protection from...
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