...established a wholly-owned subsidiary inChina (BB Pijio) to handle the distribution of Besserbrau products in that country. In the most recentyear, sales to BB Pijio accounted for 20% of Besserbrau’s sales and BB Pijio’s sales to customer in China accounted for 10% of the Besserbrau Group’s total profits. In fact, sales of Besserbrau products in China have expended so rapidly and the potential for continued sales growth is so great that thecompany recently broke ground for the construction of a brewery in Shanghai, China. To finance construction of the new brewery, Besserbrau negotiated a listing of its shares on the London Stock Exchange to facilitate an initial public offering of new shares of stock. Required: Discuss the various international accounting issues confronted by Besserbrau AG. 1. Sales foreign to customer As we have known, Besserbrau do export its products to China, it means Besserbrau does not selltheir products only at their country in German anymore, but Besserbrau expand their sales to foreign customer. The...
Words: 814 - Pages: 4
...The focus of our work is to evaluate, recognize and discuss the adoptions, progress and achievements of the EU efforts in harmonizing their accounting framework within their region and with other nations worldwide. 1. Introduction The Fourth and Seventh Law Directives provide a basis for the preparation of the accounts of companies in the EU. The Directives however do not provide a universal standard which was required for the users in the 1990s mainly in the US, when major European companies were seeking globalization efforts in listing their companies across regions onto their various capital markets. In 2002, a decision by the European Union (EU) led to the passing of a International Accounting Standard (IAS) regulation. Requiring all listed companies in the EU to prepare their accounts in accordance with the International Accounting Standards (IAS). International Accounting Standards Board (IASB) was established in 2001 to 2. Motives of harmonizing accounting practices The initial standards set by EU and any other nations in early centuries were more to accommodate to individual business structure and analyzing needs, rather than for external reporting purposes. The needs were more focus on individual rather than for mass review or scrutiny. At that point of time standards and harmonization of reporting were not highly regarded for as businesses...
Words: 397 - Pages: 2
...1.a) Achievements and Failure – Harmonization Process – EU & IASB International business are no longer confronted only with Accounting problems, which ends at domestic borders. When companies, equity, or capitials cross borders they are confronted with new cultures, challenging new laws and differences in political systems. Besides that there are the differences in Accounting Standards abroad. For example there are the US gaap and IAS. The lack of similar Accounting Standard led to problems in comparing financial datas and informations. Another issue is that not all financial statements or Accounting Standards are accepted in all stock exchanges. Example, companies who would like to be listed in New York Stock Exchange, have to have additional reporting, other than their national standards (reporting) in accordance with the prevailing US-Gaap. This means extra work, example reconciliation that equates to extra costs. The rapid emergence of MNE highlight the problems further. This is where the work of EU and IASB becomes internationally crucial. The aim was not only to avoid diversity of financial statements, ‘birth of two standard-reporint’, to promote foreign investment but to also reduce extra cost in producing two repors. Their journey (EU and IASB) were however not smooth sailing. IASB and EU-failure :- Initial attempt to harmonise accounting practice by EU was via the issuing the directives. There are several setbacks;- 1- Measurement options, apply...
Words: 989 - Pages: 4
...International Financial Reporting Standards Colin Erskine DU- Accounting 301 03/13/2014 International Financial Reporting Standards “Over the last decade, progress has been made to harmonize financial accounting standards and practices into one set of single standards to be implemented by businesses domestically and internationally” (Harper, A. Leatherbury, L. Machuca, A. Phillips, J.). There has been some controversy among accounting professionals regarding the impact that switching to International Financial Reporting Standards (IFRS) from Generally Accepted Accounting Principles (GAAP) will have on United States corporations and investors. On November 14, 2008 there was a proposal that was later made mandatory, issued by the SEC making corporations within the United States switch to International Financial Reporting Standards for fiscal years ending after 2014. There are many disadvantages and advantages that could arise when moving to a global set of standards. International Financial Reporting Standards are a set of international accounting standards, which state how transactions and other events should be reported within financial statements. These standards are becoming the global standard for the preparation of public companies financial statements. “Approximately 120 nations and reporting jurisdictions permit or require IFRS for domestic listed companies, although approximately 90 countries have fully conformed with IFRS as promulgated by the IASB and include...
Words: 1313 - Pages: 6
...Globalization lies in the international integration arising from the interchange of products, ideas and practices. The development of e-commerce and liberalization of the economy, structures and the regulations which support it, drove to have a single worldwide accepted financial reporting system. A large number of multinational corporations are setting up their business units in different countries and are increasingly accessing the global markets by listing their securities on the foreign stock exchanges. Corporations around the world venture into business activities either through their own presence in different parts of the world or through their subsidiaries, collaborations, associates and joint ventures....
Words: 1272 - Pages: 6
...------------------------------------------------- International Accounting Standards * Print * PDF * Cite * Comparable, transparent, and reliable financial information is fundamental for the smooth functioning of capital markets. In the global arena, the need for comparable standards of financial reporting has become paramount because of the dramatic growth in the number, reach, and size of multinational corporations, foreign direct investments, cross-border purchases and sales of securities, as well as the number of foreign securities listings on the stock exchanges. However, because of the social, economic, legal, and cultural differences among countries, the accounting standards and practices in different countries vary widely. The credibility of financial reports becomes questionable if similar transactions are accounted for differently in different countries. To improve the comparability of financial statements, harmonization of accounting standards is advocated. Harmonization strives to increase comparability between accounting principles by setting limits on the alternatives allowed for similar transactions. Harmonization differs from standardization in that the latter allows no room for alternatives even in cases where economic realities differ. The international accounting standards resulting from harmonization efforts create important benefits. Investors and analysts benefit from enhanced comparability of financial statements. Multinational...
Words: 1748 - Pages: 7
...laws of companies, to form incorporated capital markets and endorse openness between counties during good and labor transfer. (Aswathapa, 2010) EU Harmonizing efforts The European Union EU has worked to harmonize accounting standards within the EU by using two directives, which are the fourth Directive (1978) and the seventh Directive (1983) that were able to enforce laws. After applying the EU new accounting standards they decided in the year 1995 to transfer to international standards. Moreover, the transfer was done by following the IASC efforts. In the year 2000 the European Union requested all the companies to follow the IFRS standards when preparing consolidated statements. (Khan, 2008) The directives used by the EU were the most appropriate way to minimize the differences between the twelve European Union countries. According to Dedman (2010) “directives are legislative instruments from the commission to the member state “. According to the fourth and the seventh company laws applied by the EU, a synchronized basis of the accounting preparation is provided, where the accounts of individual companies and group companies may be prepared. These applied laws have enhanced the performance of companies to lift the accounting standards, improve the accounting comparability and turn the cross business exchange by allowing them to exchange accounts and...
Words: 2747 - Pages: 11
...IMPEDIMENTS TO INTERNATIONAL HARMONIZATION Initially, the original idea to harmonize global accounting first met in St. Louis, Missouri in 1904. The idea floated for 62 years before the United State (US), Canada and the United Kingdom (UK) formed Accountants International Study Group (AISG) in which it purpose was to study and report on accounting practices in the three countries. Then in 1973, the International Accounting Standards Committee (IASC) was established and mandated to develop worldwide accounting Standards. In 1977, the AISG was disbanded and replaced by the International Federation of Accountants (IFAC) to developed and enhance a coordinated worldwide accounting profession with harmonized standards[1]. However, the goal towards international accounting harmonization does not come without certain impediments in which lead to the hindrance to the harmonization process. In support to the statement above, it was noted by Nobes and Parker (2010) that among the obstacles to harmonization were, the size of the present differences between the accounting practices of different countries, the main or predominant purposes of financial reporting which are varies in between countries, the lack of international regulatory agency, nationalism and the effect of economic consequences on accounting standards. The differences between accounting practices of different countries presently can mean such matters as accounting system classification, the financial reports users and...
Words: 1630 - Pages: 7
...the beachhead of accounting field. International Accounting Standards Board (IASB) little by little surpasses Financial Accounting Standards Board (FASB) in dominance over accounting framework. There are more than 100 countries have adopted or have permitted to use or have been converging with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS), instead of following Generally Accepted Accounting Standards (GAAP) and Statements of Financial Accounting Standards (SFAS). For example, the United States, who requires foreign firms listed on America should compile financial statements under IFRS or SFAS, declares its specific adoption road-map for local firms. The European Union requests its member states starting to take up IFRS at 2005. When it comes to Asia, China has already announced to adopt IFRS since 2007. Over the last few decades, the fruitful areas of research have focused on the variation that arises from disparity between IFRS and GAAP. The two accounting systems have many constitutional differences, such as IFRS is principle-based standard while GAAP is ruled-based one, the former is fair value accounting while the latter is conservative. * Background of the FASB’s due process The FASB claims that, “The FASB is committed to following an open and orderly process for setting standards. It designed its comprehensive due process procedures to permit timely, thorough, and open study of financial accounting and reporting issues...
Words: 1568 - Pages: 7
...Internship Report On Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function’ by Syeda Afrina Sarwar ID: 07304063 BRAC Business School BRAC University, Bangladesh August 2011 ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function’ Submitted By: Syeda Afrina Sarwar ID: 07304063 BRAC Business School Submitted To: ------------------------------------------------Ms. Rahnuma Ahmed Lecturer BRAC Business School BRAC University, Bangladesh August 2011 Letter of Transmittal August 10, 2011 Ms. Rahnuma Ahmed Lecturer BRAC BUSINESS SCHOOL BRAC University 66, Mohakhali Dhaka-1212 Subject: Submission of Internship Report Dear Madam, I am submitting an internship report titled for ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review of Costing Function’ as a part of the requirement of the course. Your guideline has been followed in every aspect of preparing this report. I have really enjoyed working on this project and I hope that my work would meet the level of your expectation. Any query on this report is appreciated. Thank You. Sincerely, Syeda Afrina Sarwar ID:07304063 Acknowledgement It’s difficult for me to thank all of those marvelous people who have contributed something of them to this report. There are of course some very special people who cannot go...
Words: 15094 - Pages: 61
...| Worldwide accounting diversity | | | ACIB 872 | Assignment 2 | | Submitted By: Samer Alroujayee | | | Worldwide accounting diversity Assignment 2 Q1) CALLAWAY GOLF SUDZUCKER AG CEMEX S.A.B SOL MELIA SA THAI AIRWAYS B) It is not valid to calculate the profit margin for all the companies above due to the differences in financial reporting systems. The format, level of detail and terminology used in the financial statements are different from one company to another. Q2) As per CALLAWAY GOLF’s site “http://media.corporate-ir.net/media_files/irol/68/68083/AR2011/HTML2/callaway_golf-ar2011_0077.htm” And as per SUDZUCKER’s site “http://ir2.flife.de/data/sudzucker/igb_html/index.php?bericht_id=1000002&lang=ENG” A. As we look at CALLAWAY GOLF COMPANY (US Company) they follow the U.S accounting system GAAP. SUDZUCKER AG (GERMAN COMPANY) on the other hand, they follow German accounting system. B. Yes, by looking at both companies, they both have the following: 1. Consolidated balance sheet 2. Consolidated income statement 3. Consolidated cash flow statement C. The differences are: In CALLAWAY GOLF (US COMPANY) Operation Statement, it mentions the cost of goods sold in one line. While in SUDZUCKER (GERMAN) it lists the expenses in details such as expenses of personnel, cost of materials and depreciation. D. In CALLAWAY GOLF (US COMPANY), it lists the assets and liabilities on the balance sheet in order...
Words: 560 - Pages: 3
...Financing Decisions and the Accounting System HANDOUT 2 – 1 SOLUTION, continued ANALYZING TRANSACTIONS Analyze each of the following transactions of World Wide Webster by performing each of the following. Then, use the chart on the following page to keep track of the amount in each account: (a) Stockholder invests $10,000 into the business in exchange for 10,000 shares of $1 par value common stock. 1. Decide if a transaction took place. 2. Identify the accounts affected. 3. Classify each account affected. 4. Identify direction and amount. 5. Ensure the accounting equation is in balance. Yes – received cash and gave stock. Cash and Common Stock Cash is an Asset (A) and Common Stock is Stockholders’ Equity (SE) Cash (A) + $10,000 = Common Stock (SE) + $10,000. Yes – see below. (b) Borrow $15,000 signing a note payable to the bank that is due in three months. 1. Decide if a transaction took place. 2. Identify the accounts affected. 3. Classify each account affected. 4. Identify direction and amount. 5. Ensure the accounting equation is in balance. Yes – received cash and gave a note payable. Cash and Notes Payable Cash is an Asset (A) and Notes Payable is a Liability (L) Cash (A) + $15,000 = Notes payable + $15,000. Yes – see below. (c) Acquire a $15,000 truck and $5,000 worth of equipment. 1. 2. 3. 4. 5. Decide if a transaction took place. Identify the accounts affected. Classify each account affected. Identify direction and amount. Ensure the accounting equation is in balance. Yes...
Words: 1831 - Pages: 8
...Chapter 01 Introduction to International Accounting Multiple Choice Questions 1. Which of the following groups is a supranational organization? A) United Nations B) Organization for Economic Cooperation and Development C) International Federation of Accountants D) All of the above Answer: D Level: Easy LO: 1 2. Determination of net present value involves: A) forecasting future profits and cash flows. B) discounting future cash flows back to their present value. C) analysis on an after-tax basis. D) All of the above Answer: D Level: Medium LO: 1 3. International accounting can be defined in terms of which the following levels? A) Supranational organizations B) Company C) Country D) All of the above Answer: D Level: Easy LO: 1 4. The factor used to convert from one country's currency to another country's currency is called the: A) Interest rate. B) Cost of capital. C) Exchange rate. D) Strike price. Answer: C Level: Easy LO: 2 5. What is the term used to describe the possibility that a foreign currency will decrease in US $ value over the life of an asset such as Accounts Receivable? A) foreign exchange translation B) foreign exchange risk C) hedging ...
Words: 2846 - Pages: 12
...dissolves as a corporation. (3) A statutory consolidation results when two or more companies transfer all of their assets or capital stock to a newly formed corporation. The original companies are being “consolidated” into the new entity. (4) A business combination is also formed whenever one company gains control over another through the acquisition of outstanding voting stock. Both companies retain their separate legal identities although the common ownership indicates that only a single economic entity exists. Consolidated financial statements represent accounting information gathered from two or more separate companies. This data, although accumulated individually by the organizations, is brought together (or consolidated) to describe the single economic entity created by the business combination. Companies that form a business combination will often retain their separate legal identities as well as their individual accounting systems. In such cases, internal financial data continues to be accumulated by each organization. Separate financial reports may be required for outside...
Words: 7535 - Pages: 31
...Reference……………………………………...……………………………9-10 Coursework Part 1: Harmonization of international accounting standards Every organization has their own accounting systems and standards. If every organization is preparing its financial reports in their own way, it is difficult for the users of accounting to use the financial reports. (Kirk, & Miller, 1986) Harmonization of international accounting standards as the trend for globalization in business becomes increasingly important for economic success, many issues arise through international business practices for corporations, governments, and investors. There are many potential advantages and disadvantages/challenges associated with harmonization of accounting standards. (John, 2013) Advantages 1) Reduced Reporting Costs Multinationals operating in countries with different accounting standards would incur high costs of preparing financial reports in accordance with each country’s accounting principles, then repeating the whole process for consolidation purposes. Harmonized accounting standards benefits multinational corporations because they can prepare one report rather than one for each country in which they operate. In addition, it enables a systematic review and evaluation of the performance of foreign subsidiaries and associates. (Mark, 2013) 2) Improving Comparability To achieve the comparability against domestic and international peers, harmonization of accounting standards is advocated. Harmonization strives to enhance comparability...
Words: 1938 - Pages: 8
