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Policy Choices under IFRS in UK and German Context - Essay Example

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Author : adelemueller

Summary

This essay explores the Policy Choices under IFRS in UK and German Context. The paper demonstrates the table which reflects the 6 big corporations of UK and German which represents their policy choices of IFRS. It also shows a comparison between the policy choices of UK companies and the German companies…

Extract of sample
Policy Choices under IFRS in UK and German Context

The present research has identified that after the mandatory adoption of IFRS by the public listed companies in 2005-06 especially in the Euro zone, the companies develop their financial statements in accordance with the guideline provided by the IFRS. IFRS, however, allows different policy choices for the companies to make. For example, in measuring the inventory, IFRS has provided a policy choice of measuring inventory amount on the basis of either FIFO method or on weighted average method. Similarly, some other choices have also been framed by IFRS to the companies, like they can value their property, plant and equipment either on cost model or revaluation model etc. Nobes studied this area of research and outlined 16 policy choices that are mostly available to the companies. The four choices have been eliminated from this analysis as some of them are industry specific and some of them are commonly used by every company no matter in which industry they operate. The rest of twelve policy choices do have some issues with them as some organizations do not disclose their policies at times. The most common examples are of “investment property” and “inventory” such that in relation to investment property, organizations do not disclose whether these investment properties are valued at cost or fair value, and in case of inventories, organizations at times do not disclose whether the inventories are valued at FIFO method or weighted average method. ...
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