Many publicly traded companies in the world today use International Financial Reporting Standards (IFRS) to give an account of their financial results. In the Us the IFRSs have not been adopted but they are likely to, if the Securities and Exchange Commission (SEC) rules in…
Albrecht affirms that the best way to determine the viability of adopting a new course of action is by use of incremental analysis in which the benefits of the change should outweigh its cost. The decision of the US moving to IFRS has triggered a lot of debate, with many participants narrowing its effect to the various parties. Among them are the investors whose protection is included in the SEC mission.
According to Albrecht two key elements defining financial markets under the U.S. GAAP are the low cost of seeking capital and the highest ROIs as compared to other markets in the world. This has to a major extent been attributed to the good rules that have been developed, challenged and shaped for several years, which has led to “bright lines” in reporting unlike in IFRSs where managers can manipulate numbers. If the adoption occurs the U.S. companies may experience a reduction in market value in stocks and bonds to unknown levels.
According to Parks the cost of adoption could be approximately $32 million per company. In fact British Petroleum CEO said that for his company $100 million was spent for the first year and roughly $150 million for the second and third year. This is a huge cost against revenue and it’s likely to affect the profit margins and consequently returns on investment.
Finally on the costs, in the U.S investors and accountants will need to learn how to read and interpret the financial statements prepared using IFRSs. This will need resources in terms of money and time to cover millions of these people.
The benefits to investors will be an expected reduction in audit fees whose effect will be felt as years pass by, as auditors will have to take corporate numbers at face value. Based on this analysis the cost are more tangible and seem to outweigh the benefits hence the move would not really benefit the ...
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The research demonstrates that the manner in which the FASB, IASB and the SEC have been working towards achieving convergence between the US GAAP and IFRS is indeed questionable. Despite several delays, there appears to be commitment between both sides to achieve a universal accounting framework at the earliest.
Strike by Staff Members 13 Loss in Revenue 13 Low Cost Airlines 13 Increase in Finance rates 13 High Cost of travelling 14 Highly Geared 14 Low Quality Service 14 Instability in Middle East 14 Competition 14 Critical discussion on the usefulness Financial Reporting 15 Differences between US GAAP and IFRS 17 Conclusion 20 Annexure 1 - Key Ratios Analysis 20 Bibliography 22 Executive Summary We have discussed in this report a comparison of Emirates Airlines with British Airways and have analyzed both of these in airlines in respect of ratio analysis and other analysis.
The US GAAP, (Generally accepted accounting principles) is another framework which is followed in many countries. This was created before IFRS. Though the purpose of creating these two frameworks is same but there are many differences in the policies and rules in both of the framework.
Since 2012 we have adopted those IFRS which were effective January 2009. However, there are no plans to at this time to adopt IFRS fully and some of the standards that were effective in 2009 have since been revised and would therefore increase the gap between our revised standard (for the process of convergence) and the revised IFRSs.
Generally Accepted Accounting Principles (GAAP) comprises of a standard framework of guidelines used in financial accounting in any jurisdiction of standard accounting practice. On the other hand, International Financial Reporting Standards (IFRS) entails a common language for accomplishing the business affairs to enable a company account for all its financial transactions across the international boundaries (Yang & Nguyen, 2003).
Bosch began as a Workshop for Precision Mechanics and Electrical Engineering. It was founded in 1886 by Robert Bosch (1861-1942). Its major shareholder is the not-for profit organisation "Robert Bosch Stiftung GmbH". (Company's Annual Report, 2005).
Bosch offers the following spare parts products: Batteries, wiper blades, starters and airfilters.
(Roberts et al, 2005). For example there are significant differences between the US GAAP standard that deals with the issue of segment reporting from the counterpart IAS standard. Under US GAAP, Statement of Financial Accounting Standard Number 131 (SFAS 131 Disclosures about segments of an enterprise and related information, which requires segmentation based on an entity's internal organization and reporting of revenue and operating income based upon the entity's internal accounting methods.).
tates companies abide by the Generally Accepted Accounting Principles, while in Europe companies abide by the International Financial Reporting Standards. The utilisation of each of these frameworks affects the information contained within them. This proposal studies the effect
l market within a country or a regional market, a company operating on the international arena, often referred to as a multinational corporation is one which is involved in the production or the delivering of services in more than a single country. As such, international
The most outstanding difference between the two is that while the GAAP is based on rules, the IFRS is based on principles. Unlike a rule based system, the principle based system allows for different interpretations of similar
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