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Discussion weblog on international accounting. Discuss best practices, ideas, news, models, methods, theories, tools, questions and answers.
I am doing a case study for an international acct class that I am taking and I need some 'expert' opinions on it. Here is an overview of it:
On a conceptual basis, should purchase discounts be treated as a revenue or as a contra-expense (reduction of purchases/cost of sales/ inventory)?
Is the revised version of IAS 39 available for free download?If yes, can somebody tell me the URL?
More than a dozen companies on Thursday reported deficiencies with their internal accounting controls, forcing them to delay the filing of annual reports to regulators and sending investors for the exits.
A short article by Kevin Fogerty in Baseline Magazine (Sep2004) assesses the typical cost of complying with the Sarbanes-Oxley Act in the U.S. It also contains a handy standard calculation sheet that you can use to calculate your own costs of Sarbanes-Oxley compliance. You can also buy the spreadsheet here ($50).
There could be "blood all over the streets", the head of the IA Standards Board (IASB), Sir David Tweedie, warned recently, because of controversy over the next leg of its quest to harmonise global accounting rules.
The IASB is aiming to introduce a single set of global I. Financial Reporting Standards (IFRS) to increase financial transparency and so promote world investment and growth.
Sir David Tweedie said the challenges to come would dwarf those seen in the run-up to adoption of IA standards by European Union-listed companies in January, over which he has wrestled with Brussels. He described the recent setbacks as "a blip". "Now we're coming to the big ones and all of them will have controversy," he said in an interview with the Financial Times. The changes would involve setting standards on sacred cows such as leasing, insurance, performance reporting, and pensions, which he said would be tackled over the next three to five years.
"There will be blood all over the streets," he said, referring to the expected uproar from companies that might object to the new standards if they felt they would put their accounts into a poor light. A new standard on leasing, for example, could involve companies recognising leased assets as a liability, which would shift big items such as property and aircraft on to the balance sheet. "Every company with a big asset is going to erupt," he said.
The timetable for drawing up the new standards coincides with a number of other ambitious IASB initiatives which promise unprecedented reform in global A. practices this decade.
The IASB and the FASB, the US standard-setting body, want convergence between their two systems by 2007-2008, removing the need for reconciliation between US accounting principles and international ones. Truly global accounting rules are expected to make A. considerably easier for multinational companies.
In parallel, Sir David said the IASB hoped to bring China, Latin America and other parts of the world in line with IA standards.
He made clear the A. reforms were more than book-keeping exercises. He believed they could influence the way companies do business, improve market efficiencies, and lower risk premiums. Harmonising global A. standards could also stimulate greater cross-border transactions. "This is world trade; that's what it's all about," he said.
However, the IASB's recent tussle with the European Commission underlines the risk of political interference.
The two European compromises were on hedge A., allowing European banks to continue to hedge against interest rate changes, and on fair value, giving European firms an option on valuing certain financial liabilities at market rates -- an issue that had concerned the European Central Bank.
There will not likely be any changes in the near-term on hedge A., Tweedie said, but the IASB is working with the European Commission to amend the fair value option and to introduce voluntary changes early in the New Year.
"We are crafting new wording (on the fair value option) at the moment and will test that with lobby groups in the New Year and then put on our website as soon as we can."
A member of the International Accounting Standards Board (IASB) has said that the standard setter was wrong to bow to political pressure from the European Commission and water down proposals on the fair value option in IAS39.
An accountant goes into a pet shop to buy a parrot. The shop owner shows him three identical parrots on a perch and says, "The parrot on the left costs $500."
