Harmonizing Accounting Standards For Global Equity Markets

530 words - 3 pages

Harmonizing Accounting Standards for Global Equity Markets
I am in agreement with IOSCO of which the Securities and Exchange Commission (SEC) is a member that the financial reporting across the globe should be standardized. The U.S. SEC has proposed that the U.S. GAAP be replaced by IFRS which would allow financial information to flow globally without having to be adjusted.
My reasons for agreeing start with the fact that the world as we know it is becoming more global in nature. Businesses are expanding their boundaries into foreign countries to remain profitable. People are able to travel more, and even if you can’t physically get to the products you can get there via the internet.
Companies have had to change with the times, the world has become global and ...view middle of the document...

Operating in these countries require that the companies abide by their laws and accounting standards in addition to the ones imposed by their own country.
Let’s look at Ford Motor Company and Honda. Ford is a publicly traded company in the U.S. so must adhere to U.S. financial reporting standards and regulations. Honda must abide by these same standards since it is publicly traded in the U.S. even though it is based in Japan.
Ford follows U.S. Generally Accepted Accounting Principles (GAAP) and Honda follows Japan GAAP which is equivalent to International Financial Reporting Standards (IFRS). This means adjustments must be made to any financial reports that Ford does globally because it uses US GAAP and Honda must do adjustments to any reports that it submits in the US because they use Japan GAAP. This means a lot of rework, wasting time and adding cost to report financials. One of the cons of not going to (IFRS) is that it will cost companies currently following US GAAP time and money to convert over to IFRS. My thought is it would be a one- time conversion and would save money going forward. As for domestic companies that are not currently global, it will ensure they are prepared in the event they globalize.
References:
Austin, Stephen G. (May 18, 2009). Major Differences in U.S. GAAP & IFRS and Latest Developments. Retrieved March 9, 2013, from
http://swensonadvisors.com/assets/MajorDifferencesBetweenUSGAAPandIFRS.pdf
Epstein, Barry (2/4/2011). US GAAP to IFRS Accounting Transition Overview. Retrieved March 9, 2013, from
http://www.jdsupra.com/legalnews/us-gaap-to-ifrs-accounting-transition-ov-13575/
Suttle, Rick (What Are the Biggest Expenses of Manufacturing? | eHow.com from http://www.ehow.com/info_12152458_biggest-expenses-manufacturing.html#ixzz2N0vlolna

Other Essays Like Harmonizing Accounting Standards for Global Equity Markets

Accounting Standards Boards Paper

1150 words - 5 pages set of high quality, international accounting standards to be used in at least all major capital markets” (FASB, 2012). The US, Japan and China are currently working with the IASB in support of convergence and global accounting standards. The FASB is an American organization based out of Norwalk, CT, and is the designated authority in the private sector for creating and enforcing domestic accounting standards. The US Securities and Exchange

Accounting Standards Board Essay

1370 words - 6 pages financial reporting standards (IFRS). The FASB’s mission is to improve U.S. financial accounting standards for the benefit of present and potential investors, lenders, donors, creditors, and other users of financial statements (International Convergence–Overview, 2014). The FASB believes that by bringing forward convergence and making global accounting standards as similar as possible, it will accomplish their goals. Not only will investors

Bus520 Chapter 15 & 16

1084 words - 5 pages . Identify the foundations of the accounting system, including GAAP and the role of the Financial Accounting Standards Board (FASB). 4. Outline the steps in the accounting cycle, and define double-entry bookkeeping and the accounting equation. 5. Explain the functions and major components of the four principal financial statements: the balance sheet, the income statement, the statement of owner’s equity, and the statement of cash flows

Asr, Topic 1 Essay

967 words - 4 pages understand and compare before their decision making. Thirdly, the IFRS adoption by Japan is going to improve nation’s capital market, making it more international-standardized at all. According to World Federation of Exchanges, Japan owns one of the world’s largest equity markets, which requires Japan to adopt more standardized GAAP for global investors (IASPLUS, 2004). The convergence of Japan GAAP to IFRS is about to improve the confidence of

International Financial Reporting Standards (Ifrs) in Indian Context

1838 words - 8 pages imperative for India also to make a formal strategy for convergence with IFRS with the objective to harmonize with globally accepted accounting standards. IFRS - Global Context In the present era of globalization and liberalization, the World has become an economic village. The globalization of the business world and the attendant structures and the regulations, which support it, as well as the development of e-commerce make it imperative to

U.S. Vs. International Auditing Standards

692 words - 3 pages . Over the past several years the Sarbanes-Oxley Act and other events have dramatically affected the setting of auditing standards and the focus of the audit process. The explosive growth of investing and raising capital in the global markets has put new emphasis on the development of international accounting, auditing, and ethical standards. The benefits for the use of common global accounting standards by preparers of financial statements and

Financial Accounting Boards

1186 words - 5 pages global accounting regulations. These standards require information that is comparable and readily understood for general purpose. The IASB works hand-in-hand with national accounting regulatory bodies in accomplishing a union in global accounting standards. The IASB offers guidance where diversity in practice occurs (IASB, 2007). The International Accounting Standards Board (IASB) develops enforceable, understandable, single set of high quality

Fair Value Accounting Under Financial Crisis

2476 words - 10 pages , economists must examine the explicit and implicit connections of reported accounting numbers to the actions of the players in the financial markets and then ask whether such connections can create or exacerbate the problems that occurred over the last year. In our opinion, fair value accounting is the wrong scapegoat for this crisis. In other words, markets do not appear to be blinded by “artificial” features of accounting data. The problems

Intermediate Financial Accounting

5060 words - 21 pages standards and procedures. a 40. Limitation of general purpose financial statements. c 41. Securities and Exchange Commission and accounting standard setting. d 42. Due process in FASB standard setting. d 43. Organizations responsible for setting accounting standards. b 44. Reason for Accounting Principles Board creation b 45. Organization issuing Accounting Research Bulletins. a 46. Characteristic of GAAP. c 47. Characteristics of GAAP

Impact of the Adoption of Ifrs on Accounting in Usa

542 words - 3 pages Impacts of the adoption of IFRS on accounting in US. As globalization becomes popular in the world, the global accounting standard for the business enterprises which are globally operating should have to be developed. International Financial Reporting Standards, IFRS, would solve this issue for the global businesses to have a clear, accurate and consistent common set of accounting reporting standards. There are more than 100 countries that have

Int Acct 1midterm

2604 words - 11 pages U.S. and foreign capital markets it is necessary to have a common financial reporting system. This problem becomes more acute for the multinational; companies, which has to repot in two different manner for two different country’s rule. To overcome this problem, in 2002 the FASB and the IASB entered into an agreement in which each Board acknowledged their commitment to the development of high-quality, compatible accounting standards that could

Related Papers

U.S. And Global Markets For Ethical Nutrition In Healthcare

876 words - 4 pages Dec 30th, 2014, Mumbai, India: Bharat Book Bureau presents the report, on “U.S. and Global Markets for Ethical Nutrition in Healthcare”. This report is designed as a comprehensive business tool to provide an across-the-board look at ethical nutrition in healthcare. The global market for ethical nutrition in healthcare was valued at roughly $34.5 billion in 2013 and increased to $37.1 billion in 2014. This market is expected to reach about

Accounting Standard Board Paper

1323 words - 6 pages due to the US companies have large amounts of revenue and profits in the foreign markets. The International Accounting Standards Board (IASB) was established in 1973 to achieve the purpose of harmonizing the international accounting standards (Schroeder, Clark, & Cathey, 2011). The companies that are in need of capital or investments are looking at cost and time issues, because these companies have to redo their financial statements according

Development Of Accounting Practices In Austrailia

1896 words - 8 pages than setting and reviewing the Australian accounting standards, AASB also helped in harmonizing and converging its accounting regulations of International Accounting Standard Board, IASB (where it was initially known as international Accounting Standards Committee, IASC) that successfully established by the Australian standard setters in 2001. The reason for AASB to harmonize and converges its standards is to assist and support the International

Research Paper

1574 words - 7 pages papers, exposure drafts and standard documentation, and coordinating meetings after the standard is issued. The IASB works with the IASC Foundation Trustees to raise funds for the organization but is solely responsible for managing and developing the International Financial Reporting Standards (IFRS). The IFRS are the interpretations, processes, standards and procedures that establish the general rules of accounting on a global scale. The