0142F-Pertemuan2 - Course 0142F International Accounting...

Course: 0142F – International Accounting
International Convergence of
Financial Reporting
Session 2

1. Impact on multinational enterprises of the different pressures leading to
accounting harmonization and disclosure
2. How governments get involved in the harmonization of accounting
3. How trade unions and employees are interested in harmonizing accounting
4. Meaning of convergence, arguments for and against international convergence
of financial reporting standards
5. Development of International Accounting Standards Board
6. Principles-based approach used by the IASB in setting accounting standards
7. Framework for the preparation and presentation of financial statement
8. Proposed changes to the IASB’s Framework
9. IASB’s Standards related to the first-time adoption of International Financial
Reporting Standards (IFRS) and the presentation of financial statements
10. Support for, and the use of, IFRS across countries
11. Issues related to international convergence of financial reporting standards
12. Progress made in regard to IASB/FASB convergence project
13. Meaning of “Anglo-Saxon” accounting
Agenda

1. International Accounting 3
rd
ed. Timothy Doupnik & Hector Perera Chapter 3
page 65 – 108.
2. International Accounting 7
th
ed. Frederick D.S. Choi & Gary K. Meek Chapter 8
page 249 - 276
3. International Accounting and Multinational Enterprises 6
th
ed. Lee H.
Radebaugh, Sidney J. Gray & Ervin L. Black Chapter 7 page 151 - 184
4. Intermediate Financial Reporting – An IFRS Perspective. Nelson Lam & Peter
Lau Chapter 1 & 2 page 3 - 37
Source

•
Standardization
–
Rigid, narrow set of rules
– One-size-fits-all approach
–
Less flexible than harmonization or convergence
–
Not the current thinking
•
Harmonization
–
Standards that are compatible – no logical conflicts
–
Means the elimination of differences among existing accounting
standards
•
Convergence
–
Means the gradual elimination of differences in accounting standards
–
But might also involve a new accounting treatment not in any current
standard
–
Involves cooperative efforts of IASB and national standard-setters
–
Now the preferred term over harmonization
Meaning of convergence

Pressures for Harmonization

•
Government involvement in accounting determination
varies across the world
•
Do governments really use corporate reports?
–
Information needed by governments is often too extensive to
include in the report
–
Governments can demand whatever information they need
•
Information needs are extensive and confidential
–
These things suggest governments may not be important users
of corporate reports
–
Is this a paradox?
•
Explained by situations where governments might be users
1. Governments

•
Use reports, along with segmental information, to check
performance of local subsidiaries of MNEs
•
Governments wish to monitor MNE operations as a whole
•
Governmental needs in differing departments can be
accommodated by an annual report
•
Developing countries would have more information without