Chap12Solutions

Chap12Solutions - Chapter 12 Multinational Accounting...

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Chapter 12 - Multinational Accounting: Issues in Financial Reporting and Translation of Foreign Entity Statements 12-1 CHAPTER 12 MULTINATIONAL ACCOUNTING: ISSUES IN FINANCIAL REPORTING AND TRANSLATION OF FOREIGN ENTITY STATEMENTS ANSWERS TO QUESTIONS Q12-1 Expected benefits of adopting a single set of high-quality accounting standards include: 1. Continued expansion of capital markets across national borders. 2. Faster availability of financial statements that provide needed information to investors in countries where standards have not previously focused on information needs of investors. 3. More rapid development of stable, liquid capital markets. 4. Increased economic growth. 5. Improve ability of investors to evaluate opportunities across national borders. 6. Improve the efficient use of global capital. 7. Reduce reporting costs for corporations that wish to access capital in markets outside of their home country. 8. Increase confidence of financial statement users in the quality of financial reporting. Q12-2 The IASB is an independent, privately funded accounting standards-setting body. the mission of the IASB is to develop a single set of high-quality, understandable, and enforceable global accounting standards. The IASB is composed of 14 members who each serve a five-year term subject to one reappointment. Members are required to sever all employment relationships that might compromise their independent judgement in setting accounting standards. The IASB is based in London. Q12-3 The IASB solicits input from the public when evaluating potential standards and publishes a discussion paper and/or an exposure draft which are subject to comment before issuing a final standard. Q12-4 IFRS are already mandated or permitted in over 100 countries around the world. Beginning with 2005, the European Union mandated the use of IFRS for companies listing on stock exchanges in the EU, although the EU also continues to accept statements prepared according to US GAAP. Beginning in 2008, foreign private issuers who list their shares on US stock exchanges may use IFRS in their financial statements without reconciliation to US GAAP. Q12-5 The SEC is considering allowing US companies to use IFRS in their financial reports. The SEC held roundtable discussions in December 2007. Among those participating in the roundtable, there was overwhelming support for adopting for the use of a single of global standards, and the majority of the panellists agreed that IFRS ultimately will be the standard. There was general agreement among roundtable participants that the SEC should specify a date by which US issuers would be required to prepare financial statements in accordance with IFRS. The target date most often mentioned should conversion be required is 2011, to coincide with the adoption of IFRS by a number of other countries including Canada and India.
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Chapter 12 - Multinational Accounting: Issues in Financial Reporting and Translation of Foreign Entity Statements 12-2 Q12-6 Improve global competitive position of US corporations.
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This note was uploaded on 03/26/2011 for the course ACTG 3400 taught by Professor Durkee during the Spring '11 term at Weber.

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Chap12Solutions - Chapter 12 Multinational Accounting...

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