S GAAP and the IFRS FAS 141r and FAS 160 were created to improve reliability

S gaap and the ifrs fas 141r and fas 160 were created

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Board (FASB) mostly as an effort to support in the convergency of the U.S GAAP and the IFRS. FAS 141r and FAS 160 were created to “improve reliability, comparability, and improve the relevancy of financial statements” (James, 2010). Until now, there were no actual guidelines on business combination accounting. This allowed companies to have a guide when handling non- controlled interest and acquisitions. A Special Purpose Entity (SPE) is created by an organization to prevent financial risk. Companies transfer assets to their SPE or finance projects without putting the entire company at financial risk. In 2009, FASB issued Statement #166 “Accounting for Transfers of Financial Assets” (James, 2010) which required more information regarding transfer of assets which includes securitization transactions. This statement eliminated the idea of “qualifying special- purpose entity” (SPE). In, IFRS, Companies are forced to consolidate their SPEs.
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MBA 6601: UNIT VII CASE STUDY 4 If a company was to adopt IFRS there would need to be some changes that management should be aware of. Management should ensure to provide adequate training regarding the new procedures and policies that are implemented with the transition to the new financial reporting system. Under the company’s new principles, non-controlling interest are assessed at fair market value. The assessment would definitely affect the total assets and equity of any SPE.
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