Case 3-5 International versus U.S. Standards: 350+ words
Under U.S. GAAP, property, plant, and equipment are reported at historical cost net of accumulated depreciation. These assets are written down to fair value when it is determined that they have been impaired.A number of other countries, including Australia, Brazil, England, Mexico, and Singapore, permit the revaluation of property, plant, and equipment to their current cost as of the balance sheet date. The primary argument favoring revaluation is that the historical cost of assets purchased ten, twenty, or more years ago is not meaningful. A primary argument against revaluation is the lack of objectivity in arriving at current cost estimates, particularly for old assets that either will or cannot be replaced with similar assets or for which there are no comparable or similar assets currently available for purchase.
a. Discuss the qualitative concept of comparability. In your opinion,
would the financial statements of companies operating in one of the
foreign countries listed above be comparable to a U.S. company's financial statements? Explain.
b. Discuss the concept of reliability. In your opinion, would the amounts
reported by U.S. companies for property, plant, and equipment be more or less reliable than the current cost amounts reported by companies in
England, Mexico, or elsewhere?
The solution discusses International vs US Standards in regard to GAAP accounting standards.
International Accounting Standards Board (IASB)
Write a report, providing your responses to the required portion of the case. Be sure to properly cite all resources used to write your report. If you use an electronic source, include the URL. If you use an additional printed source please attach a copy of the data to your paper.
A manager you work for is making a business trip to London. The manager has several meetings at the company's operating units in London. In addition, the manager is considering a visit to the International Accounting Standards Board (IASB) office in London. The manager has asked you to perform some research on the IASB so that he will have some background information for his visit. (Hint: A helpful search term is "International Accounting Standards Board"). Locate the following information and incorporate this information into a two- to three-page report.
a. Provide a brief history or discussion of the IASB, making sure to include the following additional facts:
(1) The role of the IASC Foundation.
(2) Structure of the IASB.
(3) Number of accounting standards currently published.
(4) Explanation of the steps involved in creating an international accounting standard in accordance
with due process.
(5) Local mailing address and phone number.
b. Briefly summarize the two most recent accounting standards issued by the IASB.
Be sure to properly cite all resources used to write your report. If you use an electronic source, include the URL. If you use an additional printed source please attach a copy of the data to your paper.View Full Posting Details