Purchase Solution

International vs US Standards Accounting

Not what you're looking for?

Ask Custom Question

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.

Required:
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?

Purchase this Solution
Solution Summary

The solution discusses International vs US Standards in regard to GAAP accounting standards.

Solution provided by:
Jo Ann Prevetti, MBA, PhD (IP)
Education
  • Master of Business Administration, University of Phoenix
  • Bachelor of Science in Paralegal Studies, Kaplan College
  • Business Diploma, Katharine Gibbs Business College for Women
Recent Feedback
  • "Thank you!!!"
  • "Thank you"
  • "Thank you so much "
  • "Thank you very much"
  • "Thank you so much "
Purchase this Solution
Free BrainMass Quizzes
Basics of corporate finance

These questions will test you on your knowledge of finance.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

View More Free Quizzes
Related BrainMass Solutions

  • What is the purpose of Accounting?

    161973 The Purpose of Accounting: Example Problem Why do we have an accounting system? And what's the difference between the US system vs. and International system (ex. foreign currency)?

  • US vs International Financial Reporting Standards

    433678 US vs International Financial Reporting Standards Where does the U.S. stand with IFRS now? Topic: US vs. International Financial Reporting Standards -Where does the U.S. stand with IFRS now?

  • Accounting Standards: GAAP & IFRS

    GAAP vs. IFRS What is the GAAP and the IFRS? Well, they are accounting systems. US GAAP means Generally Accepted Accounting Principles while IFRS International Financial Reporting Standards.

  • Should FASB converge with IASB? How will impact auditing st

    There is an international body that also provides rules and regulations for accounting standards known as the IASB (International Accounting Standards Board).

  • United States accounting standards

    Differences are frequently found in the following areas: -Research and development -Goodwill -Consolidations -Capitalized Interest -Asset Valuation -Leases -Inflation accounting Please provide resources. Accounting standards: U.S. vs.

  • US GAAP vs IFRS: Principles Based or Rules Based

    IFRS are principles based standards, rather than strict rules based standards that govern international accounting."

  • Accounting standards

    Let us consider some important developments. International Accounting Standards Board has issued GAAP requirement for smaller entities.

  • Accounting reporting criteria

    240351 Accounting reporting criteria The historical cost vs fair market value relating to national and international companies. There are four components. 1. Defining historical cost 2.

  • International Accounting Standards

    The two major international Accounting Standards are IFRS (International Financial Reporting Standards) of the International Accounting Standards Board and US GAAP or Generally Accepted Accounting Principles of Federal Accounting Standards Board.

View More Related Solutions