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13 Dec 2019

Which ONE of the following is TRUE with respect to International Financial Reporting Standards (IFRS)

Adopted by the IRS as a substitute for U.S. GAAP

Developed by a joint committee of the AICPA and the European Union.

Allowed by the SEC for use in the United States by non-U.S. companies

Developed by a high commission of the United Nations

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Nestor Rutherford
Nestor RutherfordLv2
17 Dec 2019
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Related questions

Discuss the Differences Between GAAP and IFRS

Important Note:All elements of the Week 2Discussion must be completed by Day 7of Week 2.

Accountants are responsible for following standards,conventions, and rules in order to ensure ethical accounting intheir day-to-day practices. However, the rules in the United Statesvary from those followed in other countries. The United States useswhat is called U.S. GAAP. “GAAP” stands for GenerallyAccepted Accounting Principles. Most of the rest of the worlduses what is called International Financial ReportingStandards known simply as “IFRS.” The United States is in theprocess of either converting or converging U.S. GAAP with IFRS.

To complete this Discussion:

Using your preferred search engine (such as Google), enter oneor more of the following keywords:

IFRS

U.S. GAAP conversion

U.S. GAAP convergence

U.S. GAAP v. IFRS

Using what you’ve learned in the interactive course contentalong with the results of your Internet keyword search, focus onand deeply explore the differences between GAAP and IFRS. Considernot only written articles, but also video lecture search results,which you can find by doing your keyword search on YouTube.com. Besure to critically evaluate the sources that you encounter in yourInternet search. Are they reliable? Are they current?

Post an initial response along with responses to others’ posts,following the directions shown below.

Post a response of at least 150 words in which you discuss thedifferences between GAAP and IFRS. As you write your post, considerthe following:

What are implications of the differences in these two differentfinancial reporting systems?

What are two benefits and two challenges with each?

9. The United States requires foreign companies that wish to havesecurities traded on U.S. exchanges to reconcile their reportingmethods to U.S.:
congressional law.
generally accepted accounting principles.
generally accepted auditing standards.
tax law.


10. When compared to U.S. GAAP, international accounting standardsallow:
about the same latitude.
less latitude.
much more latitude.
no tolerance from U.S. GAAP.


11. According to the SEC's Statement on International AccountingStandards, the SEC requires three key elements for acceptance ofthe IASC's proposed core standards. Which one of the following is arequired element?
The standards must be routinely interpreted and applied.
The standards must be in accordance with U.S. governmentalaccounting (Yellow Book) standards.
The standards must comply with U.S. GAAP.
The standards must include a core set of accounting pronouncementsthat constitute a comprehensive, generally accepted basis ofaccounting.


12. A decline in the purchasing power of a country's currencyis:
abnormal.
deflation.
inflation.
mandatory inflation.


13. When a company uses the current cost accounting approach fordealing with inflation, all nonmonetary assets are reflected on thebalance sheet at:
current costs at the balance sheet date.
future value.
net realizable value as of the beginning of the year.
price-level adjusted historical cost.

The International Organization of Securities Commissions (IOSCO)is a group of top securities administrators from about 50countries. The Securities and Exchange Commission (SEC) is a memberof IOSCO. IOSCO is a primary supporter of the internationalizationof financial reporting standards through the InternationalAccounting Standards Board (IASB). At a recent meeting, adiscussion of the pros and cons of internationalizing financialreporting standards included the following arguments:

Pro:

Having the same accounting standards for external financialreporting for all securities markets will reduce misunderstandingsand create comparable information. For example, investors will beable to compare the financial reports of similar companies locatedin the United States with those located in China and decide wherebest to allocate their investments. One set of accounting standardswill also save corporations money because they will not needmultiple sets of books to track their international operations.

Con:

Requiring companies that list on all global securities exchangesto use the same external reporting requirements will misleadinvestors. For example, in countries where the majority ofinvestment funds come from banks in the form of long-termborrowing, debt to equity ratios will look very different thanthose of comparable U.S. firms. Accounting information must reflectits environment. Besides, as all business becomes global, reportingrequirements will naturally evolve to what investors demand.

Instructions

Write a one-page summary reflecting your opinion about the valueof harmonizing accounting standards for global equity markets.Support your opinions by referencing comparable cross-countrycompanies you have located on the Internet.

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