Mgt 4045

Explain the rationale for the global harmonization of monetary describe and disclosure requirements. -Make the financial statement more comparable across the global market so investors can invest their capital in more efficient comparable. 2. Identify two groups that be exerting pressure for pursue global harmonization. How do these two groups stand to benefit from harmonization? -Investors are concerned with the reliability and comparability of sinacial statement in countries other than theirs.They elicit this because it allow for help lower cost of investing in countries on board and enhance the effectiveness of investment decisions. Multi case companies want global harmonization because of the increase in international diversity of manufacturing and sales. The fact that all history practices are not compatible means that they devote more resources to produce and consolidate in that respect financial statements. 3. What are the main obstacles to global history harmoni zation? In your opinion, are these obstacles likely to be over add together in the near future? The main obstacles are due to economics and politics. I deliberate it depart be a very slow and sticky process to invoke in the near future because of everyone sensitivity and assumption of there own countries.The polices would have to come from a super national system of rules and combine principals of many different countries. 4. What is the role of each of the chthonicmentioned supra-national organizations? a. International Accounting Standards Board (IASB) -Developed as a parent entity of the IASB, it is an individual standards setter that assumes accounting system standards saddle horse responsibilities from IASC. . International Federation of Accountants (IFAC) -Organizational accounting organization that represents accountants employed in national practices, and the primary activity is to serve public interests and to facilitate cooperation among members. c. Internationa l Organization of Securities Commissions (IOSCO) -Known as the international standard setters for securities market, it bear on high standards of regulation for sounds markets, and establishes standard and effective surveillance of international securities to number a few objectives. d.Organization for Economic Cooperation and Development (OECD) -Rich mans club, comprised of 30 countries that produce 2/3 of the worlds goods and services in were all countries are committed to a market economy and pluralistic democracy, that provided governments with a setting to discuss, develop, and perfect economic an d social policies. 5. The FASB has described their proposal to diversity to IFRS as an amend and take approach. What are the two parts of this improve and adopt proposal? Why does the FASB support this approach? First, the improve and adopt plan go out require a spliff effort by FASB and IASB to develop and improve standards in the areas that will benefit financial statements u sers universally. Secondly, a gradual approach transition to IFRS will reduce the disruptions that might emit from an abrupt switch. -Third, this approach allows other infrastructures elements to improve and converge fleck IFRS and better and mandated. Finally, this approach avoids the added cost and complexity of dealing with two accounting systems. 6.What is the crude plan for joint projects between the FASB and IASB? What is your assessment of the reasonableness of this plan? -The incumbent plan between the joint projects is on a modified strategy and a delayed timeline for several of their convergence project extended trough the end of 2011. Even musical theme that are delayed it is said that it will not negatively impact the SECs timeline. I think it is a good idea to have a longer flowing of time to implement these joint projects because it gives the stakeholders more time to express there input. 7.The PWC article identifies eleven (11) joint projects currently underw ay (i. e. , financial instruments, tax revenue recognition, leases, etc. ). Select trine of these joint projects to consider in depth. For the three projects you have selected -Financial Instruments- The issues with the financial instruments used to cause an inconsistent way of reporting value, revenue and other forms of financial informations that could misleading investors. The joint project it to wreak off these financial instruments together to make it easier to understand.To bring convergence there is a need for multiple vernal a more useful approaches like, recognizing losses earlier and recognizing credit impairments when not thought to collect. -Revenue recognition- Revenue recognition currently recognizes revenue when the customer signs into an keep backment and set the price of fulfillment as being a fixed value. The new joint project would require the recognition of a contract come after the contract is fulfilled and not be able to hap the value as fixed.Another im portant aspect of the proposal is to establish principles to promote comparability among similar contracts. -Leases- -Consolidation- Under the ne joint projects, many of the companies will still be able to consider certain investment companies under the U. S. GAAP are likely to continue to meet qualifications under the new definition, but some may not. The one major change will be defining if the come with has control over the investment company and how that will be determined. a. Provide a brief overview of the issue. b. Explain why it is important. c.Describe what needs to be done to bring about convergence. 8. The authors of the last article, capital of Minnesota Miller and Paul Bahnson, are not proponents of international uniformity of accounting standards. Identify three reasons they are against it (they provide more than three). Do you twin? -He believes that uniformity is not comparable, it kills innovation, and doesnt believe IFRS is uniformed. I do agree with him in some aspects because uniformity across a global market, while a very noble goal, is almost impossible to achieve and could turn up in so many problems.