Analysis Of The Financial Performance Of Chester Inc. Essay

Chester Inc. is a client of SNHU, LLC who prepares the financial statements and financial analysis for Chester Inc. This report will detail several key items including the accounting effects of international expansion as it relates to differences between Generally Accepted Accounting Principles (GAAP), the United States standards, and the International Financial Reporting Standards (IFRS), the standards that would govern a portion of the financial reporting with an international expansion. This report will also review the financial performance of Chester Inc. Additionally; it will use ratio analysis to compare Chester Inc. with two of its main competitors.

This report is designed to provide an evaluation of the financial fitness of Chester, Inc. through the creation and analysis of a full set of financial statements. Methods that will be used to analyze the income statement, balance sheet and statement of cash flows include: horizontal and vertical analysis, ratio analysis and comparison to competitors and the industry. All calculations used to create the financial statements and analyze them can be found in the appendix of this document. A list of differences between the presentation of these financials and International Financial Reporting Standards will also be included at the request of management. Results of this analysis shows that Chester, Inc. is performance is under industry averages in several areas, particularly in liquidity and profitability.

UK’s IFRSs are designed to make it easier to compare the performance of organizations in different countries, rather than each country maintaining its own GAAP, which makes such comparisons difficult. All listed EU companies have been required to use IFRSs since 2005. The adoption of IFRSs by the private sector is expected to have various benefits for both companies and investors; including (1) UK’s IFRSs will remove the need for companies with foreign subsidiaries to translate the accounts for consolidation with the parent company accounts. Also (2) it will be easier for investors to make informed decisions about the performance of companies in different countries because of the increased transparency and a better understanding of financial statements.

Due to the forecasted high demand in the future, Gobias Industires, Inc. plans to report the company’s financial statements as soon as the next year. However, the argument is whether the company should report its financial statements consistent with the US Generally Accepted Accounting Principles (US GAAP) or the International Financial Reporting Standards (IFRS), when IFRS may be the reporting standard for US companies in the near future. I suggest Gobias Industries start reporting financial statements under both US GAPP and IFRS because the company is a U.S. based potential global firm.

This research project will inform the reader of the difference between the United States accounting standards and International accounting standards. The United States uses the Financial Accounting Standards Board (FASB) to issue financial reporting procedures. The International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB). There are proposals for the United States to adopt the International standards. Financial reporting procedures are debated about the United States using the Generally Accepted Accounting Procedures (GAAP) or following the global procedures. This

With the growth of international business there is a need to standardize financial statements globally. Presently there are “approximately 120 foreign private issuers currently that report to the Commission using IFRS financial statements.” By standardizing accounting practices investors will be able to make informed decisions based on comparability and accuracy of financial statements. The SEC released this statement in 2008, “We believe that IFRS has the potential to best provide the common platform on which companies can report and investors can compare financial information.” The SEC has created a “Roadmap” or plan to convert US GAAP over to IFRS. According to The Committee of

There are several differences between the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (GAAP). The IFRS is considered more of a "principles based" accounting standard in contrast to U.S. GAAP which is considered more "rules based." By being more "principles based", IFRS, arguably, represents and captures the economics of a transaction better than U.S. GAAP. As a team me collaborated to answer the following seven questions.

This essay will critically evaluate the adoption of International Accounting Standards by UK companies. IAS (International Accounting Standards) created by IASC (International accounting standards committee) are a set of standards stating how particular types of transactions and other events should be reflected in financial statements. Since 2001 the IASB (International Accounting Standards Board) succeeded the IASC to create the IFRS (International Financial Reporting Standards) which are “a single set of accounting standards, developed and maintained by the International Accounting Standards Board (the Board) with the intention of those standards being capable of being applied on a globally consistent basis—by developed,

The country selected for this study is the United Kingdom (UK). UK Generally Accepted Accounting Practice (GAAP) has been in place for a long period of time and was harmonized in 2005 so as to comply with the international accounting standards. The UK embraced the principles of the International Financial Reporting Standards (IFRS) in 2005 after the European Union (EU) mandated that all members that were publicly listed companies be subject to reporting under the International Accounting Standards (IAS). This was to help facilitate that those listed companies could easily be compared to onr other on their performance and transparency was improved since they were now subject to the same principles of reporting. Companies in the United

There are several regulatory bodies, both national and international, that controls the accounting system of companies. The United States General Accepted Accounting Principles (GAAP) is a rules-based accounting body that provides guidelines on how US firms accounting systems should operate. On the other hand, International Financial Reporting Standards (IFRS) is principles-based international regulatory guidelines used internationally. Revenue recognition by the two bodies differ greatly making the (Shamrock, 2012)

The IFRS are superseding GAAP as the official reporting structure of many countries and as of July 2014, 283 have adopted the IASB’s new rule book (PricewaterhouseCoopers, 2014). The transition to IFRS has spawned a worldwide dialog of investors and analysts discussing the effects it will have on reporting and the implications this move carries into the future. This paper will review some financial reporting standards, the major distinctions between the U.S. GAAP and IFRS, and the competitive advantages and disadvantages of altering the U.S. reporting structure.

This paper provides detailed information about the aspect or revenue recognition as compared to the US Generally Accepted Accounting Principles and International Financial Reporting Standards as the standards that are used in accounting (Ammons 45). The diverse differences that exist when either of the standards is used can be clearly noted as the paper illustrated the major variations in applications. Financial statements made using the right standards and procedure such as US GAAP and IFRS usually provides relevant, understandable, comparable and reliable financial statements that show a true and fair financial position of a company to all the users of financial statements

The US Generally Accepted Accounting Principles (GAAP) is a set of international accounting rules which originated from the United States. US GAAP can be defined as a set of accounting principles, standards and procedures that companies use to compile their financial statements (Elliott & Elliott, 2008). The International Financial Reporting Standards (IFRS) on the other hand are accounting rules originating from the United Kingdom. International Financial Reporting Standards (IFRS) are a set of accounting rules designed with a common global language for business affairs so that financial accounts of companies are understandable and comparable across international boundaries (Devinney, Pedersen & Tihanyi, 2010).

The accounting world is shaped by stringent and clear rules, principles, standards and guidelines. These are all meant to define accounting operations and reporting discipline. With the emergence of International Accounting Standards (IAS), which was later replaced by International Financial Reporting Standards (IFRS), the accounting concepts, analysis, disclosures, reporting and presentation became easier and practical. Currently, accountants, managers and related parties find it concrete and consistent in protecting professional boundaries.

“International Financial Reporting Standards (IFRS) is a single set of accounting standards, developed and maintained by the IASB with the intention of those standards being capable of being applied on a globally consistent basis—by developed, emerging and developing economies—thus providing investors and other users of financial statements with the ability to compare the financial performance