International Accounting Standard 16

Entity-wide disclosures are required under Accounting Standards Codification (ASC) 280-10-50-40 through 280-10-50-42. The disclosures are required because every corporation does not report information in a similar fashion, and the disclosures would provide comparability of the financial statements among entities. For example, if a corporation uses a geographic approach in its financial statements, disclosing certain information about the products or services sold will make comparability to other companies much easier. The disclosures will also help with comparability within an entity if they decide to choose another method of reporting operating segments in the future. There are three types of entity-wide disclosures; products and services, geographic areas, and/or major customers. Every public company has to comply with the disclosures, even if the company has one reportable segment. The only exception to the entity-wide disclosures is if it is impractical to provide the information, such as it would be extremely costly to the corporation, or if the “internal reporting systems are not capable of gathering financial information by product or service by geographic area.” A disclosure should be made when entity-wide disclosures are impractical.

Inventories, is similar to the US GAAP definition under Accounting Standards Codification, ASC 330. According to Ernst & Young (2013) article, they are both based on the principle that the primary basis of accounting for inventory is cost. Both define inventory as assets held for sale in the ordinary course of business, in the process of production for such sale or to be consumed in the production of goods or services (pg.71). This which lead to the entries above. Under U.S. GAAP, the company reports inventory on the balance sheet at the lower of expense or market, where business sector is characterized as replacement cost of$180,000, with net realizable value of $190,000 and net realizable value less a normal profit of $152,000. In this case, stock was composed down to replacement cost and provided details regarding the December 31, 2014 asset report at $180,000. A $70,000 loss was incorporated into 2014 income. The company would report inventory on the balance sheet at the lower of cost $250,000 as historical cost and net realizable value as $190,000. Inventory would have been accounted for on the December 31, 2014 asset report a net realizable estimation of $190,000 and a loss on write-down of inventory of $60,000 (the historical cost subtracted from net realizable expense) would have been reflected in net income. IFRS income would be $10,000 bigger than U.S. GAAP net pay. IFRS held earnings would bigger by the same amount.

The Financial Accounting Standards Board (FASB) writes the code that directs certified public accountants and accounting professionals in non-governmental environments. On occasions, the FASB proposes changes to those accounting standards. This process includes exposure drafts. The issuance of exposure drafts is for individual and business comments. The input from the respondents in comment letters is analyzed and considered by the board in the deliberations regarding the issue. "Proposed Accounting Standards Update – Presentation of Financial Statements (Topic 205): Reporting Discontinued Operations," published on April 2, 2013, discusses changing the reports to be more useful and reduce costs for preparers. This report will discuss the exposure draft in depth and the comment letters accordingly.

Accounting Standard AASB 116: Property Plant and Equipment (Australian Accounting Standards Board) states, expenditure is entered into the comprehensive income statement only when the given conditions are met.

Property, plant and equipment is at first measured at its cost, therefore measured either utilizing a cost or revaluation demonstrate, and devalued so that its depreciable sum is dispensed on an orderly premise over its valuable life. IAS 16 was reissued in December 2003 and applies to annual periods beginning on or after 1 January 2005. (IAS 16)

The standards by which financial statements are reported are known as Generally Accepted Accounting Principles (GAAP) (Finkler, Jones, & Kovner, 2013).  The United States (US) recognizes GAAP to be a set of rules used by accountants in financial reporting (Finkler et al., 2013).  The United States-GAAP (US-GAAP) were established by the Financial Accounting Standards Board (FASB) (Finkler et al., 2013). The US-GAAP are primarily used in the US whereas many other countries have adopted their own general accounting standards known as the International Financial Reporting Standards (IFRS) (Finkler, Ward, & Calabrese, 2013). The IFRS were established by the International Accounting Standards Board (IASB) and have both similarities and differences to the US-GAAP (Finkler et al., 2013).   The purpose of GAAP are to standardize the manner in which the financial status of an organization is interpreted so financial information is useful for investors, lenders and those that an organization is accountable to or compared to (Finkler et al., 2013).

For many years now, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have been developing new standards in relation to the sales and purchases of leases. The joint effort of the two has finally come to an end, with the new standards being issued out on February 25, 2016. These new standards will come into effect starting in 2019. It is important that our diversified company begins preparing for the major implications of these new standards and fully understand what we are dealing with. The Accounting Standards Update No. 2016-02, Leases (Topic 842) will have an immediate effect on our company because is involved in many lease-related transactions as not only a lessee, but as well as a lessor. In this memo, we will be analyzing the changes Topic 842 from the perspective of the lessee and the lessor. The lessee is the company receiving the asset or property from the contract while the lessor is the one providing the asset or property. Finally, there will be an examination of the direct impact this will have on our income statement, balance sheet, and statement of cash flows. First, we will be taking a look at the changes Topic 842 makes from the original lease standards.

Investing in today’s rapidly emerging markets, one must be aware of the world’s two main accounting systems. The International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) are two essential accounting systems of the globe. Although several countries like the United States have their own accounting systems, most conform to one main one. The Security and Exchange Commission is looking to shift to the IFRS by the end of 2015. The GAAP and IFRS are primary accounting systems which share several aspects in common however they also differ in several ways which may impact the results.

The (IASB) International Accounting Standards Board published International Financial Reporting Standard 8 (IFRS 8) Operating Segments on 30 November 2006. The standard superseded IAS 14 Segment Reporting, which was applicable pursuant to Regulation 1606/2002/EC (IAS Regulation).

The International Financial Reporting Standards (IFRS) has been adopted by a majority of first world countries and emerging markets. However, the U.S. still uses the U.S. Generally Accepted Accounting Principles (U.S. GAAP). The 2008 financial crisis and the cost of implication halted the adoption, but there are other obstacles and implications to take into consideration. One important aspect to consider is the tax implications upon adoption, and this typically translates into how the taxes paid will be affected. The implications to tax arise due to the differences in aspects such as revenue recognition, transfer pricing agreements, compensation, strategies in repatriation, debt agreements, and so on. Specifically focusing on the effective tax rate, the income tax, differences in accounting for assets and liabilities, and income and expenses. Included in this paper will be a short explanation on preparing the accounting profession and accounting systems for IFRS adoption, and other tax implications effects to the accounting world.

The International Financial Reporting Standards (IFRS) identified the five ele-ments of financial statements as the following: (1) assets, (2) liabilities, (3) capi-tal, (4) income, and (5) expenses.

Since 1973, the International Accounting Standard Committee, now known as the IASB, has been focused on developing a single set of high-quality international accounting standards as an effort to make financial information and financial disclosure more understandable to users around the globe. As the business world became more global, regulators, investors, large companies and auditing firms began to realize the importance of having common standards in all areas of the financial reporting chain (AICPA, IFRS, 2011). As of August 2014, the list of countries that have adopted international accounting standards, or local variants of them, has increased to 173 countries, with six more (U.S., Japan, India, Malaysia, Colombia, and Russia) currently considering adopting IFRS (www.iasplus.com, 2014).

The International Financial Reporting Standards Foundation (IFRS) and the International Accounting Standards Board (IASB) replaced the International Accounting Standards (IAS) and the International Accounting Standards Committee (IASC) in 2001. “The IFRS Foundation is the legal entity under which the IASB operates.” The objectives of the IFRS are to develop and enforce high-quality global financial reporting standards for all users of financial information. These objectives consider the requirements of a range of companies of varying categories and sizes with “diverse economic settings.” They encourage the acceptance of IFRSs by the IASB through the unification of “national accounting standards and IFRSs (Deloitte Global Services

Bookkeeping Standards are utilized as administrative systems for planning of budgetary reports in very nearly all the nations of the world. Bookkeeping Standard are composed approach archives issued by master bookkeeping body or government or other administrative body covering the parts of distinguishment, estimation, treatment, presentation & divulgence of bookkeeping exchange in the monetary proclamation. Goal of bookkeeping standard is to institutionalize the differing bookkeeping approaches & rehearses with a perspective to take out to the degree the non-similarity of money related articulations & include the dependability to the monetary proclamations.

* But still the harmonization process has a long way to go. Many standard setting bodies and regulators of different nations are ardent protectors of their local standards; they are in no mood to allow their job being taken over by a foreign entity.