Essay about Week 3 Codification Exercise

1. The researchers found a significant difference between the two groups (control and treatment) for change in mobility of the women with osteoarthritis (OA) over 12 weeks with the results of F(1, 22) = 9.619, p = 0.005. Discuss each aspect of these results.

Comparing the performance of divisions operating in different countries is difficult due to legal, political, social, economic and currency differences. Additionally companies in different countries may adopt different accounting standards, which makes the financial statement not comparable. Calculation on ROI, RI and EVA for subunits that operate in different countries needs to be adjusted for differences in inflation and changes in the exchange rates.

Note: General Note The Status Section identifies changes to this Subtopic resulting from Accounting Standards Updates. The Section provides references to the affected Codification content and links to the related Accounting Standards Updates. Nonsubstantive changes for items such as editorial, link and similar corrections are included separately in Maintenance Updates.

In 1973 the Financial Accounting Standards Board (FASB) was established to set the financial accounting standards in the United States of America for nongovernmental entities. These standards are collectively called U.S. Generally accepted Accounting Principles, or U.S. GAAP. The Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants acknowledge the authority of these standards (FASB, n.d). A “proven, independent due process” is used to collect the viewpoints of the financial statements prepares and users for the constant improvement of these standards. An Accounting Status Update(ASU) is not an authoritative source however documents the amendments to communicate the changes in the FASB Codification for a user to understand the reason and future of those changes (FASB, n.d).

On the other hand, the peso devaluation will not have that much of a positive effect on Farmington (Antilles) N.V. as the peso depreciates relative to the USD. The result is the subsidiary being negatively impacted as the USD/peso exchange rate is rising, as they convert revenue earned in pesos to USD to deposit into U.S. bank accounts. This facility had almost 4 million MXN receivables at the end of the year. The 1994 average exchange rate is 3.5 MXN/USD, where these 4 million MXNs would equate to approximately 1.14 million USD. When the exchange rate values the devalued peso at 5.0 MXN/USD, these 4 million MXNs are only equal to 0.80 million USDs, showing a loss of more than 300,000 USDs. When the exchange rate changes from 4.0 to 5.0 MXN/USD, we can see the loss the company would experience, and thus the negative impact on this facility.

7. Whether the cash flows of foreign operation directly affect the cash flows of the reporting entity.

2. Log into the codification database and perform a search on the following terms and answer the related questions:

There are many reasons that our business in Mexico is exposed to agency problems. With our company being an MNC, it would be hard for our managers and top executives to keep track of what is going on in Mexico at our language school. Another agency problem is that our company could face is that our employees might not follow the standards and uniformity by which we in the US abide. These two agency problems could in turn have a negative impact on shareholder wealth.

Journal written by Robert G.Rulland from Northeastern University and Timothy S.Dauprik from Univesity of South Carolina discussed about the foreign currency translation and behaviour of exchange rate. Consequently, the first controversy is which translation method provides the most meaningful translation gains and losses, for example which method provides the most reasonable measure of the foreign entity's exposure to movements in exchange rates. The second controversy is whether translation gains and losses should be reported in the income statement or whether they should be deferred and shown in the stockholders' equity section of the balance sheet. Two major controversies exist in the translation of foreign currency financial statements is first which translation method should be used, and the second is how should the resulting translation gains and losses be reported. When items translated at current exchange rates, translation gains and losses result. Translation methods vary as, to which balance sheet items translated at current and which at historical exchange rates. This paper proposes two criteria for settling these questions which are based upon the actual pattern of exchange rates existing between the U.S. dollar and other currencies .It is argued that application of these criteria would result in a more objective and economically meaningful translation process than exists under current rules.

Historically ,it is seen that there are numerous number of disputes in the field of financial reporting among different professionals, regulators and theoretitions .most of these disputes are related to the valuation of financial reporting components.the current curve in the progress of valuation is the push for and against the fair value approach.the purpose of this research is to examine the arguments on the use of fair value accounting and to identify the issues related to implementation of fair value accounting standards. Further, the results of literature related to role of fair value accounting within financial crisis are also investigated.

Using various sources on the internet (such as Wikipedia and Google), look up and define the following terms. Upon completion, attach and return to my email address. Keep a copy for use as a study guide for the exam.

Multi-national organizations are constantly evolving with innovative ideas influenced to adhere to current trends. Aside from designing the next epic innovation, competition among multi-national organizations are intense and creates a drastic hype for investor and shareholders. Financial reporting for multi-national organizations can be compared to the intensity in creating its next profitable proposition as strict financial reporting rules and regulations are constantly developing requiring the expertise of highly skilled professionals. Samsung Electronics and Apple Inc. are two organizations that have set an international example of innovative ideas and the viability of cross border investments. Samsung Electronics and Apple Inc. abide by distinct reporting standards, resulting in incomparable financial statements unless it is reconciled to the conforming reporting standards and differences in financial statement presentations.

In this report, it firstly will attempts to examine the external and culture influences on the annual financial reporting. After that, the

Along with the responsibility of stablishing financial accounting and reporting standards for private and public companies that follow U.S Generally Accepted Accounting Principles (GAAP), the Financial Accounting Standard Board (FASB) is the organization in charge of issuing Accounting Standards Update (ASU) in order to communicate changes to the FASB Codification. Accounting Standards Updates explain how and why FASB has changed U.S GAAP and include background information related to the change. One example of these updates is the Accounting Standards Update issued on July 2015, ASU 2015-11- Inventory (Topic 330): Simplifying the Measurement of Inventory, which communicates a change in the way inventory is measured in order to simplify the process. This ASU states the main provisions of the update and the reasons why the FASB issued this update. It also illustrates how the update is different from previous standards and the expected benefits of this update for financial statements preparers. Moreover, the update explains why the LIFO and retail inventory methods are excluded from the update, and it makes people think about how this update could affect earnings quality of income from continuing operations and bottom line net income.

With the idea of increased globalization, and many companies operating as entities in multiple countries, there seems to be an increase in need for the translation of foreign currency in reporting currency so that financial statements can be prepared. Translation of foreign currency is when the amount is simply stated in certain terms without physically changing the currency (Wild & Wild, 2012). There is an issue with this however; the exchange rate for the currency of each nation is not set because it varies continuously within the foreign exchange market. There are two issues that the should be addressed. This involves the translation of transactions, and the translation of financial statements. The translation of transactions happen when a company has operations, or conducts business in a currency different than the reporting currency (Rowan, 2011). As the transaction is logged at the date it is created, it is certain that the historic rate is used, which is in line with the principles of historic cost accounting (Wild & Wild, 2012). Accordingly, non-monetary assets must be re-valued following normal accounting practices. Monetary assets can be translated either by the historical rate, where there is no gain or loss from currency translation, or the closing rate, where any differences between the closing rate and the historical rate are conveyed to the profit and loss account (Doupnik and Perera, 2012). The need for the translation of financial statements occurs when a