Below is an essay on "Accounting Principles" from Anti Essays, your source for research papers, essays, and term paper examples.
Accounting Reporting Criteria
Requirements in accounting reporting criteria not only differ between countries but also for companies who do business within the borders of the United States. On June 20, 2007 federal regulators agreed to ease the accounting requirements of foreign companies who trade on the United States exchanges. The action of the Security and Exchange Commission will allow public companies to choose between international and U.S. accounting standards. Foreign companies will be able to use the English version of the International Financial Reporting Standards when preparing data for the agency and no longer be required to use the GAAP. The Security and Exchange Commission has earmarked 2009 as the year in which foreign companies will no longer reconcile statements by U.S. GAAP (The Associated Press, 2007). These steps will bring the United States closer to adopting international reporting standards.
Team D will compare and contrast the current accounting reporting criteria of U.S. companies with those of foreign companies and answer the questions as to advantages of moving to international reporting standards.
Foreign Accounting Reporting Criteria
Global accounting standards are an important aspect of today’s financial world, especially with the SEC’s announcement of a roadmap from GAAP to IFRS standards. The biggest difference between GAAP and IFRS is that GAAP is rules based and IFRS is principles based. “Simply stated, this means there are fewer requirements to learn…there will be more pressure on CPAs to use their judgment, which creates more risk” (Bodine, 2009). IFRS standards do not mandate a specific format for the balance sheet and income statement and requirements for foreign currency to be declared at the exchange rate. Under IFRS, LIFO (last in, first out) is not permitted; however, it does permit reverse inventory write-downs and requires recognition of development costs. Under IFRS rules, pre-operating expenses and...