决b畊楬-AdvancedAccountingbyDebraJeterand.ppt

Advanced Accounting by Debra Jeter and Paul Chaney Chapter 12: International Accounting and the Global Economy Increasing Interest in International Accounting Standards Divergence in Accounting Standards In some countries: Goodwill is not amortized until it is apparent it has diminished in value The pooling of interests method is not allowed LIFO inventory costing is not permitted Reserves are recorded for self-insurance or contingencies for expected future losses International Accounting Standards Committee (IASC) An independent private-sector body established in 1973 by the leading accountancy bodies of Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland, and the United States Issues International Accounting Standards (IAS) Earnings Differences among CountriesAn Illustration Accounting Models International Accounting IssuesConsolidation Methods U.S GAAP purchase and pooling allowed IAS purchase is required uniting of interests (similar to pooling) is allowed if firm sizes are similar International Accounting IssuesProperty, Plant and Equipment U.S GAAP recorded at historical cost carried on books at net book value IAS initial measurement is original cost revaluation to fair value is allowed International Accounting IssuesDepreciation U.S GAAP predominantly straight line method for financial purposes alternative methods for tax purposes IAS method applied on a systematic basis International Accounting IssuesResearch and Development U.S GAAP all RD costs are expensed IAS research costs are expensed development costs may be recognized as an intangible asset International Accounting IssuesGoodwill U.S GAAP capitalized and amortized for up to 40 years IAS capitalized and amortized for up to 5 years, (up to 20 years if justified) International Accounting IssuesInventories U.S GAAP LIFO and FIFO are primary methods IAS lower of cost or net realizable value is recommended FIFO and weighted avera