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1
Fisher, Steven A. "Measuring The Evolution Of Generally Accepted Accounting Principles." Journal of Applied Business Research (JABR) 14, no. 3 (August 31, 2011): 105. http://dx.doi.org/10.19030/jabr.v14i3.5708.
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<span>Generally Accepted Accounting Principles (GAAP) guide financial reporting. Although numerous opinions and standards have been issued over the past 45 years, there is little quantitative evidence concerning the degree of change in GAAP. The purpose of this study is to generate a quantitative understanding of the degree of evolution in GAAP since Accounting Research Bulletin (ARB) 43. The results indicate that significant changes are occurring in GAAP. Less than 50% of the GAPP issued in the 1950s and in the 1960s remains in effect today. Furthermore, significant changes have occurred in GAAP issued within just the past 20 years. The primary implication is that GAPP is continually being reviewed and revised in response to investors and creditors changing information needs.</span>
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Schneider, Douglas K., Gordon S. May, and David R. Shaffer. "On Narrowing The Credibility GAAP: Has The Financial Accounting Standards Board (FASB) Enhanced The Credibility Of Generally Accepted Accounting Principles (GAAP)?" Journal of Applied Business Research (JABR) 9, no. 2 (October 2, 2011): 76. http://dx.doi.org/10.19030/jabr.v9i2.6079.
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The purpose of this study was to apply social-psychological research methods to address an issue of widespread concern in the accounting profession. One of the primary motives underlying the creation of the Financial Accounting Standards Board (FASB) was to increase the credibility of Generally Accepted Accounting Principles (GAAP). Our main objective was to assess any differences in the perceived credibility of FASB GAAP and pre-FASB GAAP, as indicated by three groups of FASB constituents familiar with these procedures: corporate preparers of financial statements (preparers), CPAs who audit financial reports to ensure their adherence to GAAP (auditors), and accountants who use financial reports to make lending and investment decisions (users). The results indicated that (a) the credibility of accounting principles can be assessed, (b) not all dimensions that have been touted as contributors to the credibility of accounting practices predict accountants perceptions of credibility, and (c) examples of FASB GAAP were perceived as less credible than corresponding examples of pre-FASB GAAP by each of the above three groups of FASB constituents. Some implications of these results and suggestions for future research are discussed.
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Tsuji, Mineo, and Mitsuki Hiraiwa. "An Analysis of the Internal Consistency of the New Accounting Standard for Virtual Currencies in Generally Accepted Japanese Accounting Principles." International Journal of Systems and Service-Oriented Engineering 8, no. 2 (April 2018): 30–40. http://dx.doi.org/10.4018/ijssoe.2018040103.
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While there is no specific guidance in IFRS or US GAAP on accounting for virtual currencies, the ASBJ issued the PITF on the Accounting for Virtual Currencies under the PSA on March 14, 2018 as part of J-GAAP. The standard subscribes that, if an active market exists for the virtual currency, such a virtual currency should be measured using the market price at the balance sheet date, and any difference between the carrying amount should be recognized as a gain or loss. This article examines logically the internal consistency of the accounting information of virtual currencies subscribed by the standard in J-GAAP and between the standard and IFRS. The results indicated that it is appropriate to present virtual currencies at the recoverable amount as in the case of other monetary assets in J-GAAP and that there are no significant differences internationally between the standard and the IFRS.
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Noe, Kelly. "We Are Not Publicly Traded And So The Rules Dont Apply Or Do They Should They?" Journal of Business Case Studies (JBCS) 8, no. 1 (December 22, 2011): 103–6. http://dx.doi.org/10.19030/jbcs.v8i1.6743.
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This paper presents a case study of the accounting practices of a company that is privately held. The company follows Generally Accepted Accounting Principles (GAAP) but has some questionable transactions. The paper then follows up with a discussion of baby-GAAP and possible consequences of two different GAAP options.
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Jamal, Karim, Robert Bloomfield, Theodore E. Christensen, Robert H. Colson, Stephen Moehrle, James Ohlson, Stephen Penman, Thomas Stober, Shyam Sunder, and Ross L. Watts. "A Perspective on the Canadian Accounting Standards Board Exposure Draft on Generally Accepted Accounting Principles for Private Enterprises." Accounting Horizons 24, no. 1 (March 1, 2010): 129–37. http://dx.doi.org/10.2308/acch.2010.24.1.129.
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SYNOPSIS: The Canadian Accounting Standards Board (hereafter, AcSB) recently issued an exposure draft to adopt separate GAAP for private enterprises. This new GAAP is justified as being consistent with the current FASB/IASB conceptual framework, but is sensitive to the different cost-benefit considerations facing private entities. We view this proposal as being innovative and responsive to the differential reporting needs of private entities. In this article we explain our reasoning and conclusions on several issues raised by the exposure draft starting with a discussion about the need for a separate conceptual framework for private enterprises. We sketch a preliminary conceptual framework that could be used to develop and justify the type of changes proposed in this exposure draft. We then discuss key issues raised in the exposure draft such as reliance on historical cost as the key basis of measurement, the significant reduction in disclosure requirements for private enterprises, and stopping the emerging issues committee from providing implementation guidance (no EICs). We also comment on the mechanism for financing the standard-setting board, the need to ensure compatibility between accounting and auditing standards, and a process for adjusting the education system to support this new private enterprise GAAP.
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Holovina, Daria, Olga Karpenko, and Iryna Plikus. "INTERNATIONAL CONVERGENCE OF FINANCIAL REPORTING." 63, no. 63 (July 10, 2022): 83–93. http://dx.doi.org/10.26565/2524-2547-2022-63-08.
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The purpose of this article is to study the state of global convergence of financial reporting standards at the present stage, as well as to consider the key points of the process of unification of International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP). To achieve this goal, the article considers the concepts of convergence, harmonization and standardization, presents an analysis of the intensity of use of these concepts, which are associated with the dynamic development of recent global accounting transformations and major trends in international convergence of financial reporting. The key stages of the process of unification of International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP) are considered. For decades, the European Union, the International Organization of Securities Commissions (IOSCO) and the Committee on International Accounting Standards have supported international efforts to harmonize US GAAP and IFRS. accounting and reporting standards used in different countries. We have determined that while both IFRS and GAAP aim to provide transparency, informational content and usability in financial statements, these standards use different approaches to achieve this. We indicated that at present IFRS is the dominant accounting and reporting system, in fact, only third world countries do not apply it. We have proven that in the process of achieving convergence, a single set of understandable and feasible international accounting standards must be developed, requiring high quality, transparent and comparable information in financial statements in order to ensure convergence of IFRS and GAAP. We analyzed the intensity of the use of the concepts of IFRS and GAAP, which are associated precisely with the convergence of these accounting systems using the Google Ngram Viewer (GNV) tool. We have proved that the Convergence of IFRS and GAAP also applies to Ukraine, since the convergence is bilateral, any change in IFRS will ultimately affect the Ukrainian accounting and reporting system.
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Henry, Elaine, and Ya-Wen Yang. "Making the Right Comparisons: Novartis AG." Issues in Accounting Education 22, no. 4 (November 1, 2007): 721–33. http://dx.doi.org/10.2308/iace.2007.22.4.721.
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This case introduces the concept of convergence between International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Principles (GAAP). The scenario involves a securities analyst's evaluation of Novartis AG's financial performance under IFRS and U.S. GAAP, and provides an opportunity to examine the issues giving rise to differences under the two sets of standards. Based on the company's 20-F disclosure, the case uses the reconciliation footnotes to recast the company's IFRS financial statements to U.S. GAAP. The analytical skill of adjusting financial statements is useful beyond the IFRS-to-U.S. GAAP context.
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Harris, Peter, and Liz Washington Arnold. "US GAAP Conversion To IFRS: A Case Study Of The Balance Sheet." Journal of Business Case Studies (JBCS) 9, no. 2 (February 21, 2013): 133–40. http://dx.doi.org/10.19030/jbcs.v9i2.7699.
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International Reporting Standards (IFRS) has become the required framework for most of the world financial market economies. In the United States, US Generally Accepted Accounting Principles (GAAP) is still required. However, plans are presently in place by the SEC to abandon US GAAP and to adhere to IFRS requirements by as early as the period ending December 31, 2014. This case study requires the student to transform a US GAAP presented Balance Sheet to IFRS and is most suitable for an Intermediary Accounting 11 and a Financial Analysis class at the graduate level.
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Yallapragada, RamMohan R. "Incorporating International Financial Reporting Standards Into The United States Financial Reporting System: Timeline And Implications." International Business & Economics Research Journal (IBER) 11, no. 3 (February 15, 2012): 283. http://dx.doi.org/10.19030/iber.v11i3.6860.
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In the United States of America (US), all the accounting procedures and guidelines for measurement and reporting by business firms are governed by a body of principles and concepts known as Generally Accepted Accounting Principles (GAAP). These GAAP are presently issued by the Financial Accounting Standards Board (FASB) with the authority delegated by the Securities and Exchange Commission (SEC). Historically, each country developed its own GAAP and there was no uniformity among the GAAPs of different countries. Comparison of financial statements issued by business firms from different countries has become impossible leading toward suboptimal capital allocation across countries in the world. Gradually, with the advent of multinational corporations, there emerged a global demand for convergence of GAAP of different countries into a single set uniform accounting standards applicable to all countries. Initiative for uniform global accounting standards came from International Accounting Standards Committee (IASC) which was established in 1973. The IASC formed International Accounting Standards Board (IASB) in 2001 which began issuing International Financial Accounting Standards (IFRS). Till now about 100 countries have adopted IFRS for their financial reporting purposes. The SEC has yielded to the global pressure to adopt IFRS in the US. SEC has set a timeline for US business firms to change over from US GAAP to IFRS. This paper presents the background and development of the movement of IFRS, timeline for the change in US and the implications involved in the adoption of IFRS in the US.
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Jo, Koren M., and Shuo Yang. "SEC Comment Letters on Firms' Use of Non-GAAP Measures: The Determinants and Firms' Responses." Accounting Horizons 34, no. 2 (December 6, 2019): 167–84. http://dx.doi.org/10.2308/horizons-16-134.
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SYNOPSIS This paper explores Securities and Exchange Commission comment letters that address firms' use of non-Generally Accepted Accounting Principles (GAAP) measures in 10-Ks, 10-Qs, and earnings releases. We investigate the determinants of firms' receiving non-GAAP comments and the revisions to non-GAAP reporting undertaken by these recipients. Firms that experience poor GAAP performance and emphasize non-GAAP measures are more likely to receive non-GAAP comments. Recipients of non-GAAP comments are more likely than other reviewed firms to abandon non-GAAP measures in future filings. When recipients of non-GAAP comments continue to report non-GAAP measures, they provide more justifications for the use and reduce the prominence of these measures. However, higher non-GAAP earnings and GAAP earnings differentials do not appear to attract non-GAAP comments. In addition, the amount of non-GAAP exclusions does not decrease after the receipt of non-GAAP comments. Overall, our findings suggest that non-GAAP comments are effective in deemphasizing non-GAAP measures. JEL Classifications: M41, M48.
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Khumawala, Saleha, Justin Marlowe, and Daniel Gordon Neely. "Accounting professionalism and local government gaap adoption: A national study." Journal of Public Budgeting, Accounting & Financial Management 26, no. 2 (March 1, 2014): 292–312. http://dx.doi.org/10.1108/jpbafm-26-02-2014-b003.
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We examine the factors that associate with local government decisions to comply with Generally Accepted Accounting Principles (GAAP). GAAP non-compliance is surprisingly common among larger local governments, and that trend has important implications for public policy, financial management transparency, and government accountability. To examine the factors that drive GAAP compliance, we develop a conceptual framework based on the politico-economic perspective on accounting policy choice, and then test that model with data from a national survey of local government finance professionals. Our key contribution is that we incorporate accounting professionalism. The findings suggest that for many local governments the decision to adopt GAAP is a response to the pressures of professionalism rather than a rational response to political and economic motives.
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Penner, James, Jerry Kreuze, and Sheldon Langsam. "Long-Lived Asset Impairments in the Shipping Industry and the Impact on Financial Statement Ratios: Comparing U.S. GAAP and IFRS Standards." International Journal of Accounting and Financial Reporting 3, no. 2 (October 11, 2013): 76. http://dx.doi.org/10.5296/ijafr.v3i2.4226.
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In this paper, we investigate asset impairment standards particularly as they relate to differences between United States generally accepted accounting principles (US GAAP) and international financial reporting standards (IFRS) for the impairment of long-lived assets in the shipping industry and the corresponding impact on financial statement analysis ratios. Our study provides evidence that return on assets and asset turnover ratios diverge significantly as a result of the difference between US GAAP and IFRS on asset impairments within the shipping industry. Reporting differences between US GAAP and IFRS can impede the comparability of financial reporting. Asset impairment accounting differences can have significant differences for companies reporting under these two accounting standards.
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Rinke, Dolores. "Case Study: Differences Between US And International Financial Statements." Journal of Business Case Studies (JBCS) 7, no. 5 (August 10, 2011): 101–2. http://dx.doi.org/10.19030/jbcs.v7i5.5608.
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This case examines the differences in format and terminology in financial statements between US Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). Students download the financial statements of two different companies in the same industry; i.e., Nokia (reporting under IFRS) and Motorola (reporting under US GAAP). Questions related to the differences in format and terminology are addressed.
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Gray, Dahli, and Clemense Ehoff Jr. "Lower Of Cost Or Market Inventory Valuation: IFRS Versus US GAAP." Journal of Business & Economics Research (JBER) 12, no. 1 (December 31, 2013): 19. http://dx.doi.org/10.19030/jber.v12i1.8372.
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The lower of cost versus market (LCM) controversy regarding inventory cost measurement is presented. The differences between International Financial Reporting Standards (IFRS) and United States (US) Generally Accepted Accounting Principles (GAAP) are analytically compared. The link between US federal tax law and US GAAP is emphasized relative to a discussion of deferred taxes and potential US federal income tax revenue.
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Harris, Peter, and Liz Washington Arnold. "US GAAP Conversion To IFRS: A Case Study Of The Income Statement." Journal of Business Case Studies (JBCS) 8, no. 4 (June 27, 2012): 409–16. http://dx.doi.org/10.19030/jbcs.v8i4.7034.
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International Reporting Standards (IFRS) has become the required framework for most of the world financial market economies as of January 1, 2011. In the United States, US Generally Accepted Accounting Principles (GAAP) is still required. However, plans are presently in place by the SEC to abandon US GAAP and to adhere to IFRS requirements by as early as for the period ending December 31, 2014. This case study requires the student to transform a US GAAP presented Income Statement to IFRS. This case study is most suitable for an Intermediary Accounting or a Financial Analysis class at the graduate level.
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Cahan, Steven F. "Disclosure Practices In The Savings And Loan Industry: A Test Of The Signaling Hypothesis." Journal of Applied Business Research (JABR) 7, no. 4 (October 18, 2011): 19. http://dx.doi.org/10.19030/jabr.v7i4.6199.
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Savings and loan institutions (S&Ls) have been able to use specialized regulatory accounting practices (RAP) which typically are more liberal than generally accepted accounting principles (GAAP). This paper examines whether differences exist between S&Ls which disclosed a reconciliation of their RAP and GAAP net worths and S&L which did not. It is predicted that the financially strongest S&Ls would be most likely to disclose this information. Reported results support this signaling hypothesis.
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Wright, Gail B., Daniel Fernandez, Jeremy Burns, Ryan Hawkins, Christina Hornsby, and Sunny Patel. "Big GAAP/Little GAAP: Will The Debate Ever End?" Journal of Business & Economics Research (JBER) 10, no. 5 (April 30, 2012): 291. http://dx.doi.org/10.19030/jber.v10i5.6981.
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There has been an ongoing debate for decades, especially since the inception of the Financial Accounting Standards Board (FASB), over the appropriate application of generally accepted accounting principles (GAAP) to private companies. This so-called Big GAAP vs. Little GAAP debate has now come to a crisis point. The Financial Accounting Foundation (FAF) has taken a position that is contrary to the recommendations of the Blue Ribbon Panel on Standard Setting for Private Companies (the Panel) presented in January 2011, despite having been represented on the Panel. The American Institute of Certified Public Accountants (AICPA), also represented on the Panel, has responded by taking a strong stand in favor of the Panels position and against the new FAF recommendation and Invitation to Comment, published on October 4, 2011. Additionally, the International Accounting Standards Board has developed a set of reporting standards for small and medium size enterprises (IFRS for SMEs) that has not been recognized in the US. In this paper, we examine the history of the Big GAAP/Little GAAP debate in the US and internationally. We find substantial support for reducing requirements of private companies and recommend that International Financial Reporting Standards for Small to Medium-Sized Enterprises (IFRS for SMEs) be used for public companies of all sizes to be consistent with standards that have been accepted globally.
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Vergoossen, Ruud, and Frans Van Der Wel. "Wereldstandaard financiële verslaggeving: IFRS of US GAAP?" Maandblad Voor Accountancy en Bedrijfseconomie 76, no. 12 (December 1, 2002): 565–73. http://dx.doi.org/10.5117/mab.76.13793.
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De roep om een wereldstandaard voor de financiële verslaggeving is groot. De Europese Unie heeft gekozen voor de International Financial Reporting Standards (IFRS) die in 2005 worden ingevoerd, terwijl de Verenigde Staten blijven vasthouden aan de United States Generally Accepted Accounting Principles (US GAAP). Dit artikel gaat in op de implementatie van de IFRS in de Europese Unie en de obstakels die een consistente interpretatie en toepassing van de IFRS in de weg kunnen staan. Daarna worden de IFRS vergeleken met de US GAAP en komt de positie van de IFRS in de Verenigde Staten aan de orde. In een korte slotbeschouwing wordt een drietal scenario’s geschetst om te komen tot een wereldstandaard. Het scenario waarbij de IFRS en de US GAAP naar elkaar toegroeien, lijkt, gegeven de omstandigheden, het meest realistisch en wenselijk (convergentiestrategie).
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Dovbush, Vita, and Roman Kozhushko. "PROSPECTIVE DIRECTIONS OF CHANGES IN THE FINANCIAL REPORTING OF ENTERPRISES IN THE CONTEXT OF THE GLOBALIZATION OF THE WORLD ECONOMY." Management 32, no. 2 (April 16, 2021): 25–40. http://dx.doi.org/10.30857/2415-3206.2020.2.2.
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Statement of the problem and tasks. Ukraine is a country with transitive economy characterized by creation and development of market institutions aimed at privatization of state property, deregulation and liberalization of economic relations. Transformation of economy of Ukraine requires from enterprises the application of management concepts, focused on the new conditions of economic management – uncertainty and crisis nature of market environment. The effectiveness of the implementation of new principles of management depends on the completeness and reliability of the information and analytical support of management decisions.Methods. The study used: a dialectical method, system analysis – for detailing and decomposition of the object of research into separate important constituent elements; synthesis – to summarize the various aspects of the financial statements of the enterprise.Results. The technical issues of accounting were investigated: the key differences in approaches to enterprise accounting between the International Financial Reporting Standards (IFRS), Generally Accepted Accounting Principles (US GAAP) and the Regulations (Standards) of Accounting (NARS) were determined; the impact of the identified differences on the data processing in the accounting systems was assessed. It is determined that governmental accounting rules in the United States are governed by its generally accepted GAAP accounting principles. It has been proven that conceptually, IFRS, which is used by states around the world, is more "principled" than GAAP, making it somewhat less complex and consistent, offering fewer exceptions and unique applications.Conclusions. The current trend in financial reporting is to produce integrated reports that combine financial and non-financial information. However, not all companies find it necessary to disclose more information than the amount required of them by regulators. Therefore, there is a need to standardize not only financial information, but also non-financial indicators and the very structure of an integrated report.
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Otrusinová, Milana, and Eva Hýblová. "International harmonization of accounting demands a new approach to accounting education." Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis 61, no. 2 (2013): 427–35. http://dx.doi.org/10.11118/actaun201361020427.
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Accounting and financial reporting are valuable sources of information about the financial position and performance of a company. The development of the international capital market have brought needs for international, globally valid and acknowledged accounting norms. Currently, the IFRS are used in agreement with the European Commission directive for the elaboration of financial statements of companies which are issued by securities; the other entities continue using national generally accepted accounting principles (GAAP). As the number of companies which apply the GAAP is predominant, the basis of the education of future accounting professionals is formed. However, this situation has to be changed because of the potential expansion of harmonization into a further group of companies (small and medium sized entities) and also because of the increasing international cooperation among companies. Accountants should gain knowledge about all concepts of accounting – specialization narrowed down to national GAAP is limiting, as has been confirmed by recruitment agencies. The aim of the paper is to analyse the needs of accounting education in the current situation in compliance with the development trends of this field.
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Bae, Kee-Hong, Hongping Tan, and Michael Welker. "International GAAP Differences: The Impact on Foreign Analysts." Accounting Review 83, no. 3 (May 1, 2008): 593–628. http://dx.doi.org/10.2308/accr.2008.83.3.593.
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This paper investigates the relation between differences in accounting standards across countries and foreign analyst following and forecast accuracy. We develop two measures of differences in generally accepted accounting principles (GAAP) for 1,176 country-pairs. We then examine the impact of these measures of accounting differences on foreign analysts. In so doing, we utilize a unique database that identifies the location of financial analysts around the world, creating a sample that covers 6,888 foreign analysts making a total of 43,968 forecasts for 6,169 firms from 49 countries during 1998–2004. We find that the extent to which GAAP differs between two countries is negatively related to both foreign analyst following and forecast accuracy. Our results suggest that GAAP differences are associated with economic costs for financial analysts.
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Hazima, Hazima, Rosmida Rosmida, and Wan Junita Raflah. "ANALISIS PENERAPAN AKUNTANSI PADA USAHA EKONOMI DESA SIMPAN PINJAM (UED-SP) PERMAI DESA SUNGAI CINGAM KECAMATAN RUPAT KABUPATEN BENGKALIS." Inovbiz: Jurnal Inovasi Bisnis 4, no. 1 (June 1, 2016): 20. http://dx.doi.org/10.35314/inovbiz.v4i1.32.
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Abstract: This research was conducted in UED-SP Permai Sungai Cingam Rupat, District of Bengkalis. The purpose of this study was to determine whether the accounting has been applied in UED-SP Permai Sungai Cingam Rupat, District of Bengkalis in accordance with the Generally Accepted Accounting Principles (GAAP). Data of study consisted of primary and secondary data. Based on the research and discussion conducted found some problems such as is not classify assets into current assets and fixed assets, does not classify debts into long-term debt and short-term debt and in calculating the inventory usage is not in accordance with the service life should be. In the process of implementation of the financial statements UED-SP Permai Sungai Cingam Rupat, District of Bengkalis is not follow all the Accounting Cycle, UED-SP Permai is not present Statement of Changes in Equity, Statement of Cash Flow, and Notes to Financial Statements. The results of research conducted on Usaha Ekonomi Desa-Simpan Pinjam (UED-SP) Permai can be concluded that the accounting is not applied on the whole in accordance with the Generally Accepted Accounting Principles (GAAP). Keywords: Financial Statements, UED-SP Sungai Cingam
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Williams, L. K., Richard C. Chen, and Michael G. Tearney. "Bankers Perceptions Of Accounting Principles: Some Implications For The Small Business." Journal of Applied Business Research (JABR) 7, no. 4 (October 18, 2011): 108. http://dx.doi.org/10.19030/jabr.v7i4.6212.
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This study examines perceptions of bankers regarding the usefulness of generally accepted accounting principles for small businesses financial statements. Perceptions were obtained regarding four accounting standards that have been criticized as being unnecessarily costly for smaller businesses. Although results were somewhat mixed, support was given to prior research that has suggested bankers would accept financial information prepared from a less costly non-GAAP basis for some small businesses.
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Haverty, John L. "China Eastern Airlines: People's Republic of China Accounting Standards, International Financial Reporting Standards, or U.S. Generally Accepted Accounting Principles?" Issues in Accounting Education 22, no. 4 (November 1, 2007): 685–708. http://dx.doi.org/10.2308/iace.2007.22.4.685.
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China Eastern Airlines, headquartered in the People's Republic of China, has been listed and traded on the New York Stock Exchange since 1997. In its 2005 annual report, China Eastern Airlines presents two sets of financial statements: one prepared under People's Republic of China accounting regulations, and a second set prepared under International Financial Reporting Standards. In addition, as a listed company on the New York Stock Exchange, China Eastern Airlines files Form 20-F with the United States Securities and Exchange Commission. This filing includes a limited reconciliation of net income and net assets from International Financial Reporting Standards to United States' generally accepted accounting principles. Your job is to examine these financial statements, explore any differences noted between each of the financial statements and U.S. GAAP, and highlight some issues to be included in a financial analysis of China Eastern Airlines for possible inclusion in an investment portfolio.
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Bowen, Robert M., Jane Jollineau, and Loren Margheim. "iRobot Corporations Intellectual Property: Accounting For Research And Development Under U.S. GAAP Versus IFRS." Journal of Business Case Studies (JBCS) 9, no. 4 (August 1, 2013): 321–32. http://dx.doi.org/10.19030/jbcs.v9i4.7996.
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Founded by MIT scientists in 1990, iRobot Corporation designed, developed, and sold consumer and military robots to help people complete dull, dirty or dangerous tasks in real-world situations. The purpose of this case study is to stimulate discussion about intellectual property and how it should be measured and reported. Under U.S. generally accepted accounting principles (GAAP), iRobot reported no asset related to their internally generated intellectual property despite over 20 years of intensive research in robotics. In contrast, international financial reporting standards (IFRS) permitted firms to treat certain research and development (R&D) activities as an asset. By comparing U.S. GAAP and IFRS treatments of R&D, we provide an interesting example of the range of potential financial reporting effects across alternative accounting methods. Further, the case requires that students wrestle with the implications of moving from more rule-based accounting (U.S. GAAP) to more principles-based accounting (IFRS). How might U.S. managers, auditors, and investors likely respond? A teaching note is available.
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Harris, Peter, William Stahlin, and Moade Fawzi Shubita. "US GAAP Conversion To IFRS: A Case Study Of The Cash Flow Statement." Journal of Business Case Studies (JBCS) 10, no. 1 (December 31, 2013): 15–20. http://dx.doi.org/10.19030/jbcs.v10i1.8325.
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International Reporting Standards (IFRS) has become the required framework for most of the world financial market economies as of January 1, 2011. This includes, in a non-comprehensive listing, the many European Union countries - Canada, Australia and New Zealand. In the United States, US Generally Accepted Accounting Principles (GAAP) is still required. However, plans are presently in place by the SEC to abandon US GAAP and to adhere to IFRS requirements by as early as for the period ending December 31, 2014. As such, it is important to introduce IFRS accounting rules in the college curriculum and make it a major component of accounting classes. This case study takes a US GAAP Prepared Cash Flow Statement and, based on the facts of the case, requires students to prepare an IFRS-based Cash Flow Statement. The need to understand both US GAAP and IFRS rules is required to adequately address this case study, which is most suitable for an Intermediary Accounting, Accounting Theory and a Financial Statement Analysis class, as well as an Investment Finance course, at the graduate level.
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Yallapragada, RamMohan R., C. William Roe, and Alfred G. Toma. "The Prospects Of Replacing GAAP With IFRS In The United States." International Business & Economics Research Journal (IBER) 12, no. 1 (December 22, 2012): 25. http://dx.doi.org/10.19030/iber.v12i1.7509.
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Historically, each country developed its own Generally Accepted Accounting Principles (GAAP) for financial accounting and reporting and there was no uniformity among the GAAPs of different countries. Comparison of financial statements issued by business firms from different countries has become difficult leading toward suboptimal capital allocation across countries in the world. Gradually, there emerged a global demand for convergence of GAAP of different countries into a single set uniform accounting standards applicable to all countries. As a result, the International Accounting Standards Committee (IASC) was established in 1973. The IASC formed International Accounting Standards Board (IASB) in 2001 which began issuing International Financial Accounting Standards (IFRS). At this point about 100 countries have adopted IFRS for their financial reporting purposes. In 2010, the US Securities Exchange Commission (SEC) stated that it would be able to make a decision on the adoption of the IFRS in the United States within that year and would allow a five-year period for complete transition, if it is decided to incorporate the IFRS into the U S reporting standards. An intense debate ensued for and against incorporation of IFRS into the US GAAP. Four alternative processes are suggested for the transition - outright adoption, convergence, endorsement, and co-endorsement. This paper presents details of each of these suggested alternatives and future perspective of the adoption of IFRS into the U S accounting and reporting system.
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Alhaj-Yaseen, Yaseen S., Kean Wu, and Leslie B. Fletcher. "Accounting Standards and Earnings Quality — Evidence from Registered ADRs." Review of Pacific Basin Financial Markets and Policies 21, no. 04 (December 2018): 1850022. http://dx.doi.org/10.1142/s0219091518500224.
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This paper examines the changes in earnings quality of registered American Depositary Receipts (ADRs) as a result of switching accounting standards. We aim to shed light on the potential impact of International Financial Reporting Standard (IFRS) adoption on US firms. A suboptimal approach to achieve this goal is through examination of US firms’ surrogates such as ADRs. Unlike previous studies, we made a distinction between registered and unregistered ADRs and affirmed that registered ADRs are the closest surrogates with which to conduct our analysis because they are exclusively required to adhere to the Securities and Exchange Commission (SEC)’s stringent disclosure requirements. When cross-listing their equity on the US exchanges, foreign issuers can file their financial reports with the SEC using IFRS, US GAAP (generally accepted accounting principles), or their domestic GAAP with reconciliation to US GAAP. An improvement in earnings quality is documented when ADRs adopt US GAAP or IFRS versus domestic GAAP. However, when the comparison is made between US GAAP and IFRS, no difference in earnings quality is documented. These results indicate that switching to high-quality accounting standards is likely to improve earnings quality. This improvement is maximized when the difference between reporting standards is high and minimized if otherwise. Our conclusion is that the adoption of IFRS in the US is unlikely to change earnings quality of local issuers. Moreover, we drew a distinction between reconciliation with and adoption of high-quality accountings standards and find that while the former can enhance earnings quality, the latter can further improve it.
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Carpenter, Vivian L., Rita Hartung Cheng, and Ehsan H. Feroz. "Toward an empirical institutional governance theory: Analyses of the decisions by the 50 US state governments to adopt generally accepted accounting principles." Corporate Ownership and Control 4, no. 4 (2007): 42–59. http://dx.doi.org/10.22495/cocv4i4p3.
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In this paper, we develop and empirically test an institutional governance theory for explaining the decisions by the population of 50 US state governments to adopt Generally Accepted Accounting Principles (GAAP) for external financial reporting. Governmental accounting studies have generally explained the governance choice of an accounting method in terms of the economic consequences of these choices for managerial welfare and other microeconomic determinants of those decisions. While the explanatory power of these models are generally good, there is often a large unexplained variance which is presumably not explainable in terms of the extant agency models of accounting choice. Our study develops an institutional governance theory and demonstrates that institutional governance variables in conjunction with traditional economic agency variables can improve the explanatory power of government accounting choice models. Our empirical results are consistent with the stipulations of the institutional governance theory
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Marques, Ana. "Non-GAAP earnings: international overview and suggestions for future research." Meditari Accountancy Research 25, no. 3 (August 14, 2017): 318–35. http://dx.doi.org/10.1108/medar-04-2017-0140.
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Purpose The purpose of this paper is to synthesize insights from existing research on the disclosure of non-generally accepted accounting principles (GAAP) earnings, from an international point of view, and to suggest several avenues for future research in this area. Design/methodology/approach In conjunction with the analysis of existing research, the paper examines how different regulators and accounting standard setters have approached the topic of non-GAAP earnings disclosure. Findings The paper shows how non-GAAP earnings have been found to be more informative than GAAP earnings in several scenarios (countries where non-GAAP disclosures are compulsory, countries where these disclosures are voluntary but regulated and countries where they are not regulated). However, in certain circumstances, these disclosures may also mislead investors. Corporate governance mechanisms can curb managers’ opportunistic use of these measures. Originality/value The paper provides the growing number of academic researchers in this emerging area with a foundation and agenda upon which they can build their research.
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Melis, Giovanni, Andrea Melis, and Alessandro Pili. "Fair value and stakeholder-oriented accounting systems. Some evidence from Italy." Corporate Ownership and Control 4, no. 1 (2006): 127–38. http://dx.doi.org/10.22495/cocv4i1p11.
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This paper examined the key issues related to the effects of introduction of fair value in a stakeholder oriented accounting system. In particular, it discussed how the decision of the Italian policymaker to limit the distribution to shareholders of fair value gains is rooted on the importance of prudence in the Italian legal and GAAP framework. The paper seek to explore how the importance of the ‘prudence’ principle in the Italian legal and GAAP framework seems mainly due to the influence of broadly defined corporate governance issues, such as the ownership, control and capital structures that characterise Italian listed companies, the concept of the corporation as generally accepted in Italy, and cultural issues, in relation to prudence, risk-taking and uncertainty avoidance. This paper argued that the Italian regulator decision seems able to safeguard the interests of a wide range of corporate stakeholders, without lowering the quality of information to investors, and provided an example of income statement section (named comprehensive income statement) in which fair value gains and losses may be disclosed
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Forsyth, Timothy B., and Michael T. Dugan. "Inconsistencies in U.S. GAAP: Accounting for Executory Contracts." Issues in Accounting Education 21, no. 3 (August 1, 2006): 291–95. http://dx.doi.org/10.2308/iace.2006.21.3.291.
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This instructional case provides four different scenarios that illustrate the inconsistent treatment of various executory contracts under current generally accepted accounting principles (GAAP). The purpose of the case is threefold. First, it provides students an opportunity to use the Financial Accounting Research System (FARS) to resolve several accounting issues related to long-term executory contracts. Familiarity with FARS is essential, both for “real-world” use when students enter the accounting profession and for success on the computerized CPA exam, which includes case research. Second, as the Financial Accounting Standards Board (FASB) attempts to move toward principles-based standards (as opposed to rules-based standards), the case provides students an opportunity to observe that GAAP seems to be rules-based and theoretically inconsistent in the case of executory contracts. Third, the case can be used as a premise for discussing the standard-setting process and exploring differences between the economic substance of a transaction and its legal form.
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Churyk, Natalie Tatiana, Alan Reinstein, and Lance Smith. "Jones Enterprises Real Estate Investment Trust: Comparing U.S. and Canadian Acquisition Accounting, Balance Sheet and Security Commission Reporting, and Initial Public Offering Location." Issues in Accounting Education 33, no. 2 (February 1, 2018): 35–42. http://dx.doi.org/10.2308/iace-52043.
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ABSTRACT Based on a Big 4 real estate audit partner's client, this case introduces graduate research and advanced financial accounting students to acquisition accounting under U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS), provides a perspective on real estate investment trusts (REITs), and requires analyzing a U.S. versus Canadian (Ontario) initial public offering (IPO). Students list U.S. and Canadian advantages and disadvantages of REITs, record a portfolio purchase, prepare U.S. GAAP and IFRS balance sheets in order to grasp major REIT reporting differences, contrast the key provisions between U.S. and Canadian (Ontario) securities commissions' IPO reporting, and consider ongoing securities commissions' reporting options. Finally, students will recommend whether the IPO should be issued in the U.S. or Canada. Completing the case helps students: (1) grasp U.S. GAAP and IFRS acquisition accounting methods and different REIT presentations; and (2) recognize that the country selected for the IPO depends upon the issuer's circumstances and preferences.
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Claiborne, M. Cathy, and Kirkland A. Wilcox. "Home Heaters: A Holistic View of the Financial Statements." Issues in Accounting Education 26, no. 4 (November 1, 2011): 797–806. http://dx.doi.org/10.2308/iace-50053.
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ABSTRACT In this case, two start-up companies in the same industry have identical economic transactions. Although both companies follow generally accepted accounting principles (GAAP), each manager makes different choices and estimates when applying GAAP. By preparing the financial statements, calculating ratios, and comparing and contrasting the two companies, students see how choices and estimates made by management affect the financial statements. They also see the challenge faced by users of financial information when trying to interpret the financial statements and compare companies. Students really experience an “aha!” moment while analyzing this case. The case refutes their commonly held assumptions that accounting always has a right answer and that financial statements represent the truth.
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Beisland, Leif Atle, and Kjell Henry Knivsflå. "Have IFRS changed how stock prices are associated with earnings and book values?" Review of Accounting and Finance 14, no. 1 (February 9, 2015): 41–63. http://dx.doi.org/10.1108/raf-06-2013-0079.
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Purpose – The purpose of this paper is to examine how the mandatory shift from Norwegian Generally Accepted Accounting Principles (NGAAP) to International Financial Reporting Standards (IFRS) in Norway affected the valuation weights of earnings and book values, with the aim of gaining insights that are relevant for standard setters, investors and other users of accounting information. Design/methodology/approach – The authors extend the IFRS literature on structural shifts between the pre- and post-adoption periods by comprehensively controlling for factors that vary between the IFRS sample and the domestic Generally Accepted Accounting Principles (GAAP) sample. Moreover, the tests are designed to reveal the underlying accounting causes of the observed differences in value relevance. Findings – IFRS are balance sheet-oriented and emphasize measurement at fair value. By contrast, NGAAP are earnings-oriented and focus on historical cost. IFRS also differ from NGAAP by recognizing more intangible assets. Overall, IFRS are thus less conservative than NGAAP. It was found that expanded fair value accounting increases the value relevance of book values and decreases the value relevance of earnings. However, the improved matching of intangible asset expenditures with the future economic benefits of such intangible assets increases the persistence and value relevance of earnings relative to book values. Originality/value – This paper introduces a test methodology that is designed to identify the effects that specific accounting differences between the IFRS sample and the domestic GAAP sample have on value relevance. Consequently, this paper not only identifies the overall effects on value relevance but also contributes to the literature by identifying specific accounting differences between IFRS and GAAP that cause these overall effects, and thus obtain insights that are valuable for standard setters and other users of accounting information.
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Karapınar, Aydın, and Figen Zaif. "Does the IFRS improve earnings quality? A comparison of Turkish GAAP and IFRS." Journal of Islamic Accounting and Business Research 13, no. 2 (December 13, 2021): 277–96. http://dx.doi.org/10.1108/jiabr-10-2019-0206.
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Purpose The purpose of this study is to reveal the effect on earnings quality of switching to International Financial Reporting Standards (IFRS) from Turkish generally accepted accounting principles (GAAP) by comparing two sets of financial statements based on Turkish GAAP and IFRS. Design/methodology/approach This study is based on mathematical modeling. The variables (total assets, net income, total accruals, cash receivables, return on assets and size) in the models are core to the quantitative research that examines the relationship between them. In this study, the total accruals are computed based on the indirect approach, and the prediction error of the model represents discretionary accruals that reflect earnings management. The data set includes financial data prepared under IFRS and Turkish GAAP. The univariate and multivariate analyses are conducted by SPSS. Findings The results of this study indicate that IFRS does not cause any significant differences in total assets, but the net income under IFRS is larger compared to that under the Turkish GAAP. It is also found that while there is no significant difference in total accruals, there is a difference in discretionary accruals. In other words, Turkish firms use income-reducing discretionary accruals when adopting IFRS. Originality/value This study provides more insights into the effect of IFRS on earnings quality. It also provides evidence of the effect of accounting culture on IFRS adoption. As a code-law country in Turkey, publicly traded firms have to prepare financial statements based on both Turkish GAAP, which is rule-based and restricts management decisions with strict rules, and the principle-based IFRS which leaves more room to manipulate. To the authors’ knowledge, this is the first study that reveals the effect of accounting standards on earnings management by comparing two sets of financials of the same period prepared under different standards.
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Carpenter, Vivian L., and Ehsan H. Feroz. "GAAP as a symbol of legitimacy: New York State's decision to adopt generally accepted accounting principles." Accounting, Organizations and Society 17, no. 7 (October 1992): 613–43. http://dx.doi.org/10.1016/0361-3682(92)90016-l.
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Penner, James, and Jagjit Singh Saini. "Accounting for Giraffes at a For-Profit Zoo - A Case Study." International Journal of Accounting and Financial Reporting 1, no. 1 (February 11, 2015): 99. http://dx.doi.org/10.5296/ijafr.v5i1.6961.
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This case is based on the accounting at a for-profit zoo. It provides students with an opportunity to explore and apply the Accounting Standards Codification (ASC) using a real-life example. This case challenges the students to use critical thinking skills to identify the relevant standards, as there is no direct reference in the ASC for accounting at a for-profit zoo. An assessment of the students indicates that the case provides a useful learning experience in interpreting and applying the authoritative Generally Accepted Accounting Principles (GAAP) in a real-life situation. Additionally, the assessment results indicate that the case helps students to enhance their critical thinking, teamwork and problem-solving skills. This case could be used in any intermediate or advanced financial accounting class in which students are expected to use the ASC and learn the application of GAAP.
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ter Hoeven, Ralph. "De toekomst van IFRS in Europa: gaat de bom vallen?" Maandblad Voor Accountancy en Bedrijfseconomie 89, no. 4 (April 15, 2015): 120–21. http://dx.doi.org/10.5117/mab.89.31275.
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Het is inmiddels 20 jaar geleden dat de Europese Unie een beslissende keuze maakte in het ontwikkelen van een eigen GAAP (Generally Accepted Accounting Principles; dus stelsel van accountingregels). De keuze luidde: no, non, nein, não, nej, nee: er zou geen eigen EUGAAP worden ontwikkeld. Wel werd er voorzichtig gewezen op de toenmalige International Accounting Standards (IAS); inmiddels omgedoopt tot International Financial Reporting Standards (IFRS). Kortom Lidstaten werden vrijgelaten in de keuze van een GAAP voor beursgenoteerde ondernemingen en een beetje aangemoedigd om daarbij aan IAS te denken. Vijf jaar later, rond de millenniumwisseling dus, volgde er een update van de Europese accountingstrategie waarin niet geheel verrassend werd geconstateerd dat jaarrekeningen op de EU-kapitaalmarkt niet vergelijkbaar waren.
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R. Gregory, James. "RSP: Intangible Capital: Culture of Innovation and its Impact on the Cash Flow Multiple." Muma Business Review 2 (2018): 147–49. http://dx.doi.org/10.28945/4206.
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Intangible assets are growing exponentially as a component of company value, but these assets are often unmanaged due to generally accepted accounting principles (GAAP), which provide no accountability. This research paper reaffirms and expands a proven alternative approach, which utilizes the CoreBrand Index® to measure, value, and manage intangible assets, and their financial impact on the corporation’s cash flow multiple.
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Cullinan, Charles P. "Railroad Regulatory Accounting In An Era Of Rail Deregulation." Journal of Applied Business Research (JABR) 7, no. 2 (October 19, 2011): 3. http://dx.doi.org/10.19030/jabr.v7i2.6236.
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The environment in which railroads operate has changed significantly over the past century. As the regulation of railroads changed in response to the environment, the requirements of rail regulatory accounting changed as well. This paper discusses these various changes and indicates how rail regulatory accounting has moved in the direction of Generally Accepted Accounting Principles (GAAP) for financial reporting purposes. In addition, significant changes which have taken place in the cost accounting area are addressed. These changes have been made in both the data used and the systems used to process the data.
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Ehoff Jr., Clemense, and Dov Fischer. "Should The SEC Adopt International Financial Reporting Standards?" Review of Business Information Systems (RBIS) 16, no. 1 (December 29, 2011): 15–20. http://dx.doi.org/10.19030/rbis.v16i1.6760.
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In 2002, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) formally began a process to converge Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). By the end of 2011, the SEC will likely decide on whether to adopt International Financial Reporting Standards as the financial reporting system for U.S. public companies, continue with the convergence project, or reject IFRS altogether. This paper examines the benefits and drawbacks of each option and formulates a recommendation as to which option is in the best interest of U.S. investors.
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Janjani, Reza. "Comparing US-GAAP and Iran-GAAP operating cash flows to predict future cash flows." Journal of Financial Reporting and Accounting 13, no. 1 (July 6, 2015): 39–65. http://dx.doi.org/10.1108/jfra-06-2013-0047.
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Purpose – The main objective of this paper is to compare the ability of US-generally accepted accounting principles (GAAP) operating cash flows versus Iran-GAAP operating cash flows in predicting future cash flows. Design/methodology/approach – The sample comprises 240 firms (1,200 firm-years) during the period from 2004 to 2008 for which operating cash flows and other variables are available. Cross-sectional and panel data regression models are used in testing the hypotheses. Findings – This study finds that operating cash flows based on Iran-GAAP are no more effective in predicting future cash flows than those based on USA-GAAP, and the predictive ability of the model is improved by adding the earnings accrual components to the operating cash flows. Originality/value – The study suggests that the Iranian accounting standard setting committee recommends that the statement of cash flows be prepared based on the three-category model instead of the five-category model in an attempt to converge with the International Financial Reporting Standards. Consistent with Financial Accounting Standards Board and financial analyst recommendations, the results reveal that earnings are a better predictor than cash flows from operations.
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Ehoff Jr., Clemense, and Dov Fischer. "Why The SEC Is Delaying Adoption Of International Financial Reporting Standards." International Business & Economics Research Journal (IBER) 12, no. 2 (January 31, 2013): 223. http://dx.doi.org/10.19030/iber.v12i2.7635.
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In 2002, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) formally began a process to converge Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). The SEC has repeatedly delayed its decision on whether to adopt International Financial Reporting Standards as the financial reporting system for U.S. public companies, continue with the convergence project, or reject IFRS altogether. This paper will examine several key reports issued by the SEC and the Financial Accounting Foundation to gain further insight into 1) why the SEC has repeatedly delayed its decision, and 2) what the SEC will ultimately decide.
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Buchman, Thomas A., and C. Patrick Fort. "Alternative Disclosure Methods For Accounting Changes And Analysts Earnings Forecasts." Journal of Applied Business Research (JABR) 12, no. 3 (September 12, 2011): 48. http://dx.doi.org/10.19030/jabr.v12i3.5800.
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<span>Generally accepted accounting principles (GAAP) require that firms changing accounting principles must report the change in one of three ways: the cumulative effect method, the retroactive restatement method, or a no-adjustment (prospective) method. The method a company should use is determined by the type of change being made. This raises the following question: can it be demonstrated that one of these methods is better, in some sense, than the other methods? A major problem in evaluating alternative methods of accounting of the same economic event and in deciding which one method should be adopted as GAAP is that it is impossible to objectively determine which of the alternatives is best. However, it is possible to rank alternatives on one dimension of interest-which method minimizes the income forecasts in years after the change. We obtained a sample of forms making accounting changes and formed three portfolios of firms based on the method they used to account for the change in accounting principle. We then compared financial analysts earnings forecast errors for the firms in the three portfolios. After controlling for relevant variables, we found that, in the year firms made accounting changes the firms making the changes requiring retroactive restatement had significantly larger forecast errors than the firms making changes requiring the other forms of disclosure, but in years subsequent to the year of change there were no significant differences in forecast errors. This leads us to the conclusion that, from an earnings forecast accuracy perspective, there is no advantage to calculating and presenting the cumulative effect of an accounting change or in preparing restated or pro-forma financial statements.</span>
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Jerman, Mateja, and Massimo Manzin. "Accounting Treatment of Goodwill in IFRS and US GAAP." Organizacija 41, no. 6 (November 1, 2008): 218–25. http://dx.doi.org/10.2478/v10051-008-0023-5.
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Accounting Treatment of Goodwill in IFRS and US GAAPThe article presents an overview of the new accounting treatment of goodwill regarding International Financial Reporting Standards and American Generally Accepted Accounting Principles. Goodwill acquired through a business combination is no longer amortized but tested for impairment. Despite the fact that the objective of the new International Financial Accounting Standard has been to move towards international convergence; significant differences between standards still exist. The article presents the main changes of the regulation in the last years and the key differences between the two accounting treatments. In spite of the new accounting approach there are still lots of discussions, which indicate that the field is still not properly regulated. Finally, the article offers possible directions for future research and reporting practice.
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Ashbaugh, Hollis, and Per Olsson. "An Exploratory Study of the Valuation Properties of Cross-Listed Firms' IAS and U.S. GAAP Earnings and Book Values." Accounting Review 77, no. 1 (January 1, 2002): 107–26. http://dx.doi.org/10.2308/accr.2002.77.1.107.
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Despite the increasing integration of global capital markets, there is little evidence on the valuation properties of cross-listed, non-U.S. firms' accounting variables. We use the relative performance of the earnings capitalization, the book value, and the residual income valuation models to explore the valuation properties of International Accounting Standards and U.S. Generally Accepted Accounting Principles earnings and book values reported by non-U.S., cross-listed firms trading in a common equity market. Using non-U.S./non-U.K. firms whose shares trade on the International Stock Exchange Automated Quotation system in London, we find that the earnings capitalization model is the dominant accounting-based valuation model when crosslisted firms report under International Accounting Standards. In contrast, we find that when cross-listed firms report under U.S. Generally Accepted Accounting Principles, the residual income model is the dominant accountingbased valuation model. Our exploratory study provides insights into the valuation implications of allowing a dual reporting system for foreign registrants trading in a common equity market.
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Fay, Rebecca, John A. Brozovsky, and Patricia G. Lobingier. "Ruckman, Inc.: Converting from U.S. GAAP to IFRS." Issues in Accounting Education 26, no. 2 (May 1, 2011): 341–60. http://dx.doi.org/10.2308/iace-10020.
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ABSTRACT This case is designed as a comprehensive review of significant differences between accounting principles generally accepted in the United States of America (U.S. GAAP) and International Financial Reporting Standards (IFRS) for specific topics covered during most Intermediate Accounting courses. The task requires you to analyze and evaluate a company's significant accounting policies for compliance with IFRS as you plan and conduct the conversion of a firm's financial statements from U.S. GAAP to IFRS. The skills developed throughout this case are currently in high demand as IFRS is quickly becoming the global norm in accounting standards and many multinational companies based in the U.S. are already affected by these standards. The Securities and Exchange Commission (SEC) has developed a roadmap that may require U.S. companies to begin adopting IFRS in 2015. You will be tested on your knowledge of IFRS on the CPA exam. The case is presented in two phases, allowing you to experience the conversion process from planning to execution.
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Cussatt, Marc, Li Huang, and Troy J. Pollard. "Accounting Quality under U.S. GAAP versus IFRS: The Case of Germany." Journal of International Accounting Research 17, no. 3 (January 1, 2018): 21–41. http://dx.doi.org/10.2308/jiar-51997.
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ABSTRACT This study examines whether accounting quality changed for a diverse set of German firms that were required to switch accounting standards from U.S. Generally Accepted Accounting Principles (U.S. GAAP) to International Financial Reporting Standards (IFRS) (MANDATORY sample). Additionally, we utilize a control sample of German firms that report using IFRS during the entire sample period (CONTROL sample). In both the MANDATORY and CONTROL samples, we find evidence of decreased conditional conservatism, increased value relevance of earnings, and smoother earnings surrounding the mandatory IFRS adoption period. Further, we find no evidence that these changes in accounting quality proxies are significantly different between the MANDATORY and CONTROL samples. While we do not draw causal inferences, results are consistent with the notion that other concurrent changes within Germany, such as economic shocks or the changes in the institutional environment (e.g., enforcement system) documented in Christensen, Hail, and Leuz (2013), are driving the observed changes in accounting quality, rather than the transition from U.S. GAAP to IFRS.
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Kainth, Akarsh, and Ranik Raaen Wahlstrøm. "Do IFRS Promote Transparency? Evidence from the Bankruptcy Prediction of Privately Held Swedish and Norwegian Companies." Journal of Risk and Financial Management 14, no. 3 (March 15, 2021): 123. http://dx.doi.org/10.3390/jrfm14030123.
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The purpose of our paper is to investigate whether any differences between International Financial Reporting Standards (IFRS) and local Generally Accepted Accounting Principles (GAAP) impact the transparency of financial reporting of non-listed companies through bankruptcy prediction. This contributes to extant research that has focused on the effects of IFRS adoption in the context of listed companies. For our investigation, we used logistic regression, well-established accounting-based predictors, and a sample of financial statements from privately held Swedish companies using IFRS, and Norwegian companies using Norwegian GAAP. The results indicate that financial statements made under IFRS may be better suited for bankruptcy prediction than those made under Norwegian GAAP. Our findings suggest that the use of IFRS could aid in increasing the informativeness of financial reports by promoting transparency and prevent managers of firms facing insolvency from engaging in creative accounting practices. Our results should, however, be applied with caution, as they may be due to the differences in characteristics across firms that are not captured by our research design. We leave this issue open to future research.