HOME
The Info List - Accounting Standards





Financial statements prepared and presented by a company typically follow an external standard that specifically guides their preparation. These standards vary across the globe and are typically overseen by some combination of the private accounting profession in that specific nation and the various government regulators. Variations across countries may be considerable making cross country evaluation of financial data challenging. Publicly traded companies typically are subject to the most rigorous standards. Small and midsize businesses often follow more simplified standards, plus any specific disclosures required by their specific lenders and shareholders. Some firms operate on the cash method of accounting which can often be simple and straight forward. Larger firms most often operate on an accrual basis. Accounting
Accounting
standards prescribe in considerable detail what accruals must be made, how the financial statements are to be presented, and what additional disclosures are required. Some important elements that accounting standards cover include: identifying the exact entity which is reporting, discussing any "going concern" questions, specifying monetary units, and reporting time frames.[1]

Contents

1 Limitations 2 Benefits of accounting standards 3 Common accounting standards around the globe 4 Global standardization and IFRS 5 See also 6 References 7 Further reading 8 External links

Limitations[edit] Accounting
Accounting
standards were largely written in the early 21st century. Massive accounting irregularities at large firms such as Worldcom
Worldcom
and Enron
Enron
illustrate that despite all these efforts, widespread fraud can still occur, and even be missed by the outside auditors. Benefits of accounting standards[edit] The lack of transparent accounting standards in some nations has been cited as increasing the difficulty of doing business in them. In particular, the Asian financial meltdown in the late 1990s has been partially attributed to the lack of detailed accounting standards. Giant firms in some Asian countries were able to take advantage of their poorly devised accounting standards to cover up immense debts and losses, which yielded a collective effect that eventually led the whole region into financial crisis. Common accounting standards around the globe[edit]

International Financial Reporting Standards

This standard is adopted in whole, or in large part, by many countries. Its acceptable in the U.S. (for a firm located outside of the U.S.) to report in this widely accepted format. Accounting
Accounting
standards by nation

China
China
- Chinese Accounting
Accounting
Standards (Zhōngguó qǐyè kuàijì zhǔnzé 中国企业会计准则) Canada
Canada
- Generally Accepted Accounting
Accounting
Principles France
France
- Generally Accepted Accounting
Accounting
Practice (Plan Comptable Général) Germany
Germany
- Generally Accepted Accounting
Accounting
Practice (Grundsätze ordnungsmäßiger Buchführung) India
India
- Indian Accounting
Accounting
Standards Luxembourg - Luxembourg Generally Accepted Accounting
Accounting
Principles (Lux GAAP) Nepal
Nepal
- Nepal
Nepal
Financial Reporting Standards Russia
Russia
- Russian GAAP United Kingdom
United Kingdom
- Generally Accepted Accounting
Accounting
Practice (UK) United States
United States
- Generally Accepted Accounting
Accounting
Principles (United States) Domestic firms typically report in this format. Foreign firms that trade in the U.S. typically report in IFRS format (above).

Global standardization and IFRS[edit] Many countries use or are converging on the International Financial Reporting Standards (IFRS) that were established and are maintained by the International Accounting
Accounting
Standards Board. In some countries, local accounting principles are applied for regular companies but listed or large companies must conform to IFRS, so statutory reporting is comparable internationally. All listed and grouped EU companies have been required to use IFRS since 2005, Canada
Canada
moved in 2009,[2] Taiwan in 2013,[3] and other countries are adopting local versions.[4][5] In the United States, while "...the SEC published a statement of continued support for a single set of high-quality, globally accepted accounting standards, and acknowledged that IFRS is best positioned to serve this role..."[6] progress is less evident.[6][7] See also[edit]

Center for Audit Quality
Center for Audit Quality
(CAQ) Constant item purchasing power accounting Convention of consistency Philosophy of accounting Statutory accounting principles for insurance companies in the US

References[edit]

^ WiseGeek. "What are the Generally Accepted Accounting
Accounting
Principles?". WiseGeek. Retrieved 9 February 2017.  ^ "AcSB Confirms Changeover Date to IFRSs". Canadian Institute of Chartered Accountants. 13 February 2008. Retrieved 8 August 2009.  ^ "IFRS accounting measures to take effect for all listed companies in Taiwan in 2013", Ted Chen, The China
China
Post, January 1, 2013 ^ "New Zealand International Financial Reporting Standards
International Financial Reporting Standards
2007-2014" ^ "Financial reporting framework in Australia", Deloitte ^ a b "IFRS: Current situation and next steps", pwc.com ^ "New mechanisms eyed by FASB, IASB in long march toward global comparability", Ken Tysiac January 10, 2013, journalofaccountancy.com

Further reading[edit]

Meeks, Geoff, and GM Peter Swann. " Accounting
Accounting
standards and the economics of standards." Accounting
Accounting
and Business Research 39.3 (2009): 191-210m

External links[edit]

FASAB Handbook of Federal Accounting
Accounting
Stan

.