International Accounting

Résumé du document

According to Colasse (2000), "Accounting harmonization means an institutional process, which aims to combine the standards and national accounting practices and, consequently, to facilitate comparison of financial statements produced by firms in different countries. We can distinguish the harmonization of standards, considering that the latter is to the same standards in the same geographical area and aims at uniformity of accounting practices at its heart. Harmonization, however, is supposed to allow some diversity of accounting practices and seeks only to establish equivalence between them and is normally less than the standards, however, can also be seen that harmonization is a less stringent set of standards and a first step towards it. " In recent years, especially after the IASB (International Accounting Standards Board) had set the goal of developing a comprehensive set of standards known as International Financial Reporting Standards or IFRS, which are intended mainly to generalize the concept of fair value but to reduce the options in the previously issued IAS to ensure better comparability of financial statements, there is a real trend towards the international benchmark. Today, membership in the international system established by the IASB continues to increase and the contagion affects both powerful economies and the less powerful. The development of financial markets and transnational transactions and the need to facilitate investor access to reliable and understandable interpretations contributed to implementation of IAS. On 19 July 2002, the European Parliament adopted the 2005 Regulation that adopted the application of international standards for consolidated accounts of listed companies, including banks, insurance companies. We examine the need for an accounting strategy in this document and the various repercussions it brings forth.

Extraits

[...] In Anglo-Saxon countries, taxation has no influence on the accounting law. Taxable income is calculated independently of the accounting in order to provide a dual set of accounts: one purely financial, the other is purely fiscal.[1] The Anglo-Saxon model is composed of market-oriented countries. In these countries, there are highly developed financial markets for financing the entire economy. Thus, the objectives of the dissemination of financial information by companies mainly promote stock market investors interested in the profitability of their investment. [...]

[...] The adoption of accounting standards raised the problem of compatibility of accounting systems of major countries in the world, all of which have different theoretical conceptions. In practice, it is customary to differentiate between: An Anglo-Saxon model based on economic reality; European (and Japanese) model based on the laws. But recent scandals have illustrated the need for an accounting benchmark, known and acknowledged by all. Therefore, this harmonisation has concerned all the players and all countries: investors, financial analysts, employees, banks, governments. Thus, the German company Daimler-Benz illustrates this complexity. In September 1993, the company posted a profit of 168 million Marks. [...]

[...] These are generally: The balance sheet The income statement From a cash flow statement Of the Annex In conclusion, the standardization process in a given country is related to its context. In Anglo-Saxon countries, contrary to what happens in most countries of continental Europe, standardization is the result of private sector professionals and trade unions. The principle of economic liberalism is opposed to any attempt to regulate accounting practices by the State. Accordingly, in these countries, accounting mainly responds to the information needs of businesses; the accounting system is more economical. [...]

[...] The IASB is now composed of a supervisory board, whose members are trustees, an executive committee, a Standards Interpretation Committee (SIC) and a Standards Advisory Committee (SAC). The Executive Committee is composed of 14 members appointed by the trustees. The operational role is essential since it is primarily responsible for preparing accounting standards now called International Financial Reporting Standards (IFRS). What are the new accounting principles? Accounting does not create wealth. Its mission is to provide reliable and transparent financial, information for users. These fundamental principles are more important than ever, as we can all recall some recent financial scandals. [...]

[...] The European Union, since 2002, has adopted the IAS-IFRS regulation requiring listed companies to present their consolidated accounts using IAS. However, regarding non-publicly traded companies, harmonisation is more inconvenient because they don't necessarily have the desire to dwell on the stock market. Therefore, they do not require the establishment of accounts at the same level as the listed companies Large vs Medium vs Small Firm size differs according to several legal criteria in each country; such as the number of employees, geographic location, type of industry or the turnover. [...]