Comparative international accounting systems and practices

Résumé du document

Undoubtedly, the Anglo-Saxon form of accounting can be distinguished from other accounting practices across regions such as continental Europe, Asia, Latin American, and many other parts of the world. This form of accounting pattern is particularly practiced in the United States and the United Kingdom. However, a few countries such as Australia, Canada, Hong Kong, India, Ireland, Kenya, Malaysia, New Zealand, Nigeria, Singapore, and South Africa, also practice the Anglo-Saxon accounting pattern. The common ground among all these countries is that they have been impacted by a colonial influence and hence, the adoption of the Anglo-Saxon accounting pattern. Anglo-Saxon accounting tends to be relatively optimistic and transparent compared to the patterns followed in Germany, Latin countries, and Japan. In many ways, Accounting in the United Kingdom is very similar to the accounting in the United States. This is an indisputable factor considering the significance or the historical and investment connections between the two countries. History has proved that the language and legal system were exported from the United Kingdom to the United States. In a similar manner, the founding fathers of U.S accounting principles, including pioneers such as Arthur Young (a Glasgow University graduate of the 1880s) have been cascaded between these two countries. In other words, the United States has adapted rather than adopted the United Kingdom's accounting tradition. Indeed, the most recent historical and environmental circumstances of the United States have given rise to some significant distinguishing features. These features are being inter-related with the policies of the country's counterpart (United Kingdom). It has been observed that the securities market is occupying a dominant role in the accounting regulation system of the United States.

Extraits

[...] In this context, the presentation of value-added statements is also quite common. Measurement Practices The use of replacement values in the Netherlands is not mandatory but permitted but the Civil Code consistent with the EC Fourth Directive. While replacement value information is often provided as supplementary information, very few companies use this approach in their main accounts. The best-known example is Philips, a major multinational, which has a comprehensive system of replacement value accounting first introduced in the 1950s. The main valuation base in the Netherlands is still historical cost, however, and in fact intangible assets must be valued at historical cost irrespective of which valuation basis is adopted for the main accounts. [...]

[...] Apart from company law and the Plan Comptable Général taxation is a major influence on French accounting. The tax laws tend to override the accounting rules to the extent that charges deductible for tax purposes must be recorded in the accounts if the tax benefit is to be claimed. However, under the 1982 Plan Comptable Général, the rules permit a distinction to be made in regard to depreciation between economic depreciation and exceptional depreciation, the latter being the excess of tax deductible over economic depreciation. [...]

[...] Pooling of interests is rarely found in practice. Similar to Germany, goodwill is calculated either on the basis of "fair values" or initially on the basis of book values with a subsequent allocation of cost on the basis of "fair values." Goodwill may be written off immediately against reserves or capitalized and amortized over its useful life. In practice, many large French corporations use the immediate write off method similar to the United Kingdom. The equity treatment for associated corporations is now required in France. [...]

[...] Apparently, international market pressures on French MNEs were such that a greater consistency with Anglo-Saxon principles was seen to be desirable. Thus, a kind of two-tier reporting has emerged-- consolidated accounts, which are more stock market and investor oriented, versus individual accounts, which are more creditor and taxation oriented. Under this regime, the use of replacement values and general purchasing power restatements are permitted. Market revaluations with respect to fixed assets and investments are also permitted. LIFO may be used to determine the cost of inventories. [...]

[...] However, a number of major MNEs go beyond this to compare favourably with Anglo-Saxon practice. ITALY Influences on Accounting Development In Italy, the influences of company law (the Civil Code) and the taxation regulations on accounting are similar to those in a number of other continental European countries and especially France, Belgium, and Spain, Italian accounting in practice is in many respects comparable with that of its European neighbours despite the fact that the EC Fourth and Seventh directives were only implemented, somewhat belatedly, in 1991. [...]