《ch03 Comparative Accounting I_pp》.ppt

Choi/Meek, 6/e International Accounting, 6/e Frederick D.S. Choi Gary K. Meek Learning Objectives Understand how financial reporting is regulated and enforced in five European countries: France, Germany, the Czech Republic, the Netherlands, and the U.K. Describe the key similarities and differences between the accounting systems of these five countries. Identify the use of International Financial Reporting Standards at the levels of the individual company and the consolidated financial statements in these five countries. Describe the audit-oversight mechanisms in these five countries. IFRS in the European Union Starting in 2005, all EU-listed companies must follow IFRS in their consolidated financial statements. Generally, IFRS consolidated statements are permitted for non-listed companies. Requirements for individual company financial statements vary – IFRS may be required, allowed, or prohibited. IFRS (contin) IFRS are based on fair presentation principles IFRS may be overridden in rare circumstances to achieve fair presentation Accounting measurements Business combinations – purchase accounting Goodwill – annual impairments test Investments in associates – equity method Translation of financial statements of foreign operations – functional currency concept IFRS (contin) Accounting measurements Assets valued at historical cost or fair value Research costs – expensed; development costs – capitalized LIFO not allowed Finance leases – capitalized; operating leases – expensed Provisions – recognized when probable and estimable Deferred taxes – recognized in full, using the liability method, for temporary differences between the carrying amount and tax base France Overview “The Plan” – national uniform chart of accounts (national accounting code) Objectives and principles of financial reporting Definitions of elements Recognition and valuation rules Standardized chart of accounts Model financial statements Other influences on French accounting rules Commercial legis