It is necessary for large listed companies in different countries to Assignment

It is necessary for large listed companies in different countries to prepare financial statements using uniform accounting stand - Assignment Example Financial accounting and managerial accounting deal with the preparation of accounting reports that provide information for decision making. Financial accounting deals with the preparation of financial statements such as the balance sheets and the profit and loss accounts. These are disclosed to both internal and external users. The internal users include the management and employees. Management accounting deals with the preparation of accounts that are used internally by management for decision making. Financial accounting statements are subject to the scrutiny of outsiders; potential investors, financial institutions and economic analysts compared to managerial accounts that are used internally by management (Ramanna & Sletten, 2009). Financial accounts provide information on the financial position and position of the business whereas management accounts provide information for planning, budgets and controls for management decision making. This explains why financial accounts need to follow certain standards compared to managerial accounts. Due to globalization, countries need to speak the same language internationally so that the accounts produced can be understood and improve investor confidence regardless of the country concerned. This paper sets out to explain what IFRS is, the arguments for and against using uniform accounting standards in the preparation of financial statements and the flexibility of the preparation of management accounting reports (Caroline, 2010). History of International Financial Reporting Standards The International Accounting Standards Board (IASB) was formed to promote the adoption of the IFRS so that there is worldwide consistency in financial reporting regardless of where the organization was located. The International Accounting Standards Committee (IASC) was formed in 1973 to prepare standards that would be used by smaller nations in creating their own internal accounting standards. This was succeeded by the IASB in 2001. GAA P is an appropriate tool for financial reporting where organizations operate within a country’s borders with reason. With globalization a company may find it difficult to compare its financial statements using its GAAP without violating the GAAP of another. IFRS were developed due to the growth of global markets and the desire by multinationals and organizations to have one common set of financial statements that can be understood internationally. The IASB was mandated to develop high quality accounting standards that would reduce the cost of doing business, increase efficiency and provide information for potential investors. Currently, there are over 100 countries that have adopted the IFRS. There are many countries that are in the process of replacing the local standards with IFRS such as the US (Armstrong, Barth, Jagolinzer, & Riedl, 2010). Benefits of International Financial Reporting Standards There is greater comparability of financial statements. Companies from differe nt countries can easily compare their accounts. Using different rules in the preparation would not be possible and good for investment. The statements can be compared in all the financial markets irrelevant of where they were prepared. Financial statements prepared using IFRS are more flexible as they are principle based compared to local accounting stan

Other Essay Example | Topics and Well Written Essays - 1000 words

Other - Essay Example The Act necessitates GAO to evaluate the execution of the Act. This report discusses the Act's execution; evaluates NRSROs' performance-related expose; evaluates getting rid of NRSRO orientations from confident SEC rules; appraises the brunt of the Act on antagonism; and provides a scaffold for evaluating substitute models for compensating NRSROs (Sherman, 2011). To tackle the mandate, GAO reviewed SEC rules, assessment supervision, completed assessments, and staff memoranda; scrutinized required NRSRO exposes and market allocate data; and dialogued SEC and NRSRO officials and souk participants (Bangemenn, 2005). The procedure for reviewing NRSRO claims limits SEC staff's aptitude to fully guarantee that interviewees meet the Act's necessities (Bangemenn, 2005). An example of how the current processes used by agencies can be improved is while SEC had recorded 10 of 11 credit ranking agency interviewees as of July 2010, some employee’s memoranda to the Commission abbreviation t heir review of claims described anxieties that were not tackled prior to congregate (Bangemenn, 2005). 2. Analyze the impact of the attention rates on both short -term and long term debt plus how health care organization might best leverage your psychiatry. Illustrate your retort with specific illustrations. The answer to this inquiry lies in the fixed revenue nature of debts and debentures, often referred to jointly simply as "bonds" (Bangemenn, 2005). Without imaginative repackaging of the contemplation of prepaid health tactics, the appearance and timing of the conventional response to the immoderation of the medical institution would almost definitely have been quite diverse (Bangemenn, 2005).When a financier purchases a specified commercial bond, he or she is in fact purchasing a segment of a company's debt (Bangemenn, 2005). This debit is issued with precise details concerning episodic coupon payments, the chief amount of the debt and the instance period until the bond's prime (Bangemenn, 2005). Another notion that is vital for consideration interest rate risk in bonds is that bond values are inversely related to notice rates. When attention rates go up, bond values go down and thus vice versa (Bangemenn, 2005). There is a greater likelihood that interest duty will rise (and thus pessimistically affect a bond's bazaar price) within a longer time epoch than within a petite epoch. Long-term bonds have higher extent than short-term bonds. Because of this, a specified interest rate alter will have greater consequence on long-term bonds in comparison to short-term bonds (Bangemenn, 2005). This notion of duration can be hard to conceptualize, but presently think of it as the span of time that your bond will be pretentious by a notice rate change. For instance, suppose debt interest rates rise nowadays by 0.25% (Bangemenn, 2005). A bond with merely one coupon payment left in anticipation of maturity will be underpaying the loaners by 0.25% for only one coupon c ompensation (Bangemenn, 2005). Short and long terms debts on health care may result to the devastation of the health cares (Sherman, 2011). 3. Discuss the likelihood of a non-for -profit health care association issuing supply and why the management of such an association might want to do this. clarify your rationale. Management of such organizations