Comparative International Accounting

by Nobes, Christopher; Parker, Robert B

• ISBN13: 9780273703570
• ISBN10: 0273703579
• Edition: 10th
• Format: Paperback
• Copyright: 2008-01-01
• Publisher: Prentice Hall

Summary

Now firmly established as the leading text in the field, Comparative International Accounting takes a comprehensive look at the international dimensions of financial accounting and reporting. The book, which includes contributions from a diverse group of international practitioners and academics, has been carefully shaped into a coherent whole. This ninth edition has been extensively rewritten and fully updated to incorporate the latest developments in the field, especially the adoption of international standards in many countries. Features bull; bull;Broad overviews supported by detailed information on real countries and companies; bull;Across-the-board comparisons of major topics; bull;Examination of the requirements of International Financial Reporting Standards and of US GAAP; bull;Studies of accounting in Japan and China. New to this edition bull; bull;Six brand new chapters have been added, including chapters on the regulation of accounting and the politics of standard setting; bull;Separate consideration of group accounting by listed companies and of individual company accounting under domestic rules; bull;More coverage of the impact of accounting differences on capital markets and on analysis; Instructors' resources include an expanded Suggested Answers section in the back of the book. Also, in addition to an Instructor's Manual, unique PowerPoints for each chapter are now available online as well as links to real financial statements. Comparative International Accounting is ideal for students at both undergraduate and postgraduate levels taking courses in comparative and international accounting. Christopher Nobes is PricewaterhouseCoopers Professor of Accounting at the University of Reading, UK. From 1993 to 2001 he was a representative on the board of the International Accounting Standards Committee. Robert Parker is Emeritus Professor of Accounting at the University of Exeter, UK. He was formerly editor of the journal Accounting and Business Research. Both authors have received the American Accounting Association's award of 'outstanding international accounting educator'. Additional student support at www.pearsoned.co.uk/nobes

Author Biography

Christopher Nobes is PricewaterhouseCoopers Professor of Accounting at the University of Reading, UK Robert Parker is Emeritus Professor of Accounting at the University of Exeter, UK

Table of Contents

Contributors	xiv
Preface	xvi
Part I SETTING THE SCENE
Introduction	3	(21)
Contents	3	(1)
Objectives	3	(1)
Differences in financial reporting	4	(1)
The global environment of accounting	5	(7)
The nature and growth of MNEs	12	(3)
Comparative and international aspects of accounting	15	(4)
Structure of this book	19	(5)
Summary	21	(1)
References	22	(1)
Useful websites	22	(1)
Questions	23	(1)
Causes and examples of international differences	24	(27)
Contents	24	(1)
Objectives	24	(1)
Introduction	25	(1)
Culture	25	(3)
Legal systems	28	(1)
Providers of finance	29	(4)
Taxation	33	(1)
Other external influences	34	(2)
The profession	36	(1)
Conclusion on the causes of international differences	37	(1)
Some examples of differences	38	(13)
Summary	46	(1)
References	47	(2)
Further reading	49	(1)
Questions	49	(2)
International classification of financial reporting	51	(23)
Contents	51	(1)
Objectives	52	(1)
Introduction	52	(1)
The nature of classification	53	(1)
Classifications by social scientists	53	(2)
Classifications in accounting	55	(1)
Extrinsic classifications	56	(4)
Intrinsic classifications: 1970s and 1980s	60	(6)
Developments related to the Nobes classification	66	(1)
Further intrinsic classification	67	(2)
Is there an Anglo-Saxon group?	69	(1)
A taxonomy of accounting classifications	69	(5)
Summary	70	(1)
References	71	(2)
Questions	73	(1)
International harmonization	74	(27)
Contents	74	(1)
Objectives	74	(1)
Introduction	75	(1)
Reasons for, obstacles to and measurement of harmonization	76	(2)
The International Accounting Standards Committee	78	(9)
Other international bodies	87	(4)
The International Accounting Standards Board	91	(10)
Summary	94	(1)
References	94	(2)
Useful websites	96	(1)
Questions	97	(4)
Part II FINANCIAL REPORTING BY LISTED GROUPS
The context of financial reporting by listed groups	101	(14)
Contents	101	(1)
Objectives	101	(1)
Introduction	101	(1)
IFRS in the EU	102	(1)
Adoption of, and convergence with, IFRS	103	(1)
Foreign listing and foreign investing	104	(3)
Reconciliations from national rules to US GAAP and IFRS	107	(1)
High-level IFRS/US differences	108	(2)
Reconciliations from IFRS to US GAAP	110	(1)
Convergence of IFRS and US GAAP	111	(4)
Summary	112	(1)
References	113	(1)
Useful websites	114	(1)
Questions	114	(1)
The requirements of International Financial Reporting Standards	115	(27)
Contents	115	(1)
Objectives	116	(1)
Introduction	116	(1)
The conceptual framework and some basic standards	116	(7)
Assets	123	(3)
Liabilities	126	(1)
Group accounting	127	(2)
Disclosures	129	(13)
Summary	129	(1)
References	130	(1)
Further reading	130	(1)
Useful websites	130	(1)
Questions	131	(1)
Appendix 6 An outline of the content of International Financial Reporting Standards	132	(10)
Financial reporting in the United States	142	(31)
Contents	142	(1)
Objectives	143	(1)
Introduction	143	(1)
Regulatory framework	144	(3)
Accounting standard-setters	147	(3)
The conceptual framework	150	(3)
Contents of annual reports	153	(5)
Accounting principles	158	(6)
Consolidation	164	(2)
Audit	166	(1)
Differences from IFRS	167	(6)
Summary	169	(1)
References	170	(1)
Further reading	171	(1)
Useful websites	171	(1)
Questions	171	(2)
Enforcement of Financial Reporting Standards	173	(16)
Contents	173	(1)
Objectives	173	(1)
Introduction	173	(1)
Modes and models of enforcement	174	(4)
United States	178	(1)
European Union	178	(7)
Australia	185	(4)
Summary	185	(1)
References	186	(2)
Useful websites	188	(1)
Questions	188	(1)
Political lobbying on Accounting Standards -- national and international experience	189	(32)
Contents	189	(1)
Objectives	189	(1)
Introduction	190	(1)
Motivations for political lobbying	191	(2)
Political lobbying up to 1990	193	(12)
US political lobbying from 1990	205	(3)
Political lobbying of the IASC/IASB	208	(3)
Preparer attempts to control the accounting standard-setter	211	(2)
Political lobbying of the FASB's convergence with the IASB	213	(2)
Some concluding remarks	215	(6)
Summary	215	(1)
References	216	(2)
Useful websites	218	(1)
Questions	218	(3)
Part III HARMONIZATION AND TRANSITION IN EUROPE AND EAST ASIA
Harmonization and transition in Europe	221	(23)
Contents	221	(1)
Objectives	221	(1)
Introduction	222	(1)
Harmonization within the European Union	222	(6)
Transition in Central and Eastern Europe	228	(6)
Poland	234	(10)
Summary	239	(1)
References	240	(2)
Useful websites	242	(1)
Questions	243	(1)
Harmonization and transition in East Asia	244	(27)
Contents	244	(1)
Objectives	244	(1)
Introduction	245	(1)
Japan	245	(14)
China	259	(12)
Summary	264	(1)
References	265	(2)
Further reading	267	(1)
Useful websites	267	(1)
Questions	267	(4)
Part IV FINANCIAL REPORTING BY INDIVIDUAL COMPANIES
The context of financial reporting by individual companies	271	(7)
Contents	271	(1)
Objectives	271	(1)
Introduction	271	(1)
Outline of differences between national rules and IFRS or US GAAP	272	(1)
The survival of national rules	272	(3)
Financial reporting, tax and distribution	275	(1)
Special rules for small or unlisted companies	276	(2)
Summary	276	(1)
References	277	(1)
Useful websites	277	(1)
Questions	277	(1)
Making accounting rules for non-listed business enterprises in Europe	278	(21)
Contents	278	(1)
Objectives	278	(1)
Introduction	278	(1)
Who makes accounting rules?	279	(9)
Which business enterprises are subject to accounting rules?	288	(11)
Summary	292	(1)
References	293	(1)
Further reading	294	(1)
Useful websites	295	(1)
Questions	296	(1)
Appendix 13.1 Contents of the Plan comptable general	297	(1)
Appendix 13.2 Financial accounting chart of accounts	298	(1)
Accounting rules and practices of individual companies in Europe	299	(28)
Contents	299	(1)
Objectives	299	(1)
Introduction	299	(1)
France	300	(4)
Germany	304	(4)
United Kingdom	308	(19)
Summary	310	(1)
References	311	(1)
Further reading	312	(1)
Useful websites	312	(1)
Questions	312	(1)
Appendix 14.1 Formats for French financial statements	313	(5)
Appendix 14.2 Formats for German financial statements	318	(3)
Appendix 14.3 Formats for British financial statements	321	(6)
Part V MAJOR ISSUES IN THE FINANCIAL REPORTING OF MNEs
Key financial reporting topics	327	(22)
Contents	327	(1)
Objectives	327	(1)
Introduction	328	(1)
Recognition of intangible assets	328	(1)
Asset measurement	329	(2)
Financial instruments	331	(3)
Provisions	334	(3)
Employee benefits	337	(4)
Deferred tax	341	(4)
Revenue recognition	345	(4)
Summary	346	(1)
References	347	(1)
Questions	347	(2)
Consolidation	349	(15)
Contents	349	(1)
Objectives	349	(1)
Introduction	350	(1)
Rate of adoption	350	(1)
The concept of a `group'	351	(1)
Harmonization from the 1970s onwards	352	(4)
Definitions of group companies	356	(1)
Publication requirements and practices	357	(1)
Techniques of consolidation	358	(6)
Summary	362	(1)
References	362	(1)
Further reading	363	(1)
Questions	363	(1)
Foreign currency translation	364	(42)
Contents	364	(1)
Objectives	365	(1)
Introduction	365	(4)
Translation of transactions	369	(6)
Introduction to the translation of financial statements	375	(3)
The US initiative	378	(3)
The temporal method versus the closing rate method	381	(5)
FAS 52	386	(2)
IAS 21	388	(2)
Translation of the income statement	390	(3)
Accounting for translation gains and losses	393	(6)
Research findings	399	(3)
An alternative to exchange rates?	402	(4)
Summary	403	(1)
References	404	(1)
Further reading	405	(1)
Questions	405	(1)
Segment reporting	406	(27)
Contents	406	(1)
Objectives	406	(1)
What is segment reporting?	406	(2)
The need for segment information	408	(4)
Disclosure regulations	412	(5)
Problems of segment identification	417	(3)
Evidence on the benefits of segment reporting	420	(13)
Summary	426	(1)
References	427	(2)
Questions	429	(4)
Part VI ANALYSIS AND MANAGEMENT ISSUES
International financial analysis	433	(24)
Contents	433	(1)
Objectives	433	(1)
Introduction	434	(1)
Understanding differences in accounting	434	(5)
Disclosure practices in international financial reporting	439	(7)
Interpreting financial statements	446	(4)
Financial analysis and the capital market	450	(7)
Summary	453	(1)
References	454	(2)
Questions	456	(1)
International auditing	457	(28)
Contents	457	(1)
Objectives	457	(1)
Introduction	458	(1)
Reasons for the internationalization of auditing	459	(5)
Promulgating international standards	464	(6)
The international audit process	470	(15)
Summary	482	(1)
References	483	(1)
Further reading	483	(1)
Useful websites	484	(1)
Questions	484	(1)
International aspects of corporate income taxes	485	(21)
Contents	485	(1)
Objectives	485	(1)
Introduction	486	(2)
Tax bases	488	(4)
International tax planning	492	(1)
Transfer pricing	492	(2)
Tax systems	494	(6)
Harmonization	500	(6)
Summary	502	(1)
References	502	(2)
Further reading	504	(1)
Useful websites	504	(1)
Questions	504	(2)
Managerial accounting	506	(26)
Contents	506	(1)
Objectives	506	(1)
Introduction	507	(1)
The balanced scorecard as an overview tool	508	(2)
Currency and control	510	(4)
Variances and foreign exchange	514	(1)
Culture and management accounting	514	(10)
Control and performance	524	(3)
Looking forward	527	(5)
Summary	527	(1)
References	528	(3)
Questions	531	(1)
Glossary of abbreviations	532	(5)
Suggested answers to some of the end of chapter questions	537	(19)
Author index	556	(3)
Subject index	559