Tenth Edition. Christopher Nobes and Robert Parker

Transcription

1 Tenth Edition Christopher Nobes and Robert Parker Prentice Hall FINANCIAL TIMES /in/mprintof Pearson Education Harlow, England London New York Boston San Francisco Toronto Sydney Tokyo Singapore Hong Kong Seoul Taipei New Delhi Cape Town Madrid Mexico City Amsterdam Munich Paris Milan

2 Brief contents Contributors Preface xvi xviii Part 1 S ETTING THE SCEN E St I,,..,.X....,.-.:.N.'.., r^., '...f.L.»...'...,..ii l 1.," -,' '......I-.,-...'..,.;. JIL-W...' 1 Introduction 3 2 Causes and examples of international differences 24 3 International classification of financial reporting 51 4 International harmonization 74 Part II FINANCIAL REPORTING BY LISTEDJ3R0UPS 5 The context of financial reporting by listed groups The requirements of International Financial Reporting Standards Different versions of IFRS practice Financial reporting in the United States Enforcement of Financial Reporting Standards Political lobbying on Accounting Standards - US, UK and international experience 206 Part III HARMONIZATION AND TRANSITION IN EUROPE AND EAST ASIA 11 Harmonization and transition in Europe Harmonization and transition in East Asia 257 [PartisFlNANCIALj*fPORTING BY INDIVIDUAL COMPANIES 13 The context of financial reporting by individual companies Making accounting rules for non-listed business enterprises in Europe ^ Accounting rules and practices of individual companies in Europe 314 Part V MAJOR ISSUES IN FINANCIAL REPORTING BY MNEs 16 Key financial reporting topics 343 v

3 Brief contents 17 Consolidation Foreign currency translation 384 r 19 Segment reporting 427 jpartvi ANALYSIS AND MANAGEMENT ISSUES 20 International financial analysis International auditing International aspects of corporate income taxes Managerial accounting 531 Glossary of abbreviations, 558 Suggested answers to some of the end-of-chapter questions 563 Author index 583 Subject index 587 VI

4 Contributors Preface, xviii xvi Part I SETTING THE SCENE 1 Introduction 3 Contents 3 Objectives Differences in financial reporting The global environment of accounting The nature and growth of MNEs Comparative and international aspects of accounting Structure of this book 18 Summary 21 References 21 Useful websites 22 Questions 22 2 Causes and examples of international differences 24 Contents 24 Objectives Introduction^ "Culture Legal systems Providers of finance Taxation / Other external influences The profession Conclusion on the causes of international differences Some examples of differences 38 Summary 46 References -p. 47 Questions,. " '.. 50 vii

5 International classification of financial reporting 51 Contents 51 Objectives " 52 j 3.1 Introduction The nature of classification -\ Classifications by social scientists Classifications in accounting Extrinsic classifications Intrinsic classifications: 1970s and 1980s Developments related to the Nobes classification Further intrinsic classification, Is there an Anglo-Saxon group? A taxonomy of accounting classifications 69 Summary 70 References 71 Questions 73 International harmonization 74 Contents 74 Objectives Introduction Reasons for, obstacles to and measurement of harmonization The International Accounting Standards Committee Other international bodies The International Accounting Standards Board 91 Summary 94 References 95 Useful websites 97 Questions k. 98 Part II FINANCIAL REPORTING BY LISTED GROUPS 5 The context of financial reporting by listed groups 101 Contents 101 Objectives c Introduction IFRS in the EU.'.. ' Adoption of, and convergence with, IFRS ; Foreign listing and foreign investing J Reconciliations from national rules to US GAAP and IFRS High-level IFRS/US differences 110 VIM

6 5.7 Reconciliations from-ifrs to US GAAP 5.8 Convergence of IFRS and US GAAP Summary References Useful websites Questions The requirements of International Financial Reporting Standards Contents Objectives 6.1 Introduction 6.2 The conceptual framework and some basic standards 6.3 Assets 6.4 Liabilities 6.5 Group accounting 6.6 Disclosures Summary 132 References 132 Further reading 133 Useful websites 133 Questions 133 Appendix 6.1 An outline of the content of International Financial Reporting Standards Different versions of IFRS practice 145 Contents 145 Objectives / l / Introduction Motivations for different IFRS practice Scope for different IFRS practice Conclusion 154 Summary 155 References 155 Questions Financial reporting in the United States 157 Contents f ' 157 Objectives " Introduction Regulator^ framework. 159 IX

7 8.3 Accounting standard-setters The conceptual framework Contents of annual reports Accounting principles J Consolidation Audit Differences from IFRS 184 Summary,, 186 References 186 Further reading 187 Useful websites 188 Questions Enforcement of Financial Reporting Standards 189 Contents 189 Objectives, Introduction Modes and models of enforcement United States European Union Australia 201 Summary 202 References ' 202 Useful websites 204 Questions ( Political lobbying on Accounting Standards - US, UK and international experience 206 Contents 206 Objectives Introduction Motivations for political lobbying Political lobbying up to US political lobbying from Political lobbying of the IASC/IASB Preparer attempts to control the accounting standard-setter Political lobbying of the FASB's convergence with the IASB Some concluding remarks 231 Summary,, 231 References,r- 232 Useful websites 234 Questions 234

8 ipartlll HARMONIZATION AND TRANSITION IN EUROPE ' ' "" : I AND EAST ASIA j II Harmonization and transition in Europe 237 Contents 237 Objectives Introduction Harmonization within the European Union Transition in Central and Eastern Europe 244 Summary " 253 References 253 Useful websites 256 Questions Harmonization and transition in East Asia 257 Contents 257 Objectives Introduction japan China 272 Summary 277 References 278 Further reading 280 Useful websites 280 Questions 280 Appendix 12.1 ASBE Standards 282 Part IV FINANCIAL REPORTING BY INDIVIDUAL COMPANIES 13 The context of financial reporting by individual companies 285 Contents 285 Objectives Introduction Outline of differences between national rules and IFRS or US GAAP The survival of national rules Financial reporting, tax and distribution Special rulesfor small or unlisted companies 290 Summary 292 References 292 xi

9 Useful websites n 292 Questions Making accounting rules for non-listed business enterprises in Europe 293 Contents 293 Objectives c Introduction Who makes accounting rules? Which business enterprises are subject to accounting rules? 303 Summary _ 307 References 308 Further reading 309 Useful websites 310 Questions... 31T Appendix Contents of the Plan comptable general 312 Appendix 14.2 A Financial accounting chart of accounts Accounting rules and practices of individual companies in Europe 314 Contents 314 Objectives Introduction France Germany United Kingdom. 324 Summary 326 References 326 Further reading 327 Useful websites 327 Questions 327 Appendix15.1 Formats for French financial statements 328 Appendix 15.2 Formats for German financial statements 333 Appendix 15.3 Formats for British financial statements 336 Part V MAJOR ISSUES IN FINANCIAL REPORTING BY MNEs ; 16 Key financial reporting topics 343 Contents J _ 343 Objectives ^ " Introduction 344 XII

10 16.2 Recognition of intangible assets Asset measurement Financial instruments Provisions Employee benefits Deferred tax Revenue recognition Comprehensive income 364 c Summary 365 References 366 Questions Consolidation 368 Contents 368 Objectives Introduction Rate of adoption The concept of a'group' Harmonization from the 1970s onwards Definitions of group companies Publication requirements and practices Techniques of consolidation 377 Summary 381 References 382 Further reading 382 Questions Foreign currency translation 384 Contents 384 Objectives Introduction Translation of transactions Introduction to the translation of financial statements The US initiative ' ; The temporal method versus the closing rate method FAS IAS Translation of comprehensive income Accounting for translation gains and losses Research findings^ Analternative to exchange rates? 423 Summary 423 References 424 xiii

11 Further reading > 425 Questions Segment reporting 427 Contents 427 Objectives 427 1,9.1 What is segment reporting? The need for segment information Disclosure regulations Evidence on the benefits of segment reporting 443 Summary 450 References {, 451 Questions 453 Part VI ANALYSIS AND MANAGEMENT ISSUES 20 International financial analysis 457 Contents, 457 Objectives Introduction Understanding differences in accounting Disclosure practices in international financial reporting Interpreting financial statements Financial analysis and the capital market 474 Summary 477 References 478 Useful websites. 480 Questions International auditing 481 Contents ' Objectives Introduction Reasons for the internationalization of auditing Promulgating international standards The international audit process 495 Summary 507 References 508 Further J reading ' 508 Useful websites ii 508 Questions 509 XIV

12 22 International aspects of corporate income taxes 510 Contents 510 Objectives Introduction Tax bases International tax planning Transfer pricing Tax systems Harmonization 525 Summary 527 References 527 Further reading 529 Useful websites 529 Questions Managerial accounting 531 Contents ~ 531 Objectives Introduction The balanced scorecard as an overview tool Currency and control Variances and foreign exchange 539 '23.5 Culture and management accounting Control and performance Looking forward 551 Summary 553 References 554 Questions, 557 Glossary of abbreviations 558 Suggested answers to some of the end-of-chapter questions 563 Author index 583 Subject index 587 xv