International Accounting A User Perspective

As business and capital markets have continued to grow more global over recent years, the need for cross-border financial information has correspondingly increased. This has brought international accounting to the forefront. International Accounting: A User Perspective introduces international accounting concepts to future business managers, as their responsibilities will be global.

Shahrokh Saudagaran, Ph.D., CPA, is Director of the International Business Studies Institute at Santa Clara University's Leavey School of Business.

Financial Reporting in The Global Area

1

(30)

Introduction

2

(1)

Interaction Between Accounting and Its Environment

3

(8)

Nature of Capital Markets

3

(3)

Type of Reporting Regime

6

(1)

Type of Business Entities

6

(1)

Type of Legal System

7

(1)

Level of Enforcement of Regulations

7

(1)

Level of Inflation

8

(1)

Political and Economic Ties

8

(1)

Status of the Accounting Profession

9

(1)

Existence of a Conceptual Framework

9

(2)

Quality of Accounting Education

11

(1)

Diverse Roles of Accounting in Countries

11

(6)

Policy Choices in Accounting

13

(4)

Effects of Diversity on Capital Markets

17

(3)

Classification of Financial Accounting and Reporting Systems

20

(3)

Review of Selected Classification Studies

21

(2)

Major Challenges Facing Accounting Globally

23

(2)

Global Harmonization

23

(1)

Financial Reporting in Emerging Economies

24

(1)

Social and Environmental Reporting

24

(1)

Financial Reporting in the High Technology Era

25

(1)

Summary

25

(1)

Questions

26

(1)

Exercises

26

(1)

Cases

27

(1)

References

28

(3)

Harmonizing Financial Reporting Standards Globally

31

(28)

Rationale for Harmonization

32

(1)

Pressures for Harmonization

33

(3)

Obstacles to Harmonization

36

(1)

Measuring Harmonization

37

(1)

Supranational Organizations Engaged in Accounting Harmonization

38

(4)

Harmonization Scenarios

42

(3)

Current Evidence on Harmonization

45

(8)

Global

46

(2)

Regional

48

(5)

Summary

53

(1)

Questions

54

(1)

Exercises

54

(1)

Cases

55

(1)

References

56

(3)

Accounting for Currency Exchange Rate Changes

59

(28)

Overview of Foreign Currency Markets and Exchange Rates

60

(2)

Foreign Exchange Exposure

62

(1)

Accounting for Exchange Rate Fluctuations

63

(6)

Foreign Currency Transaction vs. Translation

63

(3)

Translation Methods

66

(3)

Foreign Currency Translation in the United States

69

(9)

FASB Statement No. 8 (SFAS No. 8)

70

(2)

FASB Statement No. 52 (SFAS No. 52)

72

(3)

SFAS No. 52 and the Functional Currency Concept

75

(1)

SFAS No. 52 Translation in Highly Inflationary Economies

76

(1)

SFAS No. 133---Accounting for Derivatives and Hedging Activities

77

(1)

The International Accounting Standard on Foreign Currency Translation

78

(1)

Accounting Issues Related to the Euro

79

(2)

Issues Related to the Euro's Transition Period

80

(1)

Issues Related to Financial Reporting and Disclosure

80

(1)

Summary

81

(1)

Questions

82

(1)

Exercises

82

(2)

Cases

84

(1)

References

85

(2)

Selected Financial Reporting and Disclosure Issues in the Global Context

87

(40)

Accounting for Changing Prices

88

(9)

Inflation-Adjusted Accounting Models

90

(1)

General Price Level Adjusted (GPLA) Model

91

(4)

Current Cost-Adjusted (CCA) Model

95

(1)

Evaluating the CCA Model

96

(1)

Accounting for Goodwill and Intangible Assets

97

(5)

Goodwill

98

(1)

Brands, Patents, and Trademarks

99

(2)

Research and Development

101

(1)

Geographic Segment Reporting

102

(6)

Research Evidence on Geographic Segment Reporting

103

(2)

Current Developments in Geographic Segment Reporting

105

(3)

Environmental and Social Disclosures

108

(12)

Environmental Disclosures

108

(3)

Employee Disclosures

111

(5)

Value Added Statement

116

(4)

Summary

120

(1)

Questions

120

(1)

Exercises

121

(2)

Cases

123

(1)

References

124

(3)

Using Corporate Financial Reports Across Borders

127

(34)

Corporate Responses to Foreign Users of Financial Statements

128

(12)

Coping With Transnational Financial Reporting

140

(4)

Preparer Response to Transnational Financial Reporting

141

(1)

User Response to Transnational Financial Reporting

142

(2)

International Financial Statement Analysis

144

(5)

Additional Issues in International Financial Statement Analysis

149

(3)

Availability of Data

149

(1)

Reliability of Data

149

(1)

Timeliness of Data

150

(1)

Language, Terminology, and Format

150

(2)

Summary

152

(1)

Questions

152

(1)

Exercises

153

(5)

Cases

158

(1)

References

159

(2)

Financial Reporting in Emerging Capital Markets

161

(30)

The Nature and Importance of Emerging Capital Markets

163

(2)

The Role of Financial Reporting in Emerging Capital Markets

165

(1)

Characteristics of Financial Reporting in Emerging Capital Markets

166

(11)

Availability

166

(3)

Reliability

169

(4)

Comparability

173

(4)

Financial Reporting Policy Issues in Emerging Capital Markets

177

(6)

Information Availability

178

(2)

Strengthening Enforcement Capability

180

(1)

Harmonization of Accounting Standards

181

(2)

Summary

183

(1)

Questions

184

(1)

Exercises

185

(1)

Cases

186

(1)

References

187

(4)

Managerial Issues in International Accounting

191

(26)

Budgeting and Performance Evaluation

192

(4)

Using Appropriate Performance Measures

192

(1)

Using Appropriate Currencies

193

(1)

Transfer Pricing Policies

194

(1)

Other Considerations

194

(1)

Distinguishing Between Manager Performance and Subsidiary Performance

195

(1)

Some Comparative Evidence on Budgets and Performance Evaluation Systems

195

(1)

Global Risk Management

196

(4)

Multinational Capital Budgeting

196

(2)

Managing Foreign Exchange Risk

198

(2)

Transfer Pricing

200

(7)

Major Constituents Affected by Transfer Pricing Choices

201

(1)

Internal Constituents

202

(1)

External Constituents

202

(2)

Transfer Pricing Methods

204

(2)

Advanced Pricing Agreements

206

(1)

Research Evidence on Determinants of International Transfer Pricing Methods

207

(1)

Information Technology

207

(4)

Complexities Involving IT Systems for MNCs

209

(1)

Global IT Challenges and Strategies

209

(2)

Summary

211

(1)

Questions

211

(1)

Exercises

212

(1)

Cases

213

(1)

References

214

(3)

List of Abbreviations

217

(2)

Subject Index

219

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International Accounting A User Perspective

Summary

Author Biography

Table of Contents

Supplemental Materials