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Accounting Principles (accounting + principle)
Kinds of Accounting Principles Selected AbstractsMIND YOUR ACCRUALS: PERCEIVED USEFULNESS OF FINANCIAL INFORMATION IN THE AUSTRALIAN PUBLIC SECTOR UNDER DIFFERENT ACCOUNTING SYSTEMSFINANCIAL ACCOUNTABILITY & MANAGEMENT, Issue 3 2010Ralph Kober This study examines the usefulness of three accounting systems (cash, Generally Accepted Accounting Principles (GAAP) accrual, and Government Finance Statistics (GFS) accrual) for public sector decision-making. From a survey of internal users, external users, and preparers in Australia, we find that GAAP accrual information is perceived to be relatively more useful and understandable than the other two systems for most decisions examined. The relatively higher ratings for GAAP accrual information differ from earlier studies and may reflect an experience or familiarity effect whereby perceptions of usefulness are enhanced because respondents have become more used to the system. This effect might also explain the lower ratings for GFS accrual. [source] Accounting losses and earnings conservatism: evidence from Australian Generally Accepted Accounting PrinciplesACCOUNTING & FINANCE, Issue 3 2007Harishankar Balkrishna C12; M41 Abstract We provide evidence on three important aspects of Australian financial reporting; namely, the characteristics of losses, the extent to which Australian firms' earnings are conditionally conservative (i.e. bad news is reflected in earnings more quickly than good news) and the extent to which losses reflect incrementally greater conditional conservatism. We find evidence that loss incidence in Australia is frequent, with around 40 per cent of the sample firm-years from 1993 to 2003 being losses. Losses are also surprisingly persistent, and the probability of loss reversal declines monotonically as the history of losses extends. Although conditional conservatism is also shown to be a pervasive aspect of Australian Generally Accepted Accounting Principles, we demonstrate that it is more evident among loss observations. This result is robust across different methods of capturing conditional conservatism, and supports the conclusion that the relatively high frequency of losses is, at least in part, a reflection of conservative reporting. [source] A Proposal for Teaching Introductory and Intermediate Accounting in an Environment of International Financial Reporting Standards and Generally Accepted Accounting Principles for Private Enterprises,ACCOUNTING PERSPECTIVES, Issue 1 2010FRED PRIES comptabilité générale; enseignement; IFRS Abstract Teaching introductory and intermediate financial accounting in an environment of international financial reporting standards (IFRS) and generally accepted accounting principles for private enterprises (GAAP for PEs) is an issue facing faculty at Canadian universities and colleges. We present a number of options and then propose an approach that we believe provides a balanced treatment of accounting standards for both publicly accountable and private enterprises. This approach focuses on the concepts and principles that are common to both IFRS and GAAP for PEs. We argue that this approach encourages deep learning resulting in students' better understanding of accounting standards and their application. Proposition d'enseignement de la comptabilitéélémentaire et intermédiaire dans un contexte de normes internationales d'information financière et de principes comptables généralement reconnus pour les entreprises à capital fermé Résumé L'enseignement de la comptabilité générale élémentaire et intermédiaire dans le contexte des IFRS et des PCGR pour les entreprises à capital fermé est problématique pour les professeurs des universités et des collèges canadiens. Les auteurs exposent différentes options et proposent ensuite une approche qui offre, selon eux, un traitement équilibré des normes comptables pour les entreprises ayant une obligation d'information du public ainsi que les entreprises à capital fermé. Cette approche est axée sur les notions et les principes que partagent les IFRS et les PCGR pour les entreprises à capital fermé. Selon les auteurs, elle favorise un apprentissage en profondeur permettant aux étudiants de mieux comprendre les normes comptables et leur application. [source] Applying XBRL in an Accounting Information System Design Using the REA Approach: An Instructional Case,ACCOUNTING PERSPECTIVES, Issue 1 2010JACOB PENG base de données relationnelles; document d'instance; modélisation REA; XBRL Abstract The Church in Somewhere (CIS) is a small community church which uses an Excel spreadsheet to keep its financial records. The church administrator is considering moving from a spreadsheet accounting system to a relational database system that can easily be expanded to include more information in the future. In this paper we examine the transforming process in this hypothetical case by following a resource-event-agent (REA) modeling paradigm to create a database. We then link the REA model to financial reporting using Microsoft Access. In addition, using the financial report in the database, students prepare and validate an eXtensible Business Reporting Language (XBRL) document for CIS. Instead of applying the complex U.S. Generally Accepted Accounting Principles (GAAP) Taxonomies, Release 2009, the case uses a dedicated CIS Taxonomy to complete the mapping and tagging processes. L'application du XBRL dans la conception d'un système d'information comptable selon le modèle ressource-événement-agent: cas didactique Résumé Church in Somewhere (CIS) est une petite église communautaire qui utilise un tableur Excel pour tenir ses registres financiers. L'administrateur de l'église songe à passer du système comptable du tableur à un système de base de données relationnelles susceptible d'être facilement élargi de manière à recevoir ultérieurement davantage d'informations. Dans ce cas hypothétique, les auteurs examinent le processus de « conversion », en suivant le paradigme du modèle ressource-événement-agent (REA), menant à la création d'une base de données. Ils relient ensuite le modèle REA à l'information financière par le truchement de Microsoft Access. En se servant du rapport financier de la base de données, ils fournissent en outre aux étudiants l'occasion de préparer et de valider un document XBRL pour CIS. Plutôt que d'appliquer les taxonomies complexes des PCGR des États-Unis, édition 2009, les auteurs utilisent dans leur cas une taxonomie propre à CIS pour réaliser les processus de cartographie et de codage. [source] Compliance with the Disclosure Requirements of Germany's New Market: IAS Versus US GAAPJOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 1 2003Martin Glaum This research examines compliance with both International Accounting Standards (IAS) and United States Generally Accepted Accounting Principles (US GAAP) for companies listed on Germany's New Market. Based on a sample of 100 firms that apply IAS and 100 that apply US GAAP, we investigate the extent to which companies comply with IAS and US GAAP disclosure requirements in their year,2000 financial statements. Compliance levels range from 100% to 41.6%, with an average of 83.7%. The average compliance level is significantly lower for companies that apply IAS as compared to companies applying US GAAP. This study provides the first systematic evidence regarding the enforcement of US GAAP outside the US, and accordingly not subject to Securities Exchange Commission (SEC) review. The results unveil a considerable extent of non,compliance. The overall level of compliance with IAS and US GAAP disclosures is positively related to firms being audited by Big 5 auditing firms and to cross,listings on US exchanges. Compliance is also associated with references to the use of International Standards of Auditing (ISA) or US GAAS in the audit opinion. The findings add to the growing concerns regarding the lack of effective supervision in the German capital market. [source] Financial Reporting of Small Business Entities in Canada,JOURNAL OF SMALL BUSINESS MANAGEMENT, Issue 4 2006Michael Maingot Financial reporting for small business entities (SBEs) has been the subject of much debate and concern by the accounting bodies (institutes) in Canada, the United States, the United Kingdom, Ireland, Australia, New Zealand, and other countries. The main issue for the standard setters is whether they should have one set of standards for all companies or two sets of standards (one for big companies and one for SBEs). The main objective of our study is to examine whether SBEs in Canada should have their own new set of Generally Accepted Accounting Principles (GAAP) or should they continue to use big GAAP used by public companies. To address this issue in the Canadian environment, we sent out a questionnaire to a sample of managers and owners of small businesses, preparers, auditors, and users of small business accounts. These stakeholders were asked to identify the purposes of SBE financial statements, their levels of satisfaction or dissatisfaction with the present accounting standards for SBEs, the burdens imposed on the preparers of the financial statements, and the weaknesses of the present standards. Furthermore, they were asked to give the expected advantages of adopting new standards, after having ranked four models of financial reporting of SBEs. The results are quite interesting. Stakeholders indicated that financial statements of SBEs are prepared mainly for taxation purposes and borrowing. They are not satisfied with the present standards because they are costly to comply with and very complex. The burden of producing SBE financial statements can be reduced by simplifying the present standards. The new standards would mean a shorter and simpler form of financial statements. It is hoped that the results of this study will provide the standard setters in Canada and other countries with an indication of the future direction for SBE reporting and accounting. [source] The Financial Accountability of Australia's Medicare System: A Generational Accounting AnalysisFINANCIAL ACCOUNTABILITY & MANAGEMENT, Issue 2 2001Paul J. M. Klumpes The financial sustainability of publicly funded health care systems is sensitive to the demographics of ageing populations, which have a significant bearing on their financial management, accountability and reporting of their financial performance. This paper examines historical and current trends in demographic structure of Australia's population that are likely to impact on the financial management and accountability practices affecting Australia'suniversal public health care system (,Medicare'). The pay-as-you-go financed funding status of Medicare as represented under both currently required, cash-based accounting principles and proposed accrual-based accounting principles are criticised for not recognising the obligations of the Australian government under Medicare. An alternative system of generational accounting is proposed that projects the financial management costs of Medicare. Data are taken from both historical trends in expenditure and ageing as well as projected demographics. The analysis implies that there is significant intergenerational-inequity in the funding of Medicare, which is not recognised under accrual-based accounting principles that are now being used to evaluate the financial accountability and performance of government entities. [source] Governmental Accounting in Spain and the European Monetary Union: A Critical PerspectiveFINANCIAL ACCOUNTABILITY & MANAGEMENT, Issue 2 2000Vicente Montesinos During the last twenty-five years, the changes in Spanish accounting have been radical and significant, especially since 1986 when Spain joined the European Union. Those changes were first introduced in business accounting, following the patterns of the Fourth Directive, but governmental accounting has also been affected by structural reforms that have modified the financial reporting system, the accounting standards and the accounting principles to be applied. However, the governmental accounting system needs further improvement, particularly given the EMU framework and the relationship between governmental accounting and national accounting. [source] Voluntary disclosure of operating incomeACCOUNTING & FINANCE, Issue 1 2010Jilnaught Wong M41 Abstract This study investigates whether New Zealand firms' voluntary disclosure of operating income, which is also known as earnings before interest and tax, in the income statement is related to the investment opportunity set. New Zealand provides an ideal setting to examine this because New Zealand generally accepted accounting principles do not require the disclosure of operating income as an intermediate income number in arriving at net income (earnings) in the income statement. We hypothesize and find evidence that firms with high assets-in-place and high leverage are more likely to voluntarily disclose operating income/earnings before interest and tax. However, the assets-in-place finding is sensitive to alternative measures of the investment opportunity set. [source] A Proposal for Teaching Introductory and Intermediate Accounting in an Environment of International Financial Reporting Standards and Generally Accepted Accounting Principles for Private Enterprises,ACCOUNTING PERSPECTIVES, Issue 1 2010FRED PRIES comptabilité générale; enseignement; IFRS Abstract Teaching introductory and intermediate financial accounting in an environment of international financial reporting standards (IFRS) and generally accepted accounting principles for private enterprises (GAAP for PEs) is an issue facing faculty at Canadian universities and colleges. We present a number of options and then propose an approach that we believe provides a balanced treatment of accounting standards for both publicly accountable and private enterprises. This approach focuses on the concepts and principles that are common to both IFRS and GAAP for PEs. We argue that this approach encourages deep learning resulting in students' better understanding of accounting standards and their application. Proposition d'enseignement de la comptabilitéélémentaire et intermédiaire dans un contexte de normes internationales d'information financière et de principes comptables généralement reconnus pour les entreprises à capital fermé Résumé L'enseignement de la comptabilité générale élémentaire et intermédiaire dans le contexte des IFRS et des PCGR pour les entreprises à capital fermé est problématique pour les professeurs des universités et des collèges canadiens. Les auteurs exposent différentes options et proposent ensuite une approche qui offre, selon eux, un traitement équilibré des normes comptables pour les entreprises ayant une obligation d'information du public ainsi que les entreprises à capital fermé. Cette approche est axée sur les notions et les principes que partagent les IFRS et les PCGR pour les entreprises à capital fermé. Selon les auteurs, elle favorise un apprentissage en profondeur permettant aux étudiants de mieux comprendre les normes comptables et leur application. [source] Financial Reporting for Private Companies: The Canadian Experience,ACCOUNTING PERSPECTIVES, Issue 1 2009Morina D. Rennie ABSTRACT The issue of whether small and/or private companies should be allowed to use simplified accounting standards in financial reports has concerned the accounting profession for decades. It has been argued that preparing financial reports in accordance with the large volume of promulgated standards contained in generally accepted accounting principles (GAAP), some of which are relatively complex, has put a significant strain on the resources of small/private business. Moreover, information produced and presented in accordance with at least some accounting standards within GAAP may not be relevant for the users of small/private companies' financial statements. In this paper we look at differential reporting in Canadian GAAP, which gives nonpublicly accountable enterprises the ability to opt out of certain CICA Handbook requirements with unanimous consent of the shareholders. We look at lobbying activity in response to the proposed differential reporting standard and at nonpublicly accountable company experience with the differential reporting opportunity in the period since the standard was promulgated. [source] IAS Versus U.S. GAAP: Information Asymmetry,Based Evidence from Germany's New MarketJOURNAL OF ACCOUNTING RESEARCH, Issue 3 2003CHRISTIAN LEUZ abstract Motivated by the debate about globally uniform accounting standards, this study investigates whether firms using U.S. generally accepted accounting principles (GAAP) vis-à-vis international accounting standards (IAS) exhibit differences in several proxies for information asymmetry. It exploits a unique setting in which the two sets of standards are put on a level playing field. Firms trading in Germany's New Market must choose between IAS and U.S. GAAP for financial reporting, but face the same regulatory environment otherwise. Thus, institutional factors such as listing requirements, market microstructure, and standards enforcement are held constant. In this setting, differences in the bid-ask spread and share turnover between IAS and U.S. GAAP firms are statistically insignificant and economically small. Subsequent analyses of analysts' forecast dispersion, initial public offering underpricing, and firms' standard choices corroborate these findings. Thus, at least for New Market firms, the choice between IAS and U.S. GAAP appears to be of little consequence for information asymmetry and market liquidity. These findings do not support widespread claims that U.S. GAAP produce financial statements of higher informational quality than IAS. [source] The susceptibility of mental accounting principles to evaluation mode effectsJOURNAL OF BEHAVIORAL DECISION MAKING, Issue 2 2009Subimal Chatterjee Abstract The present research shows that the predictions and outcomes of mental-accounting tests depend on whether preferences are measured separately (one at a time) or jointly (comparatively). Across five studies, we show that joint evaluation weakens some decision biases (the theater ticket problem, the calculator and jacket problem), but exacerbates others (the basketball game problem). Joint evaluations serve as a check on whether people think the answers they give in separate evaluations make sense or require adjustment. We discuss how the findings impact (1) tests of mental accounting predictions (between vs. within subjects designs), and (2) the normative status of mental accounting. Copyright © 2008 John Wiley & Sons, Ltd. [source] Managing Earnings with Intercorporate InvestmentsJOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 5-6 2006Øyvind Bøhren Abstract:, We explore to what extent firms deliberately manage their financial reports by exploiting the flexibility of generally accepted accounting principles. Using a sample of Oslo Stock Exchange-listed firms with 20,50% equity holdings in other firms, we find that firms with high financial leverage tend to maximize reported earnings from these investments through their choice between the cost method and the equity method, possibly in an attempt to reduce debt renegotiation costs or to avoid regulatory attention. In contrast, managers do not systematically bias reported earnings to extract private benefits or to signal revised expectations about future cash flows. Firms use different earnings management tools in a consistent way, as the earnings effect of the cost/equity choice is not offset by discretionary accruals. [source] Accounting for Joint Ventures and Associates in Canada, UK, and US: Do US Rules Hide Information?JOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 3-4 2006Kazbi Soonawalla Abstract: Unlike US GAAP, accounting principles in Canada and the UK require disclosure of disaggregated components of joint ventures and associates. Using comparative analysis of Canadian, UK and US data, this study investigates the potential loss of forecasting and valuation relevant information from aggregating joint venture and associate accounting amounts. Findings show that aggregating joint venture and associate investment numbers, and aggregating joint venture revenues and expenses, each leads to loss of forecasting and valuation relevant information. Thus, current US accounting principles likely mask information that financial statement users could use to predict future earnings and explain share prices. [source] It's coming: M&As under IFRSsJOURNAL OF CORPORATE ACCOUNTING & FINANCE, Issue 3 2010Kang Cheng The authors predict that by 2014 , if not sooner , U.S. companies will find themselves reporting under international financial reporting standards, not generally accepted accounting principles. How will this affect your firm's merger-and-acquisition strategy and compliance? The authors explain that, and also offer some practical suggestions on how to prepare for the change. © 2010 Wiley Periodicals, Inc. [source] Bridging the GAAP: the Changing Attitude of German Managers towards Anglo-American Accounting and Accounting HarmonizationJOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 1 2000Martin Glaum This paper presents and compares results from two empirical studies into the attitudes of financial executives of large German corporations towards a global harmonization of accounting principles and towards the adaptation of German accounting to Anglo-American Standards. The first of the studies was conducted in 1994, the second in late 1997, early 1998. A comparison of the results reveals that German managers' attitudes have changed profoundly over the course of only three years. In 1994, they objected to the view that German accounting is inferior to Anglo-American accounting; they had a negative attitude towards US accounting; and they were highly sceptical about adapting German accounting to Anglo-American accounting rules. Today, German managers openly concede that German financial accounts have a lower information value for investors and that the use of German accounting rules reduces the demand for German shares abroad. They are also more willing to accept far-reaching changes in the German accounting system. The survey shows that numerous large corporations have already adopted international standards, or are planning to do so in the near future. A further finding is that opinion among German managers and firms has shifted significantly towards accepting IAS rather than US-GAAP as the basis for the internationalization of German accounting. In fact, more than 80%of managers believe that five years from now the great majority of German firms will publish their consolidated financial accounts according to either IAS or US-GAAP. [source] | ||||||||||||||||||||||