The development of the current International Accounting Standards Board (IASB) from the earlier International Accounting Standards Committee (IASC) provides insight into many issues of international ...financial reporting, among them the characteristics of international accounting standards themselves. This article reviews Camfferman and Zeff’s Camfferman, K., & Zeff, S. A. (2007). Financial reporting and global capital markets. A history of the international accounting standards committee 1973–2000. Oxford: Oxford University Press volume on the organizational development of the IASC and contextualizes it in the broader literature of cross-border standardization in accounting. While having produced a seminal piece, the authors take a clear Anglo-American perspective. The downsides are insufficiencies regarding a simplistic understanding of experts and expertise, a neglect of the role of auditing firms, and only an imbalanced integration of different stakeholders.
In this paper, we aim to compare the cyclical behavior of credit impairments in the P&L account under three accounting regimes: IAS 39, IFRS 9, and US GAAP with the CECL update. Our results show that ...although IFRS 9 is less procyclical than IAS 39, it remains more procyclical than CECL. The difference comes from accounting for the expected loss in one year in the case of IFRS 9, while CECL accounts for expected losses over their lifetime. This accounting comes at the cost of a large increase in provisions that occur primarily during longer contractionary phases. However, the length and shape of the cycle matter more under IFRS 9.
Drawing on a large sample of European firms, we examine whether variant compliance levels with mandated disclosures under IAS 36 Impairment of Assets and IAS 38 Intangible Assets are value relevant ...and affect analysts' forecasts. Our results indicate a mean (median) compliance level of about 84% (86%) but high variation among firms and disclosure levels regarding IAS 36 being much lower than those regarding IAS 38. In depth, analysis reveals that non-compliance relates mostly to proprietary information and information that reveals managers' judgment and expectations. Furthermore, we find a positive (negative) relationship between average disclosure levels and market values (analysts' forecast dispersion). Results, however, hold more specifically for disclosures related to IAS 36, and these also improve analysts' forecast accuracy. Our findings add knowledge regarding the economic consequences of mandatory disclosures, have an appeal to regulators and financial statement preparers and reflect on the IASB's concerns to increase the guidance and principles on presentation and disclosure.
This paper sets out to enquire about the nature of constituents' participation in the IASB's due process in terms of representation (constituents' diversity and characteristics) and drivers to ...participate. We choose to adopt a multi-issue/multi-period approach to investigate constituents' formal participation. An analysis of comment letters sent directly to the IASB over the period 2002-2006, reveals that preparers sent most letters followed by the accounting profession and standard setters. With regard to timing, we find that preparers concentrate their participation efforts at a later stage in the process compared to the other constituents, who react earlier. Formal indirect participation in the IASB's due process by submitting comment letters to EFRAG is infrequently used by European constituents. In those cases where constituents exert influence to both IASB and EFRAG, they often use exactly the same comment letter. Concentrating on the drivers to participate, the data reveal that preparers, accountants and standard setters react significantly more when proposals have a major impact on the accounting numbers of a company. Users, stock exchanges and their supervisory authorities write significantly more comment letters when disclosure issues are at stake. Finally, participating preparers in the IASB's due process are larger and more profitable than non-participating preparers.
Standardization and harmonization of accounting practices is a fundamental element of a global business environment. Achieving this is a complex process that involves technical and political ...negotiation. The International Accounting Standards Committee (IASC) was the organization that pioneered this process on a world-wide basis. The IASC prepared the way for the International Accounting Standards Board (IASB) and its International Financial Reporting Standards, which since 2005 have held the dominant influence over the financial reporting of thousands of listed companies in the European Union, as well as in many other countries. The forces and influences that shaped the formation of the IASB were intimately connected with the historical organization and operation of its predecessor, the IASC, and so to understand the standards enforced in financial reporting today, a historical understanding of the IASC is required. Financial Reporting and Global Capital Markets does just this. It examines the history of the IASC from 1973 to 2000, including its foundation, operation, changing membership and leadership, achievements and setbacks, the development of its standards, and its restructuring leading up to the creation of the IASB in 2001. The book also studies the impact of the IASC's standards on national standard setting and on accounting practice in developed and developing countries, as well as the impact on the IASC of the policies and positions of the UN, the OECD, the US Securities and Exchange Commission, the International Organization of Securities Commissions, and the European Commission. It will be of vital interest to all concerned with accounting developments in a global environment, be they academics, policy-makers, or professionals. Available in OSO: http://www.oxfordscholarship.com/oso/public/content/management/9780199296293/toc.html
This study investigates whether reporting investment property at fair value using IAS 40 provides incremental predictive ability for future performance beyond historical cost. Specifically, this ...study examines whether recognizing incomes under the fair value model can predict a firm's future income more accurately than the historical cost model. Using a sample of Chinese real estate firms from 2007 through 2014, this study finds that reporting investment property at fair value provides better predictive ability for future income than historical cost. This study also determines that the predictability of income for future earnings under the fair value model increases with the size of accumulated changes in fair value gains and losses of investment properties. The results suggest that the recognition of fair value gains and losses of investment property in income statements can improve the predictability of a firm’s future income.
El IASC presentó en 1989 el documento denominado Marco conceptual, que establece conceptos que subyacen en la preparación y presentación de estados financieros para usuarios externos. El presente ...artículo tiene como objetivo formular algunas reflexiones críticas sobre él, buscando servir de pretexto para la discusión académica del mismo, a propósito del actual debate sobre la aplicación de las normas internacionales de contabilidad, y en el caso particular colombiano, sobre el cumplimiento de la Ley 1314 de 2009. Para esto, analiza aspectos positivos como introducción de nuevos modelos, y demuestra sus deficiencias, como las limitaciones en su aplicabilidad y el tratamiento limitado y ambiguo, que no logra dejar sentadas unas definiciones conceptuales, típicas de un marco conceptual.
The IASB has several projects on the equity method of accounting that involve the transfer of assets between an investor and its associate or joint venture. This paper provides a commentary on this ...issue by providing examples of alternative methods of adjusting for inter‐company profits. The underlying concepts for alternative approaches are discussed. The conclusion outlines the steps the IASB needs to take to resolve this issue.
The IASB has several projects on the equity method of accounting that involve the transfer of assets between an investor and its associate or joint venture. This paper provides a commentary on this issue by providing example of alternative methods of adjusting for inter‐company profits.
We examine the impact of IFRS adoption in New Zealand. We provide evidence from a single accounting standard, namely IAS 12, Income Taxes. We also adopt a case study approach by examining the ...line-by-line details of temporary differences arising from the adoption of IAS 12.
Comprehending Comprehensive Income Hodgson, Allan; Russell, Mark
Australian accounting review,
June 2014, Volume:
24, Issue:
2
Journal Article
Peer reviewed
Comprehensive income (CI) contains a mixture of realised, unrealised, temporary, persistent and recyclable elements. How, when and where these elements should be reported in income and equity have ...been issues intensively debated (and changed) by international regulators over the last 20 years. This article traces the major threads of the debate and places changes within the context of empirical academic research. Our contention is that the recent IAS 1 (AASB 101) Presentation of Financial Statements, effective 1 July 2012, has benefited from past academic research that focused on the value relevance from disaggregation and presentation of unrealised other comprehensive income (OCI). We conclude by outlining the equity posting and recycling to profit or loss (P&L) issues and assert that, because of the inconsistent nature and complexity of OCI, it would benefit from further research.
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