Chapter 2 - Worldwide accounting diversity. After completing this chapter, students will be able to: Provide evidence of the diversity that exists in accounting internationally, explain the problems caused by accounting diversity, describe the major environmental factors that influence national accounting systems and lead to accounting diversity,. | Chapter Topics Evidence of accounting diversity. Reasons for accounting diversity. Problems caused by accounting diversity. Accounting clusters. The influence of culture on financial reporting. The reason for international differences in reporting. Further evidence of accounting diversity. Learning Objectives 1. Provide evidence of the diversity that exists in accounting internationally. 2. Explain the problems caused by accounting diversity. 3. Describe the major environmental factors that influence national accounting systems and lead to accounting diversity. Learning Objectives 4. Describe a judgmental classification of countries by financial reporting system. 5. Discuss the influence that culture is thought to have on financial reporting. 6. Describe a simplified model of the reasons for international differences in financial reporting. 7. Categorize accounting differences internationally and provide examples of each type of difference. Worldwide Accounting Diversity Differences in accounting and financial reporting rules between countries. For example: Accounting for Goodwill . -- goodwill is not amortized, but is written down only if impaired. Japan and Korea – goodwill is amortized over its useful life not to exceed twenty years. Learning Objective 1 Worldwide Accounting Diversity Asset revaluation . -- upward revaluation of fixed assets is not generally allowed. European Union publicly traded companies are free to choose between two different methods for valuing their assets. Learning Objective 1 Worldwide Accounting Diversity Inflation Accounting . (and many other countries) -- financial statements are not adjusted for inflation. Latin American countries -- experience significant inflation, so financial statements are adjusted for changes caused by inflation. Learning Objective 1 Additional evidence of differences in accounting between countries Form 20-F Required by the SEC for companies using . GAAP (unless they use IFRS). Reconciles net | Chapter Topics Evidence of accounting diversity. Reasons for accounting diversity. Problems caused by accounting diversity. Accounting clusters. The influence of culture on financial reporting. The reason for international differences in reporting. Further evidence of accounting diversity. Learning Objectives 1. Provide evidence of the diversity that exists in accounting internationally. 2. Explain the problems caused by accounting diversity. 3. Describe the major environmental factors that influence national accounting systems and lead to accounting diversity. Learning Objectives 4. Describe a judgmental classification of countries by financial reporting system. 5. Discuss the influence that culture is thought to have on financial reporting. 6. Describe a simplified model of the reasons for international differences in financial reporting. 7. Categorize accounting differences internationally and provide examples of each type of difference. Worldwide Accounting Diversity Differences .
