Comparative Accounting

Comparative accounting

 

1 Terms and determination of accounting standards

Accounting standards are the regulations or rules (including also the laws and statutes) that govern the preparation of financial statements. Accounting standards can be considered as general guidelines for the preparation of financial statements are an official statement about certain accounting issues issued by regulatory authorities and applicable in a particular environment. Accounting standards generally consists of:

1. a description of the problems encountered

2. a logical discussion or how to solve the problem

3. associated with the decision / theory proposed a solution

Accounting standard setting involve a combination of private sector group that includes the accounting profession, users and compilers of financial statements, the employees and the public which includes agencies such as the tax authorities, ministries in charge of commercial law and capital market commission.

Accounting Standards in determining objectives:

1. Determination of the standard is that a social choice standard may benefit a particular party and harm others.

2. the need for accounting standards appears when there is disagreement

3. accounting information can affect the level of welfare use.

4. In determining the standard there are two approaches, namely:

a). representative faithfulness, this approach requires that the reporting is neutral and fair presentation of financial statements through the process of setting standards. This approach to accounting equates with the mapping process which maps should be accurate to describe the company's financial condition is fair.

b). economic consequences, this approach requires a standard asopsi have favorable economic consequences. This approach tends to lead to the determination of standards meemiliki positive influence.

2 Why the accounting practice is different from the standard defined

Standard accounting practice requires publicly traded companies to follow certain accounting rules when preparing the consolidated financial statements so that readers can easily compare different companies. Private companies are also often required by banks and shareholders, for example, to present information in accordance with the rules set them. Typically, the countries of civil law practice into a standard writing system and state law with English common law system has a private organization to set the rules.

Four (4) The reason why the practice is not in accordance with the standards, namely:

1. In most countries the penalty for noncompliance with the official accounting tend to be weak and ineffective

2. The company may voluntarily report more information than is required

3. Some states allow companies to ignore the accounting standards if by doing operations and financial position will be better tersajikan

4. In some countries accounting standards only apply to the separate financial statements and not to the consolidated report.

The reason for the practice of uniform

Lack of transparent accounting standards in several countries have been cited as increasing the difficulty of doing business in it. In particular, the Asian financial crisis in late 1990 was partly due to the lack of detailed accounting standards. Giant companies in several Asian countries were able to take advantage of accounting standards designed to cover bad debts and losses, which produce collective effects that eventually lead the whole region into financial crisis.

3 Accounting system in developed countries

Accounting systems are the methods and procedures for recording and reporting of financial information provided to the company or a business organization. The accounting system consists of documentary evidence of transactions, recording tools, reports and procedures that companies use to record transactions and report the results.

Here I will discuss six (6) accounting system in developed countries, consisting of:

Accounting system the United States

Accounting in the United States governed by the Private Sector (Badab GAAP / FASB), until 2002 the American Institute for Certified Public Accountants.

Accounting Regulations and Enforcement Rules

Accounting principles generally accepted (GAAP) consists of all standards, rules and financial regulations that must be considered when preparing financial statements, financial statements should present fairly the financial position and results of operations of an enterprise in accordance with accounting principles accepted secar public.

Accounting Measurement

Accounting measurement rules in the United States assumes that a business entity will continue to carry out its business. Accrual basis of measurements with a very broad and the recognition of transactions and events are highly dependent on the concept

Accounting system in the Netherlands

Accounting in the Netherlands has some interesting paradox. The Netherlands has the provision of accounting and financial reporting are relatively permissive, but the standards for professionalism is very high. The Netherlands is the country code of law, but accounting-oriented fair presentation. Financial reporting and tax accounting are two separate activities.

Accounting Regulations and Enforcement Rules

Regulation in the Netherlands remained so in 1970 when liberal laws enacted Annual Financial Report, the 1970 Act introduced a mandatory audit. The law also encourages the formation of Accounting Studies Three Parties (Tripaartif) (which was replaced by the Council's Annual Report on the Year 1981)

Accounting Measurement

The method used is the purchase method, goodwill is the difference between acquisition cost and fair value of purchased assets and liabilities. Dutch flexibility in accounting measurements can be seen with the permissibility of the use of present value for intangible assets such as inventory and assets are depreciated.

Accounting system in the UK

British heritage is very important for the world. Britain was the first country in the world to develop the accounting profession as we know it. The concept of presenting the results and financial position of the natural (true and fair view) is also from England.

Accounting Regulations and Enforcement Rules

The two main sources of financial accounting standards in the UK is the company's legal and accounting professions. Act of 1981 set out five basic principles of accounting:
Revenues and expenses should be matched according to the accrual basis
Postal assets and liabilities separately in each category of assets, and liabilities are assessed separately

Accounting Measurement

Britain to allow both methods of acquisition and mergers in the accounting records for the merger. However, the conditions of the merger method of use is so tight that it almost never used.

Accounting systems in Japan

Accounting and Financial Reporting in Japan reflects the combined influence of various domestic and international, to understand Japanese accounting, one must understand the culture, business practices and history of Japan. Firms - Japanese firms belonging akuitas share with each other, and often jointly own other companies. These investments are interlocked industrial conglomerate that produces meraksasa - known as keiretsu.

Accounting Regulations and Enforcement Rules

The national government still has the most significant influence on accounting in Japan. Accounting regulation is based on three laws - Law: Commercial Law, Capital Market Law and the income tax law firm. Commercial law is governed by the Ministry of Justice (MOJ), the law is at the core of accounting regulation in Japan and most have a major influence.

Accounting measurement

Commercial law firm requires large companies to prepare consolidated statements, the company recorded consolidated shares shall prepare reports in accordance with the SEL. Account is a separate company basis for consolidated reporting and general accounting principles as used for both. Consolidated subsidiary if the parent company directly and indirectly control the financial and operational policies.

Accounting System in Germany

In the early 1970s, the European Union (EU) began to issue harmonization directive, which must be adopted by member states into national law. EU directive fourth, seventh, eighth entirely into German law through the Comprehensive Accounting Act which came into force on December 19, 1985

Accounting Regulations and Enforcement Rules

Prior to 1998, the Germans did not have the financial accounting standard-setting functions as understood in English-speaking countries. Law on control and transparency in 1998 introduced the requirement to recognize a private entity that sets national standards.

Accounting measurement

GAS is more stringent when compared to HGB in the consolidated financial statements, Menurt GAS 4, revaluation methods should be used, while the assets and liabilities acquired in business combination must be revalued to fair value and the remaining excess was allocated to goodwill. Goodwill is amortized over a period no more than 20 years and tested for impairment annually.

Accounting system in France

France is a major supporter of national uniformity in the accounting world. Ministry of National Economy approved the General Plan Comptale (national accounting code) is the first official in September 1947. In the Year 1986, renana expanded to implement the provisions in the EU Seventh Directive on consolidated financial statements and further revised in 1999.

Accounting Regulations and Enforcement Rules

Five major organizations involved in standard-setting process in France is:
Counseil National de la Comptabilite ATAC CNC (National Accounting Board)
Comite de la Reglemetation Comptable or CRC (Akntansi Regulatory Committee)
Autorite des Marches financiers or AMF (Financial Markets Authority)
Ordre des Experts-Comtable or OEC (Association of Public Accountancy)
Compagnie Nationale des Comptes Commisaires aix or CNCC (Association of National Compliance Auditor)

Accounting Measurement

Accountancy in France has a double characteristic: The company must comply with the separate paraturan fixed, while the consolidation of business groups have greater flexibility. Accounting for individual firm legal basis for share dividends and compute taxable income.

4 Similarities and differences accounting system in developed countries

Accounting systems in developed countries certainly have similarities and differences with each other. The following are the similarities and differences in accounting systems in developed countries:

The taxation system

Countries like France and Germany using the company's financial statements as a basis for determining income tax debt, while countries like the United States and Britain to use financial statements have been adjusted by the tax code as a basis for determining the tax debt and delivered separately to the financial statements to shareholders .

The existence and importance of accounting profession

Accounting profession that is more advanced in developed countries also make the accounting system used by more advanced than in countries that are implementing a centralized accounting system and uniform.

Accounting education and research

Accounting education and research carried out less well in countries that are developing. Professional development is also influenced by education and the quality of accounting research.

The accounting rules

Accounting standards and rules set out in certain countries is certainly not entirely the same as other countries. Role in determining standards of professional accountants and accounting rules were more common in those countries wherewith to enter the professional rules in the rules of the company, such as in Britain and the United States. Meanwhile, Christopher Nobes and Robert Parker (1995:11) explains the presence of seven factors that lead to important differences in the development of international accounting systems and practices.

Such factors include :

(1) the legal system,

(2) the owner of the funds,

(3) the influence of the tax system

(4) stability of the accounting profession.

(5) inflation,

(6) accounting theory

(7) accidents of history.

The legal system

Company regulations, including in this case is the accounting systems and procedures, much influenced by the legal system in force in a country. Some countries such as France, Italy, Germany, Spain, the Netherlands adhere to the legal system that is classified in the codified Roman law. Codified in law, the rules associated with the basic idea of ​​moral and justice, which tends to be a doctrine. Meanwhile, countries like Britain, the United States and British Commonwealth countries adopted the common law. In common law, the existence of an attempted answer to specific cases and not make a general formulation.

Sources of funding

By source of funding, the company can be grouped into two. The first group is a company that gets most of the funds of the shareholders in the capital market (shareholders). The second group is a company that gets most of the funds of the bank, state or family funds. Generally, in countries with a majority of companies owned by shareholders but the shareholders do not have access to internal information, the more demands on the disclosure (disclosure), examination (audit) and get an unbiased (fair information).

Tax system

The extent to which the tax system may affect the accounting system is to look at tax laws determine the extent to which accounting measurement (accounting measurement). In Germany, books must be equal to the tax according to commercial accounting. Whereas in many other countries such as Britain, the United States and also includes Indonesia, there are rules - rules that differ between taxation and commercial companies. The most obvious example of this is depreciation.

Accounting profession

Bodies were formed as a container of different professions in each country, and the results of the rules or standards are affected by the shape, authority and members of such bodies. In some countries it was found that the separation of the accounting profession, as a tax expert or just as a corporate accountant. Members of a governing body of accounting standards may consist only of the public accountant or involve parties from business groups, industry, government and educators. The level of education and experience in the practical world as a condition of a person to become a member agency will also determine the quality of accounting standards and rules as the output produced.