International Accounting

Measurements tend to be consistent and translatable across countries, cultures, and languages. If an object's length is measured in feet in the United States, the measurement will need to be converted to meters for those in the United Kingdom to understand. The physical length stays exactly the same; the description of it is what differs. Time, temperature, weight, and distance are all other measurements that are consistent no matter the place and that simply have to be translated. However, value is a measurement that can vary widely within a single country and between countries. Costs and selling prices fluctuate for a number of reasons, which can result in problems when measuring in the same currency, and it's difficult to create an international standard for how to calculate cost. This text examines financial transactions where accounting rules have tried to solve this inconsistency problem and outlines global differences generally and on a country-specific level. Chapter 2 looks at the early business developments that indicated a need for a consistent international approach to setting accounting standards, covering the early 1700s to the 1990s. International differences within legal systems, tax systems, stock exchanges, and regulations are outlined. The development of International Accounting Standards (IASs) is summarized as well as how various countries have adopted IASs. The current International Accounting Standards Board (IASB) is also described, including the process of creating a standard and the IASB's structure and operation. The IASB has identified several financial statements that companies should provide in their annual reports and accounts; the statement of financial position, or balance sheet, is described in detail. The Conceptual Framework, inflation, and the problems they pose are also discussed.