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Book chapter
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Reference no. BEP8392
Chapter from: "A Nontechnical Guide to International Accounting"
Published by: Business Expert Press
Originally published in: 2019
Revision date: 29-Nov-2019

Abstract

This chapter is excerpted from 'A Nontechnical Guide to International Accounting'. In this book we explain the reasons why we have international accounting standards, the decision of the United States not to adopt international standards, and the main requirements of the standards that have been issued by the International Accounting Standards Board. Many countries now use international accounting for reporting their financial activities, and a knowledge of the standards is needed to understand the information these financial reports convey. Chapters 1 and 2 focus on the development of international accounting and the strategy of the United States. Each of the remaining eight chapters develops a theme based on the relevant standards. In Chapter 3, we examine those standards that determine the methods for calculating a company's profits and other income. Chapter 4 explains the Statement of Financial Position, also known as the balance sheet, and the Statement of Changes in Equity. The explanation of the main contents of the financial statements is completed by Chapter 5, which explains the Statement of Cash Flow. Chapter 6 to 9 focus on the details of differing business relationships and activities and the standard that regulate these. Herein are included topics such as financial reporting in hyperinflationary economies, agricultural businesses, foreign exchange rates, and fair value measurements. Finally, Chapter 10 concentrates on financial instruments, which comprise a fast-moving area that has caused the standard setters some difficulties in determining the appropriate regulations. In explaining international standards, we have concentrated on using common business language instead of the technical terms used in the standards. We have also referenced key sources for those who wish to pursue their studies further.

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Abstract

This chapter is excerpted from 'A Nontechnical Guide to International Accounting'. In this book we explain the reasons why we have international accounting standards, the decision of the United States not to adopt international standards, and the main requirements of the standards that have been issued by the International Accounting Standards Board. Many countries now use international accounting for reporting their financial activities, and a knowledge of the standards is needed to understand the information these financial reports convey. Chapters 1 and 2 focus on the development of international accounting and the strategy of the United States. Each of the remaining eight chapters develops a theme based on the relevant standards. In Chapter 3, we examine those standards that determine the methods for calculating a company's profits and other income. Chapter 4 explains the Statement of Financial Position, also known as the balance sheet, and the Statement of Changes in Equity. The explanation of the main contents of the financial statements is completed by Chapter 5, which explains the Statement of Cash Flow. Chapter 6 to 9 focus on the details of differing business relationships and activities and the standard that regulate these. Herein are included topics such as financial reporting in hyperinflationary economies, agricultural businesses, foreign exchange rates, and fair value measurements. Finally, Chapter 10 concentrates on financial instruments, which comprise a fast-moving area that has caused the standard setters some difficulties in determining the appropriate regulations. In explaining international standards, we have concentrated on using common business language instead of the technical terms used in the standards. We have also referenced key sources for those who wish to pursue their studies further.

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