1.) Over the past 10 years, FASB and IASB have been meeting to discuss a new revenue recognition model. Currently, there are two approaches to revenue recognition being proposed: (1) the measurement model and (2) the allocation model.
2.) Consider the two approaches to standard setting: principles versus rules. Which approach will produce the most truthful financial statements? Go to FASB and IASB websites to explore their approaches in more detail. Then give key points on each side of the argument using revenue recognition as an example. Be sure that your response also provides an explanation of the theoretical basis for both methods.
3.) Case scenario: Japanese GAAP vs. Chinese Convergence
Research and compare the convergence of China’s financial reporting standards with U.S. GAAP or IAS GAAP since 1999 and respond to the following questions:
What societal values and economic goals have caused the two Asian countries to adopt different financial reporting standards?
What societal values and economic goals have caused the two Asian countries to improve similar international financial reporting standards?
4.) Chapter 7 in International Accounting focuses on foreign currency and hedging. Why might a company prefer a foreign currency option rather than a forward contract in hedging a foreign currency firm commitment? Why might a company prefer a forward contract over an option in hedging a foreign currency asset or liability? How could this create a problem for a U.S. company where you may be employed?
5.) What are the major differences in the calculation of income between the historical cost (HC) model and the current cost (CC) model of accounting? Explain the justifications for using each of the aforementioned cost models. Provide your analysis of which method provides for more accurate calculation of income.
6.) How do international accounting standards help financial statement analysis? Discuss the relevance to international financial analysts and foreign investors of additional disclosures by multinational companies with regard to corporate strategy and related issues. Why is information relevant to future prospects likely to be of interest to international financial analysts and foreign investors? What are the constraints on multinational companies providing such disclosures in the professional practice field?
7.) In a world of global markets, we have to work with the governments of multiple countries when it comes to taxation. Under what conditions would a company apply for a correlative adjustment from a foreign tax authority? What effect do tax treaties have on this process?
8.) In Germany and China separate institutions established by law carry out the roles of public accounting and auditing. What is the impact of this professional practice on the usefulness of international accounting in Germany and China? Discuss the problem of international segment identification, making reference to the strengths and limitations of current international audit regulation and practice.