Methods used to measure economic activity differ around the world.
Benefits of adoption of a single set of globally accepted accounting standards:
• Increased quality of information available to investors.
• Reduced costs of compliance for companies that are
currently using multiple reporting frameworks.
• Enhanced global capital markets.
• Improved access to capital in the global markets.
• Enhanced comparability across companies for users.
What major change did the SEC allow in 2008 with respect to IFRS?
a. U.S. registrants are required to use IFRS.
b. Foreign registrants are now required to use U.S. GAAP if their shares are traded in the U.S.
c. U.S. registrants may use IFRS without reconciliation to U.S. GAAP.
d. Foreign registrants may use IFRS without reconciliation to U.S. GAAP.
What major change did the SEC allow in 2008 with respect to IFRS?
a. U.S. registrants are required to use IFRS.
b. Foreign registrants are now required to use U.S. GAAP if their shares are traded in the U.S.
c. U.S. registrants may use IFRS without reconciliation to U.S. GAAP.
d. Foreign registrants may use IFRS without reconciliation to U.S. GAAP.
Determine the functional currency and understand the ramifications of different functional currency designations.
Determination of the Functional Currency (1 of 3)
Two major issues that must be addressed when financial statements are restated from a foreign currency into U.S. dollars:
• Which exchange rate should be used to translate foreign currency balances to domestic currency?
• How should translation gains and losses be accounted for? Should they be included in income?
