Chapter 1 Introduction 1
Learning objective 1
1.1 International Accounting Issues 1
1.1.1 Two examples 1
1.1.2 Additional requirements 6
1.1.3 International accounting language 6
1.2 The International Development of Double Entry System 8
1.3 The Development History of International Accounting 9
1.4 Definition of International Accounting 10
1.5 Content of International Accounting 13
1.5.1 Basic content 13
1.5.2 International accounting in recent years 13
1.6 The Growing Internationalization of Capital Markets 14
1.6.1 The growing internationalization of capital markets 14
1.6.2 The main international capital markets 15
1.6.3 Chinese publicly traded company worldwide 19
Terms of the Chapter 20
Discussion Questions 22
True or False 23
Multiple Choice 23
Case Analysis 25
Chapter 2 Development and Classification 31
Learning objective 31
2.1 Development 32
2.1.1 Factors influencing accounting development 32
2.1.2 Related factors 40
2.2 Classification 40
2.2.1 Deductive approach 41
2.2.2 Inductive approach 45
2.3 Conclusion 48
2.3.1 Stable classification of accounting systems 48
2.3.2 Accounting practice at the national level or transnational level 49
2.3.3 Many distinctions of accounting at the national level 49
2.3.4 Fair presentation vs.legal compliance accounting 49
Terms of the Chapter 50
Discussion Questions 52
True or False 53
Multiple Choice 53
Case Analysis 55
Chapter 3 Accounting in Developed Countries 59
Learning objective 59
3.1 Basic concepts 59
3.1.1 Accounting standards 60
3.1.2 Accounting standards and practices 60
3.1.3 Fair presentation and legal compliance accounting 61
3.2 France 62
3.2.1 Introduction 62
3.2.2 Accounting regulation and enforcement 64
3.2.3 Financial reporting 65
3.2.4 Accounting measurement 66
3.3 Germany 66
3.3.1 Introduction 66
3.3.2 Accounting regulation and enforcement 68
3.3.3 Financial reporting 69
3.3.4 Accounting measurement 70
3.4 Japan 70
3.4.1 Introduction 70
3.4.2 Accounting regulation and enforcement 72
3.4.3 Financial reporting 73
3.4.4 Accounting measurement 73
3.5 The Netherlands 75
3.5.1 Introduction 75
3.5.2 Accounting regulation and enforcement 76
3.5.3 Financial reporting 77
3.5.4 Accounting measurement 78
3.6 The United Kingdom 78
3.6.1 Introduction 78
3.6.2 Accounting regulation and enforcement 79
3.6.3 Financial reporting 81
3.6.4 Accounting measurement 81
3.7 The United States 82
3.7.1 Introduction 82
3.7.2 Accounting regulation and enforcement 83
3.7.3 Financial reporting 86
3.7.4 Accounting measurement 87
3.8 Comparison of Accounting Measurement 88
Terms of the Chapter 90
Discussion Questions 92
True or False 94
Multiple Choice 94
Case Analysis 96
Required 97
Chapter 4 Accounting in Emerging Market Countries 98
Learning objective 98
4.1 Introduction 98
4.2 Czech Republic 100
4.2.1 Introduction 100
4.2.2 Accounting regulation and enforcement 102
4.2.3 Financial reporting 104
4.2.4 Accounting measurement 104
4.3 Taiwan Area 104
4.3.1 Introduction 104
4.3.2 Accounting regulation and enforcement 106
4.3.3 Financial reporting 106
4.3.4 Accounting measurement 107
4.4 Mexico 107
4.4.1 Introduction 107
4.4.2 Accounting regulation and enforcement 109
4.4.3 Financial reporting 110
4.4.4 Accounting measurement 111
4.5 China 112
4.5.1 Introduction 112
4.5.2 Accounting regulation and enforcement 113
4.5.3 Financial reporting 116
4.5.4 Accounting measurement 117
Terms of the Chapter 117
Discussion Questions 120
True or False 121
Multiple Choice 122
Case Analysis 124
Chapter 5 Reporting and Disclosure 125
Learning objective 125
5.1 Accounting Measurement and Disclosure 125
5.2 Development and Disclosure 127
5.2.1 Voluntary disclosure 128
5.2.2 Mandatory disclosure 129
5.2.3 Voluntary vs.mandatory disclosure 130
5.2.4 U.S.SEC financial reporting debate 131
5.3 Reporting and Disclosure Practice 133
5.3.1 Forward looking information 133
5.3.2 Segment disclosures 135
5.3.3 Cash flow information 137
5.3.4 Social responsibility disclosure 138
5.3.5 Special disclosures for non-domestic financial statement users 139
5.3.6 Corporate governance disclosure 140
Terms of the Chapter 141
Discussion Questions 143
True or False 144
Multiple Choice 145
Case Analysis 147
Chapter 6 International Accounting Harmonization or Convergence 152
Learning objective 152
6.1 A survey of International Harmonization 152
6.1.1 Harmonization 152
6.1.2 Criticism and evaluation of international harmonization 154
6.2 International Accounting Standards Board 156
6.2.1 Before IASB and IASC's work 156
6.2.2 IASB's work 159
6.2.3 IASB's harmonization or convergence effort 160
6.3 International Federation of Accountants(IFAC) 162
6.4 International Organization of Securities Commissions(IOSCO) 163
6.5 European Union(EU) 164
6.5.1 EU directive 164
6.5.2 EU's standard-setting procedures 165
Terms of the Chapter 166
True or False 168
Multiple Choice 168
Case Analysis 171
Chapter 7 Foreign Currency Translation 173
Learning objective 173
7.1 Translation and Its Reasons 173
7.2 Translation of Transactions vs.Translation of Financial Statement 174
7.3 Selecting Foreign Currency Rate 175
7.4 Translation Methods 176
7.4.1 Current-noncurrent method 176
7.4.2 Monetary-nonmonetary method 177
7.4.3 Temporal method 177
7.4.4 Current rate method 178
7.4.5 Compare and contrast the features of four methods 179
7.5 Translation Gain or Loss 180
7.6 Translation Accounting Development and U.S.A Standards No.52 181
7.6.1 International accounting standards 181
7.6.2 Translation accounting development and U.S.A Standard No.52 182
7.6.3 Relationship between foreign currency translation and inflation 184
Terms of the Chapter 184
Discussion Questions 186
True or False 188
Multiple Choice 188
Case Analysis 191
Chapter 8 Changing Prices Accounting 193
Learning objective 193
8.1 Pricing Changing 193
8.1.1 Price change 193
8.1.2 Effect of historical cost measurement in an inflation environment 194
8.1.3 Reasons to recognize inflation's effect 196
8.2 General Price-level Adjustment 197
8.3 Current Value Accounting 198
8.4 International Perspective on Inflation Accounting 198
8.4.1 IAS 198
8.4.2 The United States 199
8.4.3 The United Kingdom 200
8.4.4 Some comments 201
Terms of the Chapter 202
Discussion Questions 203
True or False 204
Multiple Choice 205
Chapter 9 International Financial Statement Analysis 207
Learning objective 207
9.1 Introduction 207
9.2 Challenges and Opportunities in Cross-Board Analysis 208
9.2.1 The need of international financial statement analysis 208
9.2.2 Challenges and opportunities 210
9.3 Business Analysis Framework 210
9.3.1 International business strategy analysis 211
9.3.2 Accounting analysis 213
9.3.3 International financial analysis 216
9.3.4 Prospective analysis 218
Terms of the Chapter 218
Discussion Questions 220
True or False 221
Multiple Choice 222
Case Analysis 223
Chapter 10 The Governance of Multinational Enterprises 225
Learning objective 225
10.1 Corporate Governance 225
10.1.1 Corporate governance model 226
10.1.2 Corporate governance mechanism 227
10.2 International Importance of Corporate Governance 231
10.2.1 The features of poor corporate governance 231
10.2.2 Need for corporate governance 232
10.2.3 Development of governance codes 233
10.3 Multinational Enterprises(MNEs)Governance Practice 233
10.3.1 Good MNE governance practice 233
10.3.2 Benefit of good governance practice 234
10.3.3 Corporate governance scorecards 234
10.4 Multinational Enterprises(MNEs)Internal Control 235
Terms of the Chapter 237
Discussion Questions 238
True or False 239
Multiple Choice 239
Exercises 240
Chapter 11 International auditing 241
Learning objective 241
11.1 The Accounting and Auditing Profession 241
11.2 Global Audit Services and the International Auditing Challenge 243
11.2.1 Global audit services 243
11.2.2 International auditing challenge 243
11.3 Global Accounting Firms 247
11.4 International Auditing Standard 248
11.5 International Audit Reports 250
Terms of the Chapter 251
Discusses Questions 252
True or False 252
Multiple Choice 253
Exercises 254
Case Analysis 254
Appendix 256
Chapter 12 International Management Accounting 258
Learning objective 258
12.1 International Management Accounting 258
12.2 Costing System 259
12.2.1 Traditional costing system 259
12.2.2 Activity based costing(ABC) 259
12.3 Capital Investment Techniques 259
12.3.1 Payback period 260
12.3.2 Return on Investment(ROI) 260
12.3.3 Discounted cash flow techniques 261
12.4 Management Control 263
12.5 Currency Effect on MNEs 266
12.6 Multinational Performance Evaluation 266
12.6.1 Economic value added(EVA) 266
12.6.2 Balanced scorecard(BSC) 267
Terms of this Chapter 269
Discussion Questions 269
True or False 270
Multiple Choice 270
Exercises 271
Chapter 13 International Taxation and Transfer price 273
Learning objective 273
13.1 Differences in National Tax System 273
13.1.1 Types of taxes and tax rates 274
13.1.2 Tax burdens 279
13.1.3 Tax havens 279
13.1.4 International harmonization 280
13.2 Double Taxation 281
13.2.1 Foreign tax credit 282
13.2.2 Limits to tax credits 284
13.3 International Tax Planning 285
13.4 International Transfer Pricing 288
13.5 Transfer Pricing Methodology 290
13.5.1 Comparable uncontrolled price method 290
13.5.2 Resale price method 291
13.5.3 Cost-plus method 292
13.5.4 Comparable profits method 293
13.5.5 Profit split method 294
Terms of the Chapter 295
Discussion Questions 296
True or False 297
Multiple Choice 297
Exercises 299
Reference 301
Some Helpful Websites 308