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Essay / Research Paper Abstract
This 4 page paper looks at the different influences that may be observed when comparing two companies the same industry which compiled their annual accounts under different accounting regimes. The paper compares IFRS and US GAAP. The bibliography cites 4 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEUSGAPIFRS.rtf
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Unformatted sample text from the term paper:
that company. In recent years there has been an increased level of convergence in terms of international accounting. Despite this, there are differences in the way accounts prepared dependent upon
the country which they take place. For example, looking at two companies in the same industry; British Petroleum (BP), and ExxonMobil, the accounts are prepared under different regimes. British Petroleum
is a UK company and the accounts prepared according to the International Financial Reporting Standards (IFRS), which is now applicable to all financial accounting that takes place for international companies.
By comparison ExxonMobil with the head office and main operations in the United States, uses the accounting regime laid down by the US GAAP.
There are a number of differences between the approaches which can result in significant changes in the way accounts presented. It is important that an investor can appreciate
these differences in understand how they will impact on a companys performance. When looking at these it is also important to note that the US GAAP is moving towards a
greater level of harmonisation with international accounting standards. For the United States accounting practices and move away from the US GAAP towards IFRS will face a number of barriers, even
these Securities and Exchange Commission (FTC) has backed the convergence between the US accounting standards and international standards, a move that surprised many commentators (Fulcrum Inquiry, 2007). By looking at
the differences it is possible to appreciate the way that this will impact on the accounts of two companies within the same industry.
When we consider the International Accounting Standards Committee, the system under which the British Petroleum accounts prepared we see that they do not only lay down guidelines regarding how accounts
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