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Essay / Research Paper Abstract
This 5 page paper critically evaluates the potential impact of the movement towards international accounting harmonisation with the European Union's decision in 2004 to partially endorse International Accounting Standard (IAS) 39. The bibliography cites 4 sources.
Page Count:
5 pages (~225 words per page)
File: TS14_TEEUIAS39.rtf
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Unformatted sample text from the term paper:
of accounts in the various countries; creating an even playing field. However, the decision of the European Union (EU) to partially endorse IAS 39 is controversial due to the impact
it may have. Whilst creating a uniform environment it ma also be creating increase volatility. WE can look at this by considering the IAS and also looking to the way
a similar standard in the US was adopted and the impact it had, which the EU may see repeated. For companies which
undertake international transactions, buying or selling, there is always the risk of exchange rate fluctuations. These cause uncertainty and as such can create volatility in company results. The tool which
has often been used is that of hedging, we would expect this tool to be increasing in popularity again as the markets are becoming less predictable as a result of
increased political turmoil (de Chassart and Firer, 2004).However it appears this is not occurring, instead there is increasing complexity and fear over the use of hedging and the impact this
may have on the accounts as new regulations are adopted. Hedging is useful tool serves international business by reducing risk, but this
tool is under threat due to the new IAS 39 which will impact on all European countries and is similar to the FAS 133 regulation drawn up and in force
in the US (Johnson, 2004). IAS 39 is an international Accounting standard which is became compulsory for EU listed companies in 2005 (Deloitte, 2004) and has received partial endorsement
from the European Commission despite strenuous opposition form many banks especially those in France (Dombey and Parker, 2004). The difficulty is caused by the way hedging on foreign exchanges
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