Let us make an in-depth study of the meaning, need and major forces of harmonisation of accounting. Harmonisation is a process of increasing the compatibility of accounting practices by fixing the limits to their degree of variation. Harmonisation carries a wider meaning than standardization although it is sometimes being used inter changeably. In a simplest way harmonisation means not only bringing out uniformity by reducing alternatives and differences in procedures by setting specific bounds, but embraces a blending and combining the elements of accounting practices of various countries into an orderly structure.
Harmonization of International Accounting Standards Harmonization of International Accounting Standards Need for Harmonization of International Accounting Standards Introduction As there has been a tremendous growth in the market place with the existing accounting practices, this leads us to question why do we need harmonization of International accounting standards, what are its advantages and what are the barriers that hinder harmonization?
Although accounting may be the "language of business," a common language has never been necessary -- at least as long as the world economy consisted of a set of more or less distinct national economies. Mednick Cited in: We now have a global economy and it has affected the entire business world.
Commodity prices, interest rates and currency exchange values have become internationally linked -- with the result that governments around the world are increasingly supporting harmonization of accounting practices and national policies.
Bisgay and Jayson Harmonization is necessary because standard national financial statements are virtually useless; financial markets in more regulated countries are threatened with a loss of market share; and multinational corporations must prepare multiple reports for different nations they do business in.
Nobes and Parker Cited in: Iqbal, Melcher and Elmallah Financial information is a form of a language. And if the language of financial information is to be put to use, so that investment and credit decisions can more readily be taken, it should not only be intelligible, it should also be comparable.
Belkaoui These new environmental factors of the global economy, the international monetary system, the Multinational Corporation and foreign direct investment create an environment in which business transactions, their conduct, measurement and disclosure, takes new and distinctive form that call for a specific accounting sub discipline or the harmonization of accounting practices.
Advantages of Harmonization Turner The greatest benefit that would flow from harmonization would be the comparability of international financial information. Such comparability would eliminate the current misunderstandings about the reliability of foreign financial statements and would remove one of the most important impediments to the flow of international investment.
Choi, Frost and Meek Harmonization wouldHarmonization of financial statements refers to financial reporting that is based on international accounting standards that are accepted across the globe.
The international business community recognized the need for uniform accounting standards. This has been necessitated by of the spectacular growth in the number.
Examine the Advantages and Disadvantages for China of Harmonization of Accounting Standards Under the Current Economic and Social System. Examine the advantages and disadvantages for China of harmonization of accounting standards under the current economic and social system.
announced that Australia would adopt the accounting standards issued by the International Accounting Standards Board (IASB) from (Baxter ). After the first of July , the new standards (IFRS) start to use across national border. companies would be required to report current results under IFRS and restate recent results.
Harmonisation - The desire by the IASB to harmonise accounting is the triumph of hope over experience - Louise Franklin - Essay - Business economics - Accounting and Taxes - Publish your bachelor's or master's thesis, dissertation, term paper or essay.
The Need For Harmonization Accounting Essay Introduction. This report will provide a brief history and background on the process of harmonization in the European Union with regards to the 2 methods it employed: Directives and IFRS adoption.
A very well written essay, however as the topic of the essay specifies it should have been a good idea if the writer had inculded bits to do with the steps taken towards harmonization of policies, for instance the EU impact, IASB, SEC the effect on to tax systems/5(9).