International Accounting 7th Edition Frederick D. S. Choi, Gary K. Meek - Solutions

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What is the primary basis and what is the secondary basis of segment reporting by Nestle?
Discuss some alternative bases for identifying geographical segments. What criteria could you use to support your choice?
What explanations might there be for BMW’s approach to geographical segment iden¬ tification?
Critically evaluate the meaning and significance of the geographical segments identified by BMW and the segment information disclosed. How useful is financial statement analysis based on these segments likely to be?
Why do you think BMW would disclose segment information voluntarily when there is no compulsion to do so?
What are the advantages of a “matrix” approach to segment reporting?
Is it possible to rely on international capital market pressures to stimulate the dis¬ closure of useful segment information by MNEs, or is more focused and detailed regulation necessary?
If the risks of operating in a foreign country (e.g., Mexico) are high, should MNEs be required to disclose information about the operations and assets involved even if they comprise a relatively minor part of the total, for example, 5 percent?
To what extent are MNE concerns that segment reporting will give rise to com¬ petitive disadvantage likely to be justified? Discuss specific situations and items of information.
Discuss the major problems concerning the content and presentation of segment information that have been identified in practice.
Critically evaluate the costs of segment reporting.
Critically evaluate the benefits of segment reporting with particular reference to the results of predictive ability and stock market research.
Discuss the likely effects on Multigroup’s financial statements of the decisions made con¬ cerning the treatment of subsidiaries, the joint venture, the associated corporations, and the recent acquisition. How do you think the securities markets would react to the dis¬ closure of consolidated
Discuss the possible alternative treatments of goodwill in the case of the recent Bizcorp acquisition, making special reference to U.S. and U.K. GAAPs. What is your recom¬ mended treatment?
Discuss the possible alternative accounting treatment for Multigroup’s associated cor¬ porations. What is your recommended treatment?
Discuss the possible alternative accounting treatments of Multigroup’s joint venture in the Netherlands. What is your recommended treatment?
Discuss the possible alternative accounting treatments of Multigroup’s subsidiaries, making special reference to U.S., U.K. and IASC GAAPs. What is your recommended treatment?
How can international accounting standards be enforced?
Should the IASB have the authority to set international accounting standards or should standards be the outcome of a more collaborative/consultative exercise?
If the goal is “uniformity,” how can the “right” answers be found?
Should international accounting standards be set on the basis of a philosophy of “uniformity” or a philosophy of “mutual recognition,” where some differences are tolerated?
Should international accounting standards be set for the world or be restricted to MNEs interested in raising finance from international investors?
Discuss the problems and prospects of enforcing IAS.
Why are many MNEs voluntarily adopting IAS rather than U.S. GAAP?
Discuss the advantages and limitations of the IOSCO endorsement.
How can global pressures for international accounting harmonization be recon¬ ciled with local pressures for addressing national needs and priorities?
Discuss the likely future of the European Union’s involvement in accounting stan¬ dard-setting in a global context.
Under what circumstances could voluntary disclosures give rise to a competitive advan¬ tage rather than disadvantage?
Explain and discuss the relevance of the information items disclosed in the intangible assets scoresheet. How would you interpret the changes from 1997-98 to 1998-99?
Discuss the reasons why Infosys might want to disclose additional information voluntarily.
In groups of three or four students, select three major companies from different countries with operations in oil and gas field or pharmaceuticals. Access information about their social responsibility and environmental disclosures from annual reports, Web sites, and other pub¬ lic sources. Prepare
Why is information relevant to future prospects likely to be of interest to financial analysts and investors? What are the constraints on MNEs providing such volun¬ tary disclosures in practice?
Discuss the kinds of information you would like to see in the corporate review, the operations review, and the financial review sections of an MNEs directors’ report.
Are MNEs always likely to have a competitive advantage relative to smaller domes¬ tic companies with respect to information disclosures about their business activi¬ ties?
In which countries are stock exchange disclosure regulations most stringent? less stringent? What are the reasons for this?
To what extent are information disclosures by MNEs in directors’ annual reports, as opposed to the financial statements, likely to be useful to financial analysts and investors?
Explain the reasons for the different results and discuss how these differences might be resolved.
Calculate the returns on equity for 1997 and 1998 under both Australian GAAP and U.S. GAAP. (Note: Use the stockholders’ equity figure as at June 30, 1997 and 1998 for the purpose of calculating 1997 and 1998 returns.)
Calculate the “conservatism” index for net income and stockholders’ equity for 1997 and 1998
Does it appear that German GAAP are more or less conservative than U.S. GAAP? How can you explain your findings?
Calculate the “conservatism” index and returns on equity for 1992 and 1993 under both German and U.S. GAAP.
Identify and discuss the major differences between U.S. and German account¬ ing principles.
Discuss the arguments for and against Daimler-Benz listing its shares in the United States.
To what extent are the results likely to affect your assessment of the comparative riski¬ ness of investing in Hanson and ICI?
Calculate the debt-equity (leverage or gearing) ratio for both corporations under both U.K. and U.S. GAAPs.
To what extent do the results affect your assessments of comparative corporate per¬ formance?
Does it appear that U.S. GAAP is more or less conservative than U.K. GAAP? What could be the main reasons for this?
Calculate the “conservatism” index and returns on equity for Hanson and ICI for the period 1986-90 under both U.K. and U.S. GAAPs.
Why are the Swiss so conservative and secretive in their accounting?
What are some major differences in disclosure between Switzerland and the United States as brought out in this case?
Why is the consolidation issue so tricky here?
What are the major problems Jack faces in trying to evaluate this investment opportu¬ nity?
What might Tom do to assess the true financial position of this company?
In this specific case, what conditions or factors in Japan might be causing the puzzling financial analysis results?
In general, what are the problems with applying one country’s standard financial analy¬ sis techniques to the analysis of financial statements of a company from another country or with making other comparisons to firms in other countries?
Do you think it inevitable that pressures for the globalization of measurement principles and practices will overcome local environmental and cultural influ¬ ences? If so, when?
If accounting principles around the world are harmonized, will this necessarily eliminate the diversity of earnings measurements practices?
How desirable are reconciliations such as those required under the SEC’s Form 20-F regulations for foreign corporations?
To what extent is it possible for investors to cope with international accounting dif¬ ferences without making any adjustments or reconciliations to their home country GAAP?
Comment on the relevance and reliability of your findings.
Locate each country in Gray’s “Authority and Enforcement” and “Measurement and Disclosure” frameworks. How do the countries compare?
Identify and compare each country’s societal and accounting values
Form into small groups and have each group select two countries from different culture areas(as defined by Ffofstede).
Which countries have the greatest potential for accounting change? What are your reasons for thinking this?
What are the prospects for the global convergence of accounting systems?
To what extent are countries changing with respect to national cultures and “accounting values”?
Where does your country fit in terms of “professionalism/statutory control” “Uni¬ formity/Flexibility,” “Conservatism/Optimism,” and “Secrecy/transparency”?
To what extent do you think culture explains the relative importance of stock exchanges and professional accounting associations around the world?
Do cultural influences impact more on accounting measurement compared to dis¬ closure practices?
To what extent is the strong/weak equity market distinction a useful way to iden¬ tify different patterns of accounting development?
Form into groups of three or four students and have each group select two countries for comparison from different regions of the world. Using a variety of country sources assess: (1) the major factors influencing accounting development in each country, (2) the relative importance of these factors.
How important a constraint on change are national cultural differences likely to be? Are cultures themselves changing? In what way?
What international pressures for change in accounting do you think are going to be most important during the early years of the twenty-first century?
How important is the stock market in your country? Is it getting more important? If so, how and why?
How is the business and cultural environment changing in your country? Are interna¬ tional factors becoming more important? Is accounting changing in response to changes in environmental influences? If so, in what way and with what effect?
Referring to Exhibit 1-6, which geographic region of the world, the Americas, Asia-Pacific, or Europe-Africa-Middle East is experiencing the most activity in foreign listings? Do you expect this pattern to persist in the future?Please explain.
Refer to Exhibit 1-8, which lists factors relevant for choosing an overseas market for listing or raising capital. Which factors might have been relevant in E-centives’ decision to raise capital and list on the Swiss Exchange’s New Market?
Why do you believe E-centives chose not to raise public equity in the United States? What are the potential drawbacks related to E-centives’ decision not to raise capital in the U.S. public markets?
What are the advantages and disadvantages to E-centives of using U.S. GAAP?
Should the SWX Swiss Exchange require E-centives to prepare its financial statements using Swiss accounting standards?
Learn more about the New Market at the SWX Swiss Exchange’s Web site (http://www.swx.com). What are the listing requirements for the New Market? What are the financial reporting requirements?Does E-centives appear to fit the profile of the typical New Market company?
Describe the problems characterized in this case.
What are the likely causes of these problems?
What are consequences of these problems for investors, Czech companies, and the Prague Stock Exchange?
Outline a program of changes needed to correct the problems identified.
Document the effects of the GAAP differences in the 20F by doing the following:a. For the current year, calculate the percentage change for net income and for total shareholders’ equity indicated by the reconciliation and using the non-U.S. GAAP(i.e., IFRS) numbers as a base.b. Repeat the same
Should a U.S. reader of non-U.S.financial statements find this SECmandated reconciliation useful?
Based on your analysis of the sanofi-aventis 2006 limited restatement, do you support the SEC’s decision to exempt companies using IFRS from the reconciliation requirement? Why or why not?
Document the effects of the GAAP differences in the 20F by doing the following:a. For the current year, calculate the percentage change for net income and for total shareholders’ equity indicated by the reconciliation and using the non-U.S. GAAP(i.e., IFRS) numbers as a base.b. Repeat the same
Should a U.S. reader of non-U.S.financial statements find this SECmandated reconciliation useful?
A 100 percent–owned foreign subsidiary’s trial balance consists of the accounts listed as follows. Which exchange rate—current, historical, or average—would be used to translate these accounts to parent currency assuming that the foreign currency is the functional currency? Which rates
Go to the Web sites of the International Accounting Standards Board (www.iasb.org) and the U.S.Financial Accounting Standards Board (www.fasb.org). Compare and contrast the two boards in terms of their composition and standard-setting processes.
Why is so much attention paid to convergence between International Financial Reporting Standards(IFRS) and U.S. GAAP and not to convergence between IFRS and other national accounting standards?What evidence is there of the direction of convergence: Is U.S. GAAP converging to IFRS, are IFRS
U.S. companies must use U.S.GAAP in their financial statements, not IFRS. Why should U.S. accountants, analysts, and others involved in financial reporting need to know about IFRS?
Will the IASB and FASB eventually merge, or will they remain separate accounting standard-setting bodies?Why do you say so?
Exhibit 8-3 identifies current IASB standards and their respective titles.Required: Using information on the IASB Web site (www.iasb.org) or other available information, prepare an updated list of IASB standards.
The IASB Web site (www.iasb.org) summarizes each of the current International Financial Reporting Standards.Required: Answer each of the following questions.a. In measuring inventories at the lower of cost or net realizable value, does net realizable value mean:i. estimated replacement cost, or ii.
However, by the consolidation date, the Saudi Arabian riyal depreciates such that the new spot rate is$1.00 = SAR4.125.Required:a. Assuming no transactions took place before consolidation, what would be the translation gain or loss if Armaselah’s balance sheet were translated to dollars by the
On December 15, MSC Corporation acquires its first foreign affiliate by acquiring 100 percent of the net assets of the Armaselah Oil Company based in Saudi Arabia for 930,000,000 Saudi Arabian riyals.(SAR). At the time, the exchange rate was $1.00 = SAR3.750.The acquisition price is traceable to
No transactions occur during the year.Required:a. Calculate total assets reported by Company A and Company B at the beginning and at the end of the year. Which company has a gain and which has a loss for the year?b. Does your answer to parta. make sense?Would it matter if Companies A and B intended

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International Accounting 7th Edition Frederick D. S. Choi, Gary K. Meek - Solutions

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