Part A: IFRS Reporting Requirements
Much has been written in the press about the United States’ transition to the International Financial Reporting Standards (IFRS). Accounting professionals and company managers are concerned about convergence and its implications. Their questions include how the changes will affect their companies’ balance sheets and income statements.
For this portion of the project, you will evaluate the effects on the financial statements of moving from U.S. GAAP to IFRS. You will do this in the form of a four-page (double-spaced) analysis of the potential effects of converting your company to IFRS. Describe three areas of the selected company’s financial statements that will be impacted by the IFRS. As part of the discussion, including the contrast/comparison of U.S. GAAP to IFRSfor example, the differences in accounting and reporting of inventory under each standard. Your analysis must include the following:
A brief description of IFRS, its objective, and the general difference between IFRS and U.S. GAAP.
A general description of concerns or arising issues with the conversion (that is, a rule-based system versus a principle-based system).
A section in which you compare and contrast three areas of financial statements that would be impacted by the application of IFRS on the individual account balance and the reflection of these changes on the balance sheet or income statement.
Part B: Industry-Specific Reporting Requirements (Fifth Step of the Course Project)
Many industries have specific reporting standards that are necessary to present an entity’s financial position. For example, insurance companies must follow the accounting and reporting standards established by state insurance departments, including the application of SAP (Statutory Accounting Principles). Also, unique to this industry is the estimate of loss claims.
For this portion of the project, discuss the industry-specific reporting standards (in terms of accounting and regulation) of the company you have chosen to study. To do so, you must perform some external research, such as finding out the industry’s professional organization.
Submit a two-page (double-spaced) memo in which you complete the following:
Identify the company’s industry-specific reporting requirements, including the history and objective of these requirements.
Describe the organization responsible for establishing and regulating the reporting requirements of your company’s industry.
Describe the regulatory, ethical, and legal consequences of non-compliance with reporting requirements.
Identify emerging industry trends that will have an effect on the required reporting.