ADholakiya - AC558 Unit 1 Assignment

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Purdue Global University *

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AC558

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Accounting

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Jan 9, 2024

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AC558 International Accounting Standards and Global Financing Report Professor - David Adu-Boateng Unit 1 - Assignment Aneri Dholakiya 9/26/23 1. The New York Stock Exchange (NYSE) provides a list of non-U.S. companies listed on the exchange on its website www.nyse.com ). (Hint: Search the Internet for “NYSE List of Non-U.S. Listed Issuers.”)

A. There are over 530 international companies that are listed on the NYSE and 45 countries are represented B. Five countries with the largest number of foreign companies are Canada, United Kingdom, China, Brazil and Bermuda. C. Companies are going to the extent of having their companies' shares listed on the NYSE because it gives the investors a sense of trust and provides transparency. It also provides the non-US companies additional capital and can increase their liquidity. The countries can also get access to a larger capital market for having their companies listed on NYSE. (International Listings, n.d) 2. The various international accounting issues confronted by Besserbrau AG are exchange rates, tax variances, multiple compliance and standards, preparing consolidated financial statements, and tracking expenses and reports. Since the Besserbrau exports their products to China, the products will be sold to the foreign customers and therefore different currencies. So the company will have to translate China's currency (Yuan) into German currency (EURO). There will be different taxation rules and regulations, the company will have to follow those regulations and will have to consolidate the financials when the company is trying to consolidate and prepare the statements. There can be double taxation so they will have to make sure they know the rules and regulations for double taxation relief programs in each country. They will face issues with currency exchange rate which can fluctuate in the future. They will have to determine price according to the government regulation in the country and the capital market. To have an established company in China will take time for Besserbrau. They will have to establish effective controls over the operations and evaluate the performance of the company and the management for the company's growth and its success. (Doupnik et al., 2019) 3. The two companies I choose are Cravana Co. (CVNA) and Tata Motor Ltd. As far as the accounting principles for the domestic company, the company is responsible for providing the reports on the cash flow, operation and financials. There are 3 major financial statements required under GAAP: income statement, balance sheet and cash flow statement. The foreign company Tata Motor uses Indian Accounting Standards (IndAS). As far as the financial reports, there should be a minimum of balance sheets, statements of profit and loss, statements of cash flows and statements of change in equity and related notes. List five format differences in the companies’ income statements. 1. Different way of presenting the revenue and expenses 2. Different way on how operating expenses are classified 3. Different way in presenting non-operating income and expenses 4. Different way of presenting taxes

5. Extra items are treated differently List five format differences in the companies’ balance sheets. 1. Assets and liabilities are classified differently 2. long -term and short-term are presented differently 3. Deferred taxes are treated different 4. Minority interests are presented different 5. Goodwill and intangible assets are treated differently. There are terminology differences between the income statement and balance sheet. Some of the terminology differences I noticed were sales vs revenue and long-term liabilities vs non-current liabilities. Majority of the information provided on both companies' financial statements are similar. The note provided additional information about policies, expenses or contingencies. However, IndAS had more detailed information in the reports and the notes. To compare the overall presentation of the financial statements and notes to financial statements between the two companies, we would need to examine the layout and formatting of the financial statements. The US GAAP income statement is based on text only vs the IndAS includes graphics, more color and the information is broken down in sections with additional notes per section. 4. In what way does Nobe’s simplified model of accounting diversity appear to explain accounting developments that have occurred in Europe over the past three decades? Nobe’s simplified model of accounting diversity simplified the reason for international accounting diversity and the financing system. The reason why he simplified the accounting system is so that the common people can understand and realize the value, importance and have knowledge of accounting and finance. (Doupnik et al., 2019) 5. The Impact of Culture on Conservatism PART I In Gray’s mode, the culture of the country impact’s the accounting values which also impacts the rules and regulation. The way finances are reported and how they are practiced will also be impacted. If there are no cultural differences, the financial rules and regulations should not change from country to country. The company’s finances are based on the overall economy of the country. The economy of the country is based on the culture and its values. PART II

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