Ifrs Impact on Reserves in Oil and Gas

Topics: International Financial Reporting Standards, Balance sheet, Financial statements Pages: 3 (572 words) Published: April 28, 2013
III. Chapter III – Int’l Convergence of Financial Reporting A. Harmonization of standards (de jure) vs. practice (de facto) B. Arguments FOR harmonization - Comparability is necessary for globalization of capital markets 1. External users

a. Easier to evaluate foreign securities for investment or takeover b. Reduce costs of listing on foreign exchanges
c. Increases foreign investor confidence
2. Internal users
d. Reduce cost of consolidation reporting
e. Simplifies auditing
f. Increases mobility (and therefore utility) of accounting personnel 3. Increase the quality of accounting practice internationally C. Arguments AGAINST harmonization
4. Difficulties due to nationalism
5. Unnecessary (global market exists already)
6. Standards overload
7. Not all firms have the same reporting needs
8. Not all environments require the same accounting system

D. Harmonization efforts
9. International Organization of Securities Commissions (IOSCO) g. Works for better regulation of securities markets h. Facilitates cross-border securities offerings 10. International Federation of Accountants (IAFC)

i. Wants international standards of auditing, ethics, education and training j. Formed the International Forum on Accountancy Development (IFAD) and the International Auditing and Assurance Standards Board (IAASB) to promote compliance and high-quality performance by accountants 11. European Union (EU)

k. Wants to create a unified business environment l. Wants harmonization of laws, taxation, freedom of movement of goods and labor, and a community capital market m. 4th Directive - harmonized valuation, disclosure, and format of statements n. 7th Directive - required and harmonized...
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