International Financial Statement

Running head: INTERNATIONAL FINANCIAL STATEMENT
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Word Count: 3,029
Name of the Module Leader: Caesar Nurokina
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1INTERNATIONAL FINANCIAL STATEMENT
Table of Contents
Question One:..................................................................................................................................2
Requirement (a):..........................................................................................................................2
Requirement (b):..........................................................................................................................5
Question Two:.................................................................................................................................9
Requirement 1:.............................................................................................................................9
Requirement 2:...........................................................................................................................11
Question Three:.............................................................................................................................13
References:....................................................................................................................................17

2INTERNATIONAL FINANCIAL STATEMENT
Question One:
Requirement (a):
Intention of IASB and FASB convergence project:
With the rising completion and pressure for organisations to disclose favourable reports of
earnings, there has been potential for fraud owing to the ambiguity in revenue recognition
guidance. Therefore, it has become increasingly necessary for IASB and FASB in establishing a
unified group of accounting standards (Tschopp and Nastanski 2014). In January 2002, the
FASB initiated discussions on a main project for overhauling the current standards of revenue
recognition. The discussions started identification of the scope and objectives of the project,
which would lead to comprehensive guidelines for revenue recognition in different industries. In
June 2002, there has been addition of revenue recognition by IASB in its technical agenda. In
September 2002, a formal agreement was made between IASB and FASB for working in
collaboration on the project of revenue recognition along with sharing staff resources (Hashim,
Li and O’Hanlon 2016). The significant objectives of this convergence project are listed down as
follows:
Elimination of weaknesses and inconsistencies in the revenue requirements
To form international accounting standards needing comparability, transparency and
increased quality in financial reports (Angeloni 2016)
At the time of implementing international accounting standards, the needs of emerging
markets are to be taken into consideration
Convergence of different national accounting standards with the international accounting
standards
Creation of a robust framework so that revenue issues could be addressed effectively
(Moldovan 2014)
Enhancement in comparability of revenue recognition practices throughout industries,
organisations, capital markets and jurisdictions
Delivery of beneficial information to the financial statement users by using enhanced
disclosure requirements

3INTERNATIONAL FINANCIAL STATEMENT
Simplification of the preparation of financial statements by minimising the requirements
to be referred by an organisation (Ball 2016)
Current status of the project:
The scope of the convergence project has evolved with the passage of time. The
following table would show the present situation with the different projects. Some of the listed
projects are joint FASB-IASB projects, which are unofficially portion of the “Memorandum of
Understanding (MoU)” between the two boards. However, both the boards have agreed to work
in collaboration on the projects. On certain occasions, the projects have not been continued in the
form of joint projects and the IASB is carrying on with the project with its own right or it would
be taken into account for a longer-term research project of IASB. It is noteworthy to mention that
the convergence projects are on the verge of completion and there would not be any addition of
new projects on the agenda (Iasplus.com 2019).
Projects Status
Short-term convergence projects:
Cost of borrowings Reissuance of “IAS 23 Borrowing Costs” in
2008
Discontinued operations (only for IASB) Issuance of “IFRS 5 Non-Current Assets Held
for Sale and Discontinued Operations” in
March 2004
Fair value option related to financial
instruments (only for FASB)
Finished
Impairment Combined work on the project has not been
continued
Government grants Combined work on the project has not been
continued
Investment properties Active involvement of FASB in the project
Impairment Combined work on the project has not been