Current Developments in Accounting Thought: Report and Analysis

This report presents an analysis of current developments in accounting thought, focusing on two key areas. The first part examines an article from the IAS plus website concerning the European Securities and Markets Authority (ESMA), specifically its 22nd enforcement decisions report. The report dissects the article, highlighting ESMA's role in enforcing International Financial Reporting Standards (IFRS) and its implications for financial assertions. It also discusses the applicability of positive and public interest theories in understanding accounting regulations. The second part analyzes a Financial Accounting Standards Board (FASB) exposure draft related to income statement improvements and comprehensive earnings reporting. It evaluates comments from four firms, assessing their perspectives on the proposed changes and their potential impact on accounting standards. The report aims to provide insights into the ongoing evolution of accounting practices and the regulatory frameworks that govern them. It offers a detailed overview of the challenges and advancements in financial reporting, providing a comprehensive analysis of the subject.

Running head: CURRENT DEVELOPMENTS IN ACCOUNTING THOUGHT
Current Developments in Accounting Thought
University Name
Student Name
Authors’ Note

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Answer 1:
News article selected for the study
The news article “ESMA publishes 22nd enforcement decisions report” has been selected for
the current report. This article is taken from the official website of IAS plus. An image of the
chosen professional article is presented herein the appendix segment for reference.
Elucidation of important facets presented in the professional news article
The report takes into consideration the article pronounced “ESMA publishes 22nd
enforcement decisions report” on April 30, 2018. Fundamentally, the chosen article considers
the “European Securities and Markets Authority” and presents declaration on specific
extracts that are derived from varied databases associated to specific enforcements. These
enforcements are in particular carried out by different European decision enforcers. There are
certain groups who are in charge of management of diverse decisions associated to varied
standards and regulations of accounting that are necessarily inclusive of diverse directives.
The primary concern that is emphasized in the current report includes pronouncement of
ESMA related to diverse information that is obtainable from diverse sources of data that are
necessarily private in nature ("ESMA publishes 22nd enforcement decisions report", 2018).
The data presented in pronouncements are associated to enforcements on financial assertions.
In itself, there are certain specific issues associated to the acquaintance and awareness
regarding the degree of fortification of convergences of particular management and issuers
related to the ones who utilizes financial data for implementation of regulations stipulated
under International Financial Reporting Standard (abbreviated as IFRS). In addition to this,
the professional news article has been selected for addressing specific disclosures of
decisions associated to particular enforcements. This can address different respondents in the

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market and the treatment and systems of accounting associated to European enforcements. In
essence, this might potentially take into consideration compliance with accounting standards
prescribed by IFRS. Essentially, there are diverse categories of standards and regulations of
accounting that is within the purview and range and are the ones that are approved by IFRS.
Thus, the important issues can be considered to be inclusive of complete understanding of
illustrations as well as standards of IFRS illustrated in EEA ("ESMA publishes 22nd
enforcement decisions report", 2018). The current report elucidated in detail regarding the
European enforcers of financial assertions analysis and consequently addresses pecuniary
assertions. However, it can be hereby observed that assertions are explicated by varied issuers
with specific securities that are normally traded in a specific market that is fortified and is
positioned in Europe and distinctly the ones that can organize the financial assertions as per
necessities of IFRS.
Furthermore, the article under deliberation intends to analyse overall extent and degree of
compliance to IFRS standards linked to specific requirements that are implemented for
reporting. Essentially, ESMA designed a confidential catalogue of information for distinct
decision associated to enforcements by different enforcers. The enforcers make use of the
database for the purpose of nurturing fitting integration of IFRS directives and standards
("ESMA publishes 22nd enforcement decisions report", 2018). The chosen article under
consideration also intends to address specific disclosures and specific decisions of
enforcements that are formulated for addressing varied partakers associated to the current
market taking into account accounting treatment. Basically, the article also focuses on
analysis of whether different treatments used in system of accounting can be considered to be
within the range recognized as well as permitted by the IFRS regulations. In addition to this,
ESMA also considers pronouncements of particular decisions as per intentions of the same.
Thus, this component can be considered to be supportive in the process of stable application

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of standards of IFRS particularly within EU (European Union) ("ESMA publishes 22nd
enforcement decisions report", 2018).
Analytical evaluation as well as deconstruction of specific issues pronounced in the article
There are different topics that are covered under this segment and are discussed in detail in
this article. The accounting standard that is covered under the purview of enforcement
discussed in the chosen article include IFRS 5 reflecting to different non-current assets that
are primarily preserved for sales as chiefly discontinued actions consisting of subjects on
classification of asset ("ESMA publishes 22nd enforcement decisions report", 2018).
However, it can be hereby witnessed that particular information can be added in this piece of
illustration that has been taken into account. In particular, this permits analysis of assets or
else the batch/group that is at disposal and is maintained necessarily for sales and are not
specifically depreciated. This is enumerated at a relatively smaller value of carrying as per
fair value by deducting particular cost that is related to the market.
The article mentions that IAS 7 is also taken into consideration in this article. In essence, this
orients around illustration along with disclosures regarding restricted as well as limited
balance of cash. Essentially, this article also takes in IAS 32 that indicates towards financial
instruments and emphasized on manner of presentation ("ESMA publishes 22nd enforcement
decisions report", 2018). The current article under deliberation hereby addresses various
significant notes that can be elucidated as liabilities that are presented in the particular
section. In addition to this, this article is also inclusive of the standard IAS 1 that discusses
about prioritizing disclosures presented in financial statements. in addition to this, IAS 36
also mentions about asset impairment that in turn helps in illustrating in thoroughly about
particular rough calculation that are linked to prices that carries significant risk and directs
the way to material adjustments linked to particularly carrying. Again, IFRS 13 focuses in

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calculation of fair value and on the other hand IAS 38 focuses on intangible assets that
illustrate purchase price intent of specific cluster of assets that are acquired. Furthermore, it
can be observed that IFRS 17 expounds distribution of diverse sections to shareholders.
Additionally, IAS 10 concentrates on financial statement consolidation. In particular, this
segment concentrates on augmentation of power of control over specific issuer to specific
offer provided to the tender ("ESMA publishes 22nd enforcement decisions report", 2018).
Recognition of a specific range of applicable accounting notions
As rightly indicated by Conner (2016), positive theory refers to particular rules as well as
directives that emphasizes about modifications, processes of elimination along with
development as per institutional integration of varied directions that are specifically related to
the sector. In essence, this is said to influence corporation and consumer interests plus self
interests of varied controlling agencies are taken into account for addressing regulatory
approach. In essence, there are various interest groups of predominantly customers as well as
makers who might even engage in clashes with each other for getting political advantages.
Fundamentally, this specific model can be associated to the current professional article under
deliberation since this document regarding enforcement that is inclusive of different
regulations necessarily exerts influence on corporations, interests of clients as well as varied
regulators. The article by ESMA links to positive theory of regulation as this help to analyse
the emergence, modification along with abolishment together with institutional execution of
industry specific directives. Also, this positive theory can be associated to this specific article
as this notion of positive theory can assess why the specific regulation happens. Particularly,
these notions of regulation comprises of theories of power of market, different theories on
interest groups that illustrate interests of shareholders in regulation.

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Again, it can also be hereby witnessed that public theory can be also associated to the present
article under consideration. As rightly indicated by Conner (2016), public theory refers to
perception regarding well being. Essentially, this helps in explanation of empirical
validations that are available for the specific directive under consideration. Also this theory
indicates towards the market with specific features, that might possibly become unproductive
and might undergo failure is not rectified with specific regulations.
In addition to this, the theory has instituted an important assumption related to features of
diverse regulators, use of complete data and fitting enforcement. In essence, this notion even
relates to enforcements of the schemes that are obligatory for enhancement of welfare. Thus,
this article that has been elucidated can be appropriately comprehended by way of
implementation of theory on public interest and as per rules of positive theory (Birkland,
2015).
In this regard, it can be said that an important issue of the public interest notion is that
analysing, the normative notion of economic welfare is utilizing positive explanatory notion
of regulation.
Conclusion
The above mentioned report based on the article helps in gaining comprehensive
understanding regarding decisions of enforcement that is pronounced by ESMA. In this
context, it can be said that this theory can aid in carrying out analysis of decisions regarding
enforcements associated to particular declarations with the intention of developing
convergence of particularly management and illustrating varied issuers with relatable data on
appropriate integration of standards and directives of IFRS.

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Answer 2:
Executive Summary
The current report explains development of particular comments and proposals presented by
Financial Accounting Standards Board –FASB. The draft taken into consideration is the
“Proposed accounting principles and update in the assertion of income and system of
reporting earnings. In essence, these proposals are offered for acquiring feedback through
comments. However, there are different firms that have set forth their comments on the
specific draft and have expressed either their endorsement or disapproval. In essence, four
different firms out of all the firms are selected for the study under consideration. The
opinions of the four firms presented in the form of comment letters are analysed for gaining
an understanding regarding justification of implementation of the selected exposure draft in
reality.
Specification of comment letter
Specific comment letters presented by the firms are taken into consideration for the current
report and an image of the same is attached in the appendix. The current proposal is prepared
as well as presented in relation to particular suggestions on standards/directives of accounting
and consequently generates the base of augmentation of income statement as well as system
of reporting of comprehensive earnings.
Introduction
The draft prepared stresses on particular updates that can be carried out in the
pronouncements for income and the report that can be designed for the comprehensive
earnings. In essence, this can subsequently aid in generating a superior income assertion and
in this way all the transactions within the income assertion can be analysed in an effectual

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manner. In essence, this development is necessary for eradicating all the errors present as
well as intricacies involved in the process of developing and at the same time comprehending
the declaration of income. As such, this can prove to be supportive in development of a
process of effectual designing an income pronouncement and thereby help in better disclosure
of comprehensive earnings of businesses.
Analysing whether the exposure draft is satisfying public interests
This report concentrates on the comments of four different firms and their opinions presented
regarding the exposure draft under consideration pronounced by the FASB. Essentially, this
report has aided in generation of idea regarding analytical appraisal of the feedback of the
companies presented in the comment letters. The feedback or in other words the comments
can necessarily help in designing a precise solution that can be obtained by means of
appraisal of the accounting regulations (Patten, 2014). Thus, this specific mechanism can
prove to be supportive in responding to diverse issues. Moreover, this study also has the aim
of presenting guiding principles associated to system of accounting that subsequently can
assist in development of effectual standards for particularly accounting. Furthermore, this
piece of writing also has intention to analyse diverse comments concerning agreement or
disagreement of firms regarding the alterations proposed in the draft. This in turn can help in
arriving at a conclusive outcome regarding efficacies of standard/regulation of accounting
(Šodan & Aljinović Barać, 2017).
Essentially, this report can aid in elucidating updates and systems of reporting of income in
the income assertions. Subsequently this can assist in shielding as well as protecting
sentiments of business concerns and this in turn can help in augmentation of level of
efficiency of different functionalities of the firm and preservation of stable bond between
firms. As such, this can change the whole state of affairs of business. Thus, different sorts of

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enhancement and updates linked to development of disclosure policy of accounting can be
illustrated in an effective way. Seyam & Brickman (2016) mentioned that regulations of
accounting along with standards addressees knowledge, perception, thoughts and ideas and
this aids companies belonging to different industries to come forward and put forth their
views in the comment letter. Okamoto (2017) suggests that the comments presented in
response to questions regarding the draft can act as a form of feedback. Therefore, this can be
regarded as an effectual procedure that can help in analysing the pros and cons of the
proposal from the viewpoint of corporations and in the course help in enrichment of public
interests. The pertinent as well as relatable questions that are mentioned in the format
pronounced by FAAB are expounded illustratively by means of comments expressed (Huber,
2015). Also, it can be hereby observed that business concerns face accountability of
expressing their opinions in the form of comments on questions presented in the form and
explicate reason behind their disagreement/agreement to the proposal. Essentially, responding
to numerous questions presented in the draft can also help in protection of interests of
particularly public.
Critical appraisal of comments presented in the letter
Essentially, it can be hereby mentioned that comments acquired from the firms chosen for the
study can help in developing notions, ideas and awareness regarding consent or disapproval
concerning suggested changes in regulation/directive of accounting. It is in this way, the
comments from the firm can be taken into consideration in this present study.
The Goodyear Tire and Rubber Company
The Goodyear Tire & Rubber Company is an USA based transnational tire manufacturing
firm established during the year1898. The company produces tires for particularly
automobiles, industrial trucks, motorcycles, SUVs (sports utility vehicles), light trucks,

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airplanes, cars for racing, farm apparatus as well as heavy earth-mover equipment. Analysis
of the comments presented by this company replicates the fact that the company is not in
support of the proposal offered by FASB. They have cited the fact that reclassification of
assets along with necessities of transition can show the way to larger tax balances that is
stranded and can mar the very purpose of the alteration proposed. However, The Goodyear
Tire & Rubber Company although disapproves the proposal, they are in favour of the system
of backward tracing that is necessarily proposed in the present draft. This is because the
company believes that the company can eliminate stranded amount of tax and their influences
from the arrangers of statement of firm’s earnings (Deegan, 2014).
Chevron Corporation
Chevron Corporation is an USA based transnational energy firm that engaged in
delivering oil, geothermal energy sectors, natural gas counting exploration as well
as production of hydrocarbon; marketing, refining, chemicals manufacturing, transport and
distribution, sales; plus generation of power. Analysis of comment of the firm Chevron
Corporation reveals the fact that this firm has necessarily replied to all the framed questions.
Also, the comment letters reflects sanction of the company regarding reclassification of
assets. The company has approved the premise of reclassification of assets along with
proposition of early adoption. However, regarding proposed date, the company has expressed
its nod in this regard as well. It can be mentioned hereby that as regards reclassification, the
company sanctions the proposal however expresses its concern over tax alterations in
different international subsidiaries that can necessarily be affected by stranded amount of tax
(Deegan, 2014).
American Banker’s Association

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The American Bankers Association (also referred to as ABA) is a USA based association of
trade for the entire banking industry of U.S. Established in the year 1875, this firm reflects
banks of different sizes as well as charters, counting community banks, local along with
money centers. In addition to this, this entity also reflects diverse savings associations,
mutual savings as well as trust firms with the mean member bank possessing roughly assets
worth $250 million. In essence, the principal activities of this entity is lobbying, expertise
plus professional development for varied member institutions, preservation of best exercises
along with industry standards, education of consumers and proper distribution of varied
financial products/services. In essence, this particular entity has the intention to detect all the
concerns as well as issues associated to banks functioning in the United States of America
and processes of preservation of the effectual structure (Conner, 2016). As per the draft
presented by the Financial Accounting Standards Board associated to the current topic, it can
thus be asserted that the association has appreciated overall opportunity to deliver their
comment on the draft. They have provided their opinion regarding the planned regulation or
in other words directives of accounting along with present guidance on system of accounting
and accounting practices. They are of the view that accounting practices can generate a worth
in firm’s proceeds acquired along with the outcomes achieved. In essence, this can misdirect
the financiers and impose heavy burden on firm’s administration. However, the modifications
undertaken cannot aid banks in their functionalities as the amount of tax that is necessarily
stranded can influence bank’s capital (Buchholz, 2015). Based on the viewpoints presented
by the firm it can be hereby said that the company does not sanction the proposal mentioned
in the draft as they are of the view that these kinds of challenges in standards of accounting
and financial transactions of different business corporations or else banks can be adversely
affected. Subsequently, operations of these entities can also get unfavourably affected.
The Travellers Companies Inc

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The Travellers Companies Inc that operates by offering causality and products or else
services related to insurance of property to individuals as well as business presents their
opinion in the comment letter. This company has supported the current draft as they are of the
view that this guidelines mentioned in the draft can help in addressing distress of
shareholders linked to current control of GAAP that talks about deferred tax (both tax assets
as well as tax liabilities) (Birkland, 2015). In addition to this, this company also presents their
approval regarding planned ASU that calls for the necessity of reclassification of assets
particularly from gathered comprehensive earnings.
relevance of theories to particularly comment letters
As mentioned by Anderson et al., (2016), Public interest theory of explains rules that in turn
can protect the interests and deliver assistance and do good to public on the whole. Basically,
this notions can be linked to welfare that certainly presents validation for explicit rules. In
relation to the theories, regulations and policies of firms added to other economic facets show
the way towards encouragement of interest of the community (Hoogervorst & Prada, 2015).
Predominantly, in this circumstance, proposition for alteration has the plan to add to financial
announcement and lessen stress and work pressure on essentially determined accountants. As
a result, concept of public interest view can necessarily be considered to be on the whole
effective in this circumstance because this specific proposal also intends to shields and
defends interests as well as welfare of the community (Baudot et al., 2017). For that reason,
the idea of Public interest is an economic theme linked to welfare that can help in theoretical
validation for rules/regulation and can be regarded to be the most efficient theory in this
context.

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References
Anderson, U. L., Doxey, M. M., Geiger, M. A., Gist, W. E., Janvrin, D. J., & Polinski, P. W.
(2016). Comments by the Auditing Standards Committee of the Auditing Section of
the American Accounting Association on FASB Exposure Draft of Proposed
Accounting Standard Update: Notes to Financial Statements (Topic 235): Assessing
Whether Disclosures Are Material: Participating Committee Members. Current Issues
in Auditing, 10(2), C1-C9.
Baudot, L., Roberts, R. W., & Wallace, D. M. (2017). An examination of the US public
accounting profession’s public interest discourse and actions in federal policy
making. Journal of Business Ethics, 142(2), 203-220.
Birkland, T. A. (2015). An introduction to the policy process: Theories, concepts, and models
of public policy making. Routledge.
Buchholz, A. K. (2015). A New Reporting Landscape on the Horizon. The CPA
Journal, 85(6), 6.
Conner, B. (2016). FASB exposure draft highlights flexibility in financial statement
presentation. Healthcare Financial Management, 70(3), 34-38.
Deegan, C. (2014). An overview of legitimacy theory as applied within the social and
environmental accounting literature. Sustainability accounting and accountability,
248-272.
Deegan, C. (2014). Financial accounting theory (4th ed.). McGraw-Hill: Sydney.
Du, N. (2016). Why isn't comprehensive income comprehensible?. Strategic Finance, 98(5),
46.

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ESMA publishes 22nd enforcement decisions report. (2018). Retrieved from
https://www.iasplus.com/en/news/2018/04/esma-enforcement-decisions
Fetterman, A. L. (2015). Commentary on FASB's Proposed Changes to Nonprofit Financial
Statements: Change Is Welcome, but Some Conclusions Should Be Revisited. The
CPA Journal, 85(10), 13.
Hoogervorst, H. A. N. S., & Prada, M. I. C. H. E. L. (2015). Working in the public interest:
The IFRS foundation and the IASB.
Huber, W. (2015). Public Accounting and the Myth of the Public Interest.
Okamoto, N. (2017). Norm entrepreneur lobbying and persuasion: A case study involving the
IASB's modification of an exposure draft. Research in Accounting Regulation, 29(2),
129-138.
Okamoto, N. (2017). Norm entrepreneur lobbying and persuasion: A case study involving the
IASB's modification of an exposure draft. Research in Accounting Regulation, 29(2),
129-138.
Patten, D. M. (2014). Environmental disclosure as legitimation: Is it in the public interest?.
In Accounting for the public interest(pp. 201-215). Springer, Dordrecht.
Seyam, A. A., & Brickman, S. (2016). The new requirements relating to going concern
evaluation and disclosure provide a critical improvement to the financial statements
taken as a whole. International Journal of Business and Economic Development
(IJBED), 4(1).

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Šodan, S., & Aljinović Barać, Ž. (2017). The role and current status of IFRS in the
completion of national accounting rules–Evidence from Croatia. Accounting in
Europe, 14(1-2), 40-48.

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Appendix
Appendix
Appendices 1

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Appendices 2

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Conclusion
In the end it can be said that relevance as well as significance of the proposal under
consideration can be analysed from the comments presented by the firms. The current draft
under deliberation can be said to be significant for varied modifications as well as
amendment for particularly income assertion and change of system of reporting earnings.
Thus, it is said to improve firm’s pronouncements of income and direct towards attainment of
superior outcomes.