International Finance: Accounting Standards, Risks, and Institutions

This report provides an overview of international finance, delving into the core concepts and objectives of developing international accounting standards. It explores relevant accounting standards for specific financial situations, including valuation of inventories and non-current assets, and the application of accounting concepts and conventions. The report also evaluates the implications of adopting accounting standards, emphasizing the importance of making financial statements specific and reliable. Furthermore, it highlights the key features of international finance, such as foreign exchange risk, political risk, expanded opportunity sets, and market imperfections, along with a brief mention of major institutions within the international financial environment. The report concludes by emphasizing the significance of international financial accounting rules and fundamentals in maintaining ethical order within an organization. The report uses references from various authors to support the information.

International Finance

Covered content
• Introduction
• Objectives of developing international accounting standards
• Relevant accounting standards for specific financial
situation.
• Value and importance of marketing role in TUI
• Conclusion
• References

Introduction
The term international finance can be defined as a branch of
financial economics that is related to the monetary and macro
economic relation between two or more then two nations.

Objectives of developing international
accounting standards
International accounting standards(IAS)- The international
accounting standards are being replaced by international
financial reporting standards in year 2001. These standards
are related to the providing the equal language for all
business transaction. The purpose of these accounting
standard is to making the accounting statements comparable
and understandable in all around the world.

Relevant accounting standards
for specific financial situation
There are different kind of accounting standards which are
applicable on various kind of financial situations. Herein,
below some accounting standards are mentioned below:
Valuation of inventories- To evaluate the inventories there is a
specific accounting standard which is international accounting
standard 2 (Cairncross, 2016).

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Purchase cost- This cost includes taxation charges, transport
expenses as well as handling expenses.
-Conversion cost- It includes fixed and variable cost.
-Other costs- Apart from these costs some other costs incurs
such as cost of bringing inventories in their present location.

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So these are the costs which are included during the
measurement of stock. Apart from these there are some
cost that should not be considered for valuation of stock
which are as follows:

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◦ Cost of storage.
◦ -Selling expenses.
◦ -Abnormal wastage.
◦ -Cost of interest.
◦ So this is the way by which inventories are valued by
considering and not considering above mentioned

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Valuation of non current assets- For valuation of non current
assets such as plant, machinery etc. is done by internation
accounting standard 16.
IAS 16- According to this accounting standard the non current
assets should be valued at their cost. This accounting standard
was reissued in December, 2003.

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Application of accounting concepts and conventions- In this
international accounting standard 1 is applicable. As per this
accounting standard financial statements must be well structured in
accordance to the accounting concepts. This standard was reissued
in September, 2007. Basically, the main objective of this standard is
to ensure about the whether accounting concepts and conventions
are applied or not

Evaluation of implication of
accounting standards
This is necessary for the organisations to adopt suitable
accounting standards. This is why because on due to this
companies can make their financial statements more specific
and reliable. Such as in the above mentioned company, luxury
chocolate limited they apply the accounting concepts and
standards in their financial statements.

Key features of international finance and
major institutions of international
financial environment
Foreign exchange risk- This is the main feature of the
international finance. Eventually, it is necessary for the
managers to understand about concept of international finance.
Political risk- This is an another feature of the international
finance. As per this, in the international finance the political
risks act as an important factor.

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Expanded opportunity sets- This is a kind of feature of
international finance that is related to the defining about when
companies go at the world level
Market imperfection- This is the last feature of the
international finance that defines about the difference among
countries laws, taxation system etc.

Conclusion
From the above presentation it can be concluded that
international financial accounting rules and fundamentals are
essential to maintain ethical order with in organistion.

References
Frieden, J., 2015. Banking on the world: the politics of
American international finance. Routledge.
Melvin, M. and Norrbin, S., 2017. International money and
finance. Academic Press.
Cairncross, A., 2016. Inflation, Growth and International
Finance. Routledge.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business.
Routledge.

Thank You