Comparative characteristics of international accounting models. International accounting models Differences between continental and American accounting models
THE SIGNIFICANCE OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) AND THE DEVELOPMENT PROCEDURE
1. Characteristics of existing accounting models.
2. Procedure for the development and implementation of IFRS.
3. Use of IFRS in the Russian accounting system.
1. Characteristics of existing models accounting
There are many accounting models in the world. Their differences are caused by both historical, political, economic and geographical conditions in which enterprises of different countries operate.
Thus, in countries with a large number of investors and creditors, whose composition is quite diverse, and the owners of companies are increasingly separated from operational management, financial and accounting information is the most important source of data on the welfare of the company. In these countries (Great Britain, USA), financial statements are aimed at the information needs of investors, creditors and are highly analytical. In other countries (Switzerland, Germany, Japan), financial policy is determined by a small number of very large banks that satisfy a significant part of business needs. The information necessary to justify additional financial investments is formed in the process of direct contacts between interested parties. In this case, reporting is aimed at protecting the interests of creditor banks. The financial statements here are less detailed and are prepared taking into account the principles of conservatism in asset valuation. In countries where governments play a decisive role in the management of national resources (France, Sweden) Accounting focused on the needs of state planning bodies. Firms are forced to follow strict accounting and reporting standards.
The accounting system of a country may depend on its international socio-economic relations. Accounting technologies are exported and imported. Thus, the United States has a significant influence on Canadian accounting practices, due to geographic proximity and close economic ties. Also, American accounting standards are widely used in Japan, which is explained by the expansion of Japanese capital to America. Great Britain (metropolis) has a significant influence on the development of the theory and practice of accounting in its former colonies. Among them are Australia, New Zealand, Malaysia, India, etc.
There is an approach according to which all countries, depending on the type of legislation and the degree of its influence on the practice of accounting, are divided into two groups:
having an extensive code of laws
with legislation of general legal orientation
In the first case, the laws are strictly deterministic in nature, representing, in fact, a series of prescriptions - "You must." Accounting standards are elevated to the rank of state laws, while accounting procedures are detailed and fairly strictly regulated. The main task of accounting in these countries is the calculus state taxes and control over their full payment. Among these countries are Argentina, France, Germany (in accordance with Article 71 of the Constitution of the Russian Federation, accounting rules are established by the state).
The second group of countries is limited by a set of common law laws, which is a series of restrictions - "You must not." Laws of this type, as it were, indicate the limits within which the enterprise operates. Accounting standards in these countries are not regulated by the state, but are determined by professional organizations of accountants. These standards are more flexible and subject to various innovations.
Taking into account all the conditions affecting the accounting system in different countries, 4 accounting models are distinguished.
British-American – is based on meeting the information needs of small and medium-sized investors in highly developed stock markets. It is characterized by the maximum degree and quality of information disclosure, as well as a relatively low degree of government intervention. This model is used by Great Britain, the USA, the Netherlands.
continental model Banks are the main investors. This model is followed by most European countries - France, Germany, Denmark, etc., as well as Japan. The business of these countries is closely connected with banks, which satisfy the basic financial needs of companies. Accounting is regulated by law and is highly conservative.
South American model – clearly focused on the needs of the state, primarily tax. The countries of this model are characterized by greater uniformity and less complexity of reporting, as well as developed mechanisms for accounting for inflation. Used in the countries of the southern continent of America - Argentina, Brazil, Chile, Uruguay, etc.
Islamic model - is used by countries such as Turkey, Iran, Pakistan, etc. They build their legislative systems under the influence of theological ideas. So, since usury is prohibited in the Koran, accounting documentation cannot show the mechanism of financial non-operating profit. At the same time, the resources and debts of companies are recorded at market prices.
Three groups of countries can be distinguished with similar cultural and economic situations and similar approaches to the accounting and reporting system. This allows you to combine national accounting systems, classifying them according to a number of features. Leading scientists from various countries are engaged in the classification of accounting and reporting systems. In our domestic literature, three models of accounting systems are usually distinguished:
- · Anglo-American;
- · Continental;
- South American.
Characteristic features of accounting models
Anglo-American model
- · Orientation of the reporting, first of all, on needs of investors and creditors of the enterprise.
- Professional regulation of accounting methodology is applied, not state regulation
- The task of providing information support to the needs of the state in the face of tax authorities is taken out of the system financial accounting and preparation of financial statements.
- · Calculation of the real financial result of the enterprise activity of the enterprise activity is of particular importance.
- · In the leading countries of this model, securities markets are well developed, there is a high professionalism not only of accountants, but also of users of accounting information.
continental model
- · Accounting reporting is focused on meeting the needs of tax and other public authorities.
- · Accounting is regulated by law, is characterized by considerable conservatism and a high degree of state intervention in accounting practice.
- · Orientation of financial statements to the needs of investors is not a priority.
- · The accounting practice of one country differs significantly from the accounting practice of another.
- The business has close ties with banks
South American model
- · In general, accounting is focused on the needs of state and tax authorities.
- · Accounting is regulated by law.
- · Accounting methods used by enterprises are fairly unified.
- A distinctive feature of these countries is the adjustment financial statements on the rate of inflation.
Anglo-American model
Countries using this accounting model include: Australia, Great Britain, Israel, USA, and other countries.
The basic principles of this model were developed in Great Britain and the USA, with the participation of Holland. The main idea of this model is the orientation of accounting to the information needs of investors and creditors. In countries using this model, securities markets are well developed, through which, to a greater extent, financing of organizations is carried out. They are also distinguished by the high level of the vocational education system. This model is not characterized by strict accounting regulation. It is the most flexible and liberal. The largest number of countries in various parts of the world gravitate towards it. However, in all countries of this model, the influence of the United States and Great Britain is great.
continental model
This model is used in most European countries: Australia, Italy, Denmark, France….. and Japan. Common to this model is the greater dependence of organizations on bank lending which is reflected in the concept of accounting. Orientation to the management needs of creditors (unlike the Anglo-American model) is not a priority for accounting. The continental model is characterized by fairly strict state regulation and is conservative. Relevant regulations regulated the activities of professional accounting organizations and audit rules. The accounting system is aimed at meeting the macroeconomic needs of planning, regulation and taxation. Accounting practices in one country may differ materially from those in another. Chart of accounts can be single or professional. Level of training professional accountants quite high, but the professional accounting organizations themselves play a smaller role than in England and the USA.
South American model
This model is used by: Argentina, Brazil, Peru, Chile and other countries in this region. They are united by language. With the exception of Brazil (Portuguese), these are Spanish speaking countries. In addition, these countries have common economic problems, primarily inflation.
The main difference between this model and those described above is the permanent adjustment of the impact of accounting data on inflation rates. Inflation accounting is traditional in Latin American countries, while Argentina, Brazil, Uruguay and Chile have introduced inflation accounting standards and national legislation. In these countries, the official index of the general price level is used as the main adjustment index, on the basis of which data on equity capital and fixed (non-current) assets are recalculated, inventories are revalued at replacement cost. Liabilities in foreign currencies are recalculated at the exchange rate at the end of the reporting year.
In general, accounting is focused on the needs of state and tax planning bodies, and the accounting methods used by enterprises are quite unified.
State bodies in these countries practically regulate the accounting methodology. Professional bodies of accountants do not have any significant influence on the methodology and practice of accounting.
The distribution of countries and regions according to the above models is shown in the table.
Table number 1. Three Basic Organizational Accounting Models
South American model |
||
Australia Bahamas Barbados Bermuda Botswana Great Britain Venezuela Dominican Republic |
Zimbabwe Indonesia Ireland Cayman islands Colombia Malaysia |
Netherlands New Zealand Pakistan Papua New Guinea Puerto Rico Singapore Tanzania Trinidad and Tobago |
Anglo-American-Dutch model |
||
Philippines |
Central America Sri Lanka |
South America |
continental model |
||
Ivory Coast Bulgaria Burkina Fasso Germany |
Luxembourg Norway |
Portugal Sierra Leone Switzerland |
South American model |
||
Argentina Brazil |
Paraguay |
It should be noted that the above division is very conditional. For example, accounting regulation in Japan follows the continental model, but at the same time, the influence of the United States is strong, which is an objective consequence of the interpenetration of the capitals of these countries into each other's economy. In addition to those listed, some countries use mixed systems with local specifics. As a result of the collapse of the socialist camp in the countries that previously belonged to it, transformations in the field of accounting are being carried out, and they perceive one or another model or are guided by international standards.
Topic: Essence and characteristics of the international accounting and reporting system.
Characteristics of international and national accounting systems.
1.2 Purpose of international accounting standardization.
1.3 International professional accounting organizations, their role and purpose.
1.4 The need to create an international accounting and reporting system.
Characteristics of international and national accounting systems.
Improving the accounting system in the most developed countries world occurred during the formation of economic relations and the rise of production. In each country, this process has developed at different rates and in different periods and, as a result of this, at present there are no two absolutely identical accounting systems. As a result, by the end of the 1960s, more than a hundred national accounting systems had been formed in the world.
The national accounting system is represented by national standards that reflect the trends and directions of development of accounting in each country. It is characterized by a set of methods used to evaluate accounting objects, reflect business transactions and business processes in accounting, systematize approaches to the content of financial reporting forms and ways to control the activities of enterprises.
The national accounting system is a mechanism for solving economic problems as a result of the development, adoption and strict observance of legislative acts that allow making managerial decisions.
The organization of accounting in the country is influenced by two groups of factors: objective and subjective. Objective factors reflect the peculiarities of the development of the national economy. Their influence can be assessed through the analysis of the regulatory framework in force in the state.
Subjective factors determine the choice of the most optimal methods of accounting in the current regulatory framework. Their impact can be assessed as a result of studying the accounting policies of the enterprise.
Legal regulation of the accounting system in the state is ensured by:
the presence of national standards developed in accordance with international principles and taking into account the peculiarities of the development of the national economy;
law on accounting and reporting;
national chart of accounts accounting;
accounting (financial) reporting system;
the regulatory framework governing industry-wide and intra-industry aspects of accounting;
accounting policy of a business entity.
Study of trends in the development of accounting in different countries allows you to understand how the problems of accounting practices are solved in different economic conditions, and why the methods and concepts of accounting differ from country to country. As the differences in accounting practices in different countries became more and more apparent, the first attempts to classify national accounting systems appeared in professional accounting circles.
The proposed classifications are based on various criteria and approaches. Among them, the groupings based on the definition of the "sphere of influence of the mother country" received the greatest recognition; on the analysis of accounting methods; on the assessment of the type of legislative system; on the use of various methods for evaluating accounting objects and methods for presenting reporting data, and others.
However, the main determining criterion influencing the formation of the most common approaches to the organization of accounting is the nature of the development of capital markets. The main function of a developed capital market is to provide business entities with additional financial resources.
In the economy of any state, the inflow of additional sources of financing is carried out through loans from financial institutions (state and commercial), free capital of legal entities and individuals (investors) and targeted financing from state bodies. By providing their financial resources, each owner (investor) seeks to obtain the maximum benefit and guarantees of return. Therefore, using for the purposes of classification of accounting systems this criterion, Muller, Gernon and Meek in 1994 divided all the leading countries of the world into four groups and identified, respectively, four accounting models:
British-American (Great Britain, USA, Netherlands, Canada, Australia, etc.);
continental (Germany, Austria, France, Switzerland, Italy, etc.);
South American (Brazil, Argentina, Bolivia, etc.);
mixed economy model (countries of Eastern Europe and states of the former USSR).
British-American accounting model(dominated by accounting systems in the UK, US and the Netherlands) operates in a developed financial and equity markets. It is focused on the interests of small and medium-sized shareholders-investors. The accounting methodology is determined by an independent professional community, after which the accounting standards are approved by law, and their observance is mandatory. Professional regulation of the accounting methodology is applied, and not its direct state regulation. The basic principle of accounting is formulated as "reliable and objective (fair) information".
In countries with british american model accounting, the main source of attracting additional financial resources is the private capital of investors who require constant and complete information about the performance of companies, and which they receive from the published financial statements. The main instrument for attracting and transferring capital here are securities. As a result, the countries included in the British-American accounting system are characterized by a highly developed securities market and the presence of a large number of transnational corporations.
From the point of view of legislative regulation of accounting, common for countries with british american model is that their accounting systems are more versatile and flexible. Business entities here are given considerable freedom of choice in accordance with the principle “what is not prohibited is allowed”. Accounting rules or standards are not determined by legislation, but are developed by professional organizations of accountants.
British-American accounting methodology considered the most liberal and least conservative, as it contains alternative options evaluation and accounting. The options chosen by the enterprise are drawn up in the form of an accounting policy. Charts of accounts are professional, that is, they are developed by companies independently. It is generally accepted that the high level of professional training of UK and US accountants is recognized.
Sufficiently democratic legislation allows us to conclude that in these countries there is a clear opposition of financial (accounting) accounting to tax accounting. At the same time, financial accounting is aimed at meeting the information needs of investors who decide on the expediency and profitability of placing their capital.
Priorities in meeting the information needs of investors involve placing emphasis on the system for generating information necessary for management. Desiring to obtain information that satisfies all the main criteria for the quality of information, an investor in an accounting organization places emphasis on professional guidance. With a fairly democratic regulation of economic and social issues, state leadership extends mainly to the organization tax accounting which brings it to the background.
In countries related to british american accounting system, as a rule, there is no single (standard) chart of accounts. This requires a fairly high level of professionalism from accounting staff. Starting the organization of the accounting process at the enterprise, every professional accountant must be able to build a rational workflow scheme and model a working chart of accounts. When developing a working chart of accounts, accountants use the recommendations provided for in professional national accounting standards.
The interests of investors require maintaining the physical and financial value of the capital invested by them at a constant level. Therefore, for countries with british american model accounting, the main approach to determining profit can be formulated in the words belonging to the Nobel Prize winner J. Hicks: "The purpose of calculating profit in practice is to give people an idea of the amount they can use for consumption without becoming poorer." The implementation of this approach in practice involves reflecting the impact of inflationary processes in accounting. And although in the countries that are part of the British-American accounting system, the inflation rate is insignificant and fairly stable, the national standards of these countries contain recommended methods for assessing accounting objects in terms of inflation and the inflationary processes themselves. The use of these methods in practice allows us to trace how the established approaches to the assessment of accounting objects affect the formation of the final financial result of the enterprise.
British-American Accounting Model Applicable in Australia, Bahamas, Barbados, Benin, Bermuda, Botswana, United Kingdom, Venezuela, Ghana, Guatemala, Honduras, Hong Kong, Dominican Republic, Zambia, Zimbabwe, Israel, India, Indonesia, Ireland, Cayman Islands , in Canada, Kenya, Cyprus, Colombia, Costa Rica, Liberia, Malavia, Malaysia, Nigeria, the Netherlands, Nicaragua, Pakistan, Panama, Papua New Guinea, Puerto Rico, El Salvador, USA, Tanzania, Trinidad and Tobago, Uganda, Fiji, Philippines, South Africa, Jamaica.
So for british-american model characteristic:
orientation of accounting to the needs of investors and creditors;
presence of a developed securities market;
high level of professional accounting training;
the presence of a large number of transnational corporations in these countries.
Continental accounting model focused on banks, or on state financial structures and tax rules. It has a regulated basis, but in alternative evaluation options. That's why continental model is distinguished by the presence of state regulation of accounting, which is organized in accordance with the principle “only what is permitted by law is allowed”. In accordance with the operation of this principle, accounting rules here are strictly regulated and determined by law.
State regulation of accounting implies conservatism in the accounting policy developed by business entities. In such a situation, the role accounting profession because the preference is given not to professional judgment, but to strict adherence to prescribed laws and accounting rules. The professional qualities of accountants in the field of financial accounting are assessed here from the position of competent and conscientious implementation of the norms and rules established by the state.
Accounting is built in accordance with the unified national chart of accounts, which ensures the use of unified accounting methods and the constancy of their application. Professional accounting organizations play a smaller role, but the level of training of accountants (especially in Germany and France) is no less high than in the UK and the USA.
The entire system of accounting and reporting is subordinated to the interests of state regulation of taxation and macroeconomic planning. This approach makes it possible to provide investors represented by large banks and the state with certain financial guarantees. The level of confidentiality in these countries is much higher, which is achieved by limiting the scope of the dissemination of financial information and increasing its secrecy. As a result, the degree of disclosure of financial information in financial statements is determined by the state.
The close relationship of business entities with banks and the state involves the development and improvement of tax accounting, which allows for control over the completeness and timeliness of tax payments and occupies a priority position.
Continental Accounting Model applied in Austria, Algeria, Angola, Belgium, Ivory Coast, Burkina Faso, Germany, Guinea, Greece, Denmark, Egypt, Spain, Italy, Cameroon, Congo, Luxembourg, Mali, Morocco, Norway, Portugal, Senegal, Sierra Leon, Togo, France, Switzerland, Sweden, Japan (with elements of American accounting).
Therefore, for continental model characteristic:
close ties with the banking system;
detailed legal regulation of accounting and reporting;
orientation of accounting and reporting to the interests of state regulation of taxation and macroeconomic planning.
South American accounting model focused solely on tax rules. The main source of attracting additional financial resources is public funding. It is directed, first of all, to the priority sectors of the economy, in which these countries specialize in the system of the international division of labor. The entire system of accounting and reporting is focused on the requirements of state planning. The accounting methodology is legally unified and provides for mandatory recalculation of reporting for price changes. Accounting for price changes in these countries has a long practice due to long-term and persistent inflation. The South American accounting model is used in Argentina, Brazil, Bolivia, Guiana, Paraguay, Peru, Uruguay, Chile, Ecuador.
In countries with South American accounting system there is a centralized system of power, which implies the presence of state control in accounting and the desire to achieve a universal order, which is also a factor of uniformity.
For most countries South American accounting system characteristic is the low professionalism of the accounting service, since the development of accounting methods and their legislative support is provided by the state. Therefore, it is it that gives certain guarantees of the reliability of published information, creates the basis of public confidence in companies and an atmosphere of successful industrial development in these countries,
So for South American model characteristic:
high level of inflation;
orientation of accounting and reporting to the requirements of state planning;
unification of accounting principles.
Accounting model of mixed economies has common features of each of the models listed above. These countries are currently studying and summarizing the accounting practices of countries with developed market economies and the requirements of international accounting organizations, and the development of national accounting and reporting standards is beginning.
Ensuring the competitiveness of the products of mixed economy countries requires attracting a large amount of additional investment. However, the prospects for attracting capital from international credit institutions are rather problematic. Therefore, the main source of investment growth are direct capital investments by foreign investors. However, favorable conditions must be created for this in the country.
As a way to attract foreign capital, many governments in Eastern Europe have chosen privatization and the creation of joint ventures. It is estimated that in the Soviet Union the number of registered joint ventures increased from 23 at the beginning of 1988 to 1,000 in 1989, respectively in Hungary from 102 to 600, and in Poland from 13 to 400.
The transition to a free market economy was a prerequisite for reforming accounting in these countries. In Hungary, Poland, the Czech Republic, the approval of the stock exchange has become a priority. The governments of these countries agreed to conclude agreements with international companies to conduct research to improve the accounting system. In some countries, attempts have been made to develop a new chart of accounts based on the Fourth and Seventh EU Directives.
In a centralized economy, the unification of financial statements was due to the goal of controlling the interests of the state. The tasks of accounting were to register the facts of life, and not to provide information support for the processes of making managerial decisions at the level of a business entity. The concepts of profitability and share capital were not taken into account, and accounting was intended to determine the costs of production. Financial accounting capabilities were not in demand at all.
According to foreign practitioners, the accounting profession in the countries of Eastern Europe was poorly developed, since central regulatory bodies were of great importance in managing the activities of an enterprise. The implementation of international standards has been very slow. Another of the major accounting problems in these countries is the inertia and conventionality of views on the way to find answers to questions related to financial control, valuation of capital, profits and investment in joint ventures.
Experts point out the possibility of Islamic model accounting. But due to the fact that it is not represented by official financial statements and works on accounting theory, it has not been covered or generalized by anyone.
Thus, in its development, each state, as a result of the choice of priority ways of solving economic problems and sources of their financing acquires the features of one of the accounting systems discussed above. However, the presence of sufficiently diverse approaches to the formation of accounting systems in world practice makes it difficult for international economic integration, access to international capital markets. The solution to this problem is possible only in the formation of financial reporting indicators in accordance with international accounting standards and principles.
In the legal regulation of accounting rules in Western countries, there are mainly two approaches. In some countries, such as Argentina, France, Germany, the practice is such that all the main accounting principles are defined in detail legislative acts. Accounting in these countries is based on the principle "You can only do what is permitted by law."
In countries such as the USA, Great Britain, the accounting system is based on the principle “You can do everything that is not prohibited by law”. Here, the rules for regulating accounting and reporting are determined primarily by professional accountants, and not by lawyers.
Countries of the first type are defined as “countries-legislators”, the second type – “countries-non-legislators”. Western economists believe that with strict legal regulation of accounting principles, the accounting system loses its flexibility, while with the second approach, accounting promptly reflects the changing business conditions.
National accounting organizations develop and/or oversee accounting methodology. The first of them appeared in Great Britain and the USA in the 19th century. The oldest of these, the Institute of Corporate Accountants in Scotland, began with the fact that in January 1853 eight highly qualified accountants in Edinburgh defined the profession of accountant as having public functions.
Send your good work in the knowledge base is simple. Use the form below
Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.
Posted on http://allbest.ru
Introduction
Today, there are more than one hundred national models accounting. Despite the general patterns, each of them has its own characteristics and its own system of principles. Accounting and valuation methods are different production stocks, depreciation and its reflection in accounting, methods of recording transactions with foreign currency, etc. In addition, there are differences in approaches to the formation of reporting and the list of its indicators, methods of monitoring the activities of firms. This is due to the fact that national accounting systems allow solving certain tactical and strategic tasks of developing the economy of a particular country by issuing and implementing relevant regulatory and legislative acts regulating the national accounting system.
Attempts to solve the problem of accounting unification in the international context were repeatedly made in the second half of the 20th century. The idea of harmonizing different accounting systems has been discussed within the European Community (EC) since 1961; each country may have its own model of accounting organization and a system of standards governing it; "harmony" of accounting models is achieved through their compliance with the EU Directives, the main provisions of which are included in the national legislation of the countries - members of the community.
The relevance of this topic stems from the broad development of international, economic and financial ties, the increasing interpenetration of the economy of Russia and other countries in the context of expanding globalization. The purpose of this course work is to consider and compare various accounting models, factors influencing the formation of accounting models.
financial accounting
1. Factors influencing the formation of accounting models
International organizations of accountants, working groups of UN experts, the Committee on International Financial Reporting Standards, individual economists have studied the features, analyzed and grouped national accounting systems for a number of years. As a result of this work, it became possible to identify a number of factors that have a direct impact on the formation of a particular accounting and reporting system.
The primary factor behind the fundamental differences between national accounting systems is the information needs of users of financial information. The purpose of financial reporting, its qualitative characteristics, fundamental principles and concepts, specific accounting methods and techniques will depend on which group of reporting consumers is the main supplier of capital. In countries where the main creditors of enterprises are banks and the state, reporting will be strictly focused on the needs of fiscal government agencies and large credit organizations. If the formation of capital is directly related to the degree of development of the stock market and there is a fierce competition for additional sources of investment, then the reporting of enterprises will be guided by the requests of potential investors and creditors. Such reports contain a maximum of analytical data, namely: all additional information about the structure and territorial location of production facilities, about shares and shareholders, about the company's contribution to improving the welfare of society, about the level of professional training of employees, etc.
As the second factor influencing the formation of the accounting system, one can name the priority of the macro- or microeconomic interests of the state. Macroeconomic interests imply an interest in expanding the scale of export-import operations, selling shares and securities on the stock exchanges of different countries, attracting foreign capital to the country, and joining the elite of the world economic community. Naturally, a country that has set these goals in the first place is faced with the need to unify its accounting principles in accordance with generally accepted norms and standards. If the priority at the moment is focused on solving domestic economic problems, the accounting and reporting system will be influenced by established national traditions, which, one way or another, have their own characteristics in each country.
In addition, significant differences in the accounting methodology are introduced by the factor of division of accounting into financial, tax and managerial. Financial accounting solves the problems of relations between enterprises and the state, banks, shareholders, suppliers, i.e. issues of external activity. Management accounting is aimed at solving internal problems related to improving the efficiency of structural units (responsibility centers). The main task of tax accounting is precise definition tax base, which allows us to consider it as an instrument of the state's fiscal economic policy. The relationship between financial, managerial and tax accounting in different countries is carried out in different ways, and the priority role of one of them automatically discredits other types of accounting and affects the structure of financial reporting and the accounting system. If the principles of accounting (financial and managerial) do not contradict the norms of tax legislation, organizations have the opportunity to maintain financial accounting in the interests of investors, management accounting in the interests of the company's management and at the same time use tax accounting standards to optimize deductions to the budget. On the one hand, such a construction of accounting complicates the work, on the other hand, it is the presence of this system that most satisfies the interests of entrepreneurs and legislative authorities.
Political stability in the country and legislative protection of the interests of owners also affect the content of accounting, since the risk of unexpected loss of capital is a determining factor for investors when choosing a method and country for investing free funds. While ensuring proper protection of the rights of investors, the number of transactions on stock market increases sharply, there is an influx of foreign capital into the country, the proportion of funds raised by organizations through the issue of shares increases. In this case, accounting is "forced" to provide reliable and transparent information for the formation of financial statements.
And vice versa, if the interests and protection of creditors come first, the capital structure of enterprises and organizations is formed at the expense of banks and credit institutions, the securities market is relatively small, financial reports do not always adequately reflect the real economic situation.
The next factor affecting the accounting system is the degree of involvement of investors in business management. The Industrial Revolution in the United States led at one time to a sharp increase in national wealth and the number of companies. The source of capital for the latter was the nascent and growing rich middle class. The owners of companies, who at the same time were investors, gradually moved away from operational management, passing it into the hands of professional managers and economists. Thus, financial records begin to be used to monitor the efficient use of resources and become the most important source of information about the welfare of the company.
The geopolitical position of the country also influences the development of accounting. Accounting methods are exported and imported, thereby ensuring the uniformity of accounting systems in different countries. Thus, the United States, having a common geographical border and close economic ties with Canada, have a significant impact on accounting practice in this country. Canadian companies are actively involved in the work of American stock exchanges. Such countries as Mexico, the Philippines, Israel, etc. experience similar influence of the United States of America.
Accounting for inflation in accounting. Inflationary processes influence the system and methods of accounting. In countries where inflation is low and economic processes predictable, accounting is based on the historical cost principle. It lies in the fact that the assets of the enterprise, the volume of sales, production costs in accounting are reflected at prices prevailing at the time of these transactions (at cost), and is based on stability monetary unit used in accounting. The realism and reliability of financial information compiled in accordance with this principle is inversely proportional to the rate of inflation.
Thus, the application of the principle of historical cost in accounting is an indicator of economic stability in the country. If accounting uses special conversion techniques to estimate the value of assets, inflation has a significant impact on the economy.
Personnel training and financial management. The degree of development of production, management, financial system, training of professional personnel together affect the formation of the accounting system in the country. A higher level of production development requires the formulation of more complex accounting problems that can be solved by highly qualified accounting personnel. Therefore, if the level of vocational education in the country is low, the accounting system cannot be organized at a high level. The same can be said about the level of preparation of users of financial statements. The level of their professional culture determines the complexity of the information that must be obtained from economists and accountants.
However, it is possible that even in developing country the level of development of accounting is at a high level, financial reports meet the requirements of transparency, reliability, usefulness for making economically sound management and investment decisions. This situation is observed when the business is organized as an international corporation, the headquarters of the companies are located in industrialized countries, from where the current management is carried out and the accounting personnel and managerial personnel are exported.
2. Accounting models, their classification
Currently, we can talk about the formation of the Anglo-American, continental, South American accounting model, the Islamic model and the mixed economy model.
Anglo-American accounting model
IN The Anglo-American system (British-American-Dutch model) considers accounting not only as a system of recording, classifying and summarizing financial data by registering transactions and events in monetary units, but also as a means of providing quantitative information of a financial nature about business entities for the purpose of using this information for making managerial decisions. In other words, the accounting system is an essential element of the infrastructure of a market economy, linking together both private and public organizations.
As a rule, all categories of reporting users do not analyze the financial results of an individual enterprise, but consider alternative options for placing their funds in companies of various industries. Thus, in order to conduct intercompany comparisons, the information provided by companies must be uniform, that is, standard, compiled according to uniform rules and regulations. In countries using the Anglo-American accounting model, standards are developed not by government authorities, but by public professional organizations. The top three countries (UK, US and the Netherlands) using this model have a well-developed securities market, with corporations often separating equity holders from operational management. In the US, politics business accounting(GAAP) is developed by a professional organization of independent accountants - the FASB Accounting Standards Development Board. UK uses FRS Financial Reporting Standards and SSAP Standard Accounting Practices
Currently used by: Australia, Bahamas, Barbados, Benin, Bermuda, Botswana, Venezuela, Ghana, Hong Kong, Dominican Republic, Zambia, Zimbabwe, Israel, India, Indonesia, Ireland, Cayman Islands, Canada, Kenya, Cyprus, Columbia, Liberia, Malawi, Malaysia, Mexico, Nigeria, New Zealand, Pakistan, Panama, Papua New Guinea, Puerto Rico, Singapore, Tanzania, Trinidad and Tobago, Uganda, Fiji, Philippines, countries of Central America, South Africa, Jamaica.
Continental accounting model
A characteristic feature of the regulatory accounting of the continental model is that the state participates both in the process of developing accounting standards and in the process of putting them into practice. The reporting rules of organizations are designed in such a way as to form input information for the national accounting system, through which the state controls the economy. This circumstance is due to the centuries-old tradition of centralized management and the desire of entrepreneurs to enlist and receive state support. The latter has a significant impact on accounting by establishing a taxation system and requiring that all expenses be reflected in the accounting accounts for tax purposes. Procedures for calculating taxable income based on accounting data are strictly regulated. For determining tax liabilities adjustment tables are being developed accounting profit. Professional accounting organizations are assigned the role of consultants on the practical application of the norms developed by the state, as well as researchers in the field of accounting.
Accounting for this model is practiced in Europe and Japan. Business in these countries is closely connected with banks, and the government requires mandatory publication of reports. The entire accounting procedure is conservative and regulated by law. Taxation issues are a priority.
This model is used by: Austria, Algeria, Angola, Belgium, Burkina Faso, Ivory Coast, Guinea, Germany, Greece, Denmark, Egypt, Zaire, Spain, Italy, Cameroon, Luxembourg, Mali, Morocco, Norway, Portugal, Russia, Senegal, Sierra Leone, Togo, France, Switzerland, Sweden, Japan.
South- american accounting model
The South American accounting model is characterized by a focus on the needs of government planners and is usually used by "Spanish-speaking" countries that are united by a common historical development and traditions.
The generally accepted chart of accounts is the basis of accounting. It provides transparency annual accounts companies, its comparability and adaptation of accounting to the requirements international standards, imposes strict requirements for the presentation of information for annual reporting. Thus, it should contain information about the expected distribution of the results of the company's activities, the applicable valuation rules, including an exhaustive list of criteria for each category of assets and liabilities. Reporting should include data on rent, insurance, litigation, tangible fixed assets, inventories, equity, taxes, etc. The reporting also provides information necessary for monitoring the implementation of tax policy.
Another difference of this model is the constant adjustment of reporting data for inflation rates and the unification of accounting methods.
Used in Argentina, Bolivia, Brazil, Guyana, Paraguay, Peru, Uruguay, Chile, Ecuador. It focuses on the needs of the government and differs from other models in annual adjustments for inflation rates, the presence of special methods that take into account the instability of the monetary unit and the violation of the principle of initial valuation of fixed assets.
Islamic Accounting Model
Islamic model. Included in the practice of the new Organization for Economic Cooperation of Islamic States developed under the strong influence of the Muslim religion. The main set of rules and regulations that every true Muslim must adhere to is Sharia, based on the Koran and Sunnah, the main books of Islam. Sharia obliges not only to observe numerous religious traditions and rituals, to be guided by certain principles in everyday life, but also imposes certain requirements on finance and business. And insurance, as an important component of the economy, is no exception. Traditional insurance, in the form in which it is accepted in the Western world, is not in accordance with Sharia, and therefore - prohibited.
In commercial insurance, there are elements such as riba (usury), meysir (excitement) and gharar (uncertainty). These elements are unacceptable from the point of view of Sharia, although Muslim jurists still cannot agree on the degree of presence of these factors in the traditional relationship between the insured and the insurer.
Although Islam imposes a number of restrictions on business, it simultaneously preaches economic activity. The logic is simple: inattention to the economy can harm Islam itself, as its financial base will be weakened. In practice, this means specific prohibitions, and one of the main ones applies to gharar - transactions, the terms of which contain unjustified or excessive risk, for example, when the result depends on the occurrence of a certain event. Because of it, first of all, classical insurance schemes also require a significant revision. Another well-known restriction prohibits riba (usury), that is, loans at interest. To put it simply, money cannot buy money; fundraising must be based on the sharing of both profits and risks. Therefore, most often Islamic loans become a joint venture between the bank and the borrower, resembling direct investment in the classical financial interpretation.
Financial transactions allowed to Muslims usually have analogues in classical Western business. We can say that schemes are selected that are the most just and protected from the point of view of Islam. "The study of the International Monetary Fund (IMF)," confirms MGIMO Associate Professor Renat Bekkin, "conducted back in 1987, shows that Islamic economics and Islamic banking, in particular, contribute to a fair distribution of resources, are less prone to the risks of illiquidity and insolvency" .
Mixed Accounting Model
The model of a mixed economy is typical for the countries of Eastern Europe and the states that were part of the Soviet Union, for which the transition to a market economy was a prerequisite for reforming the accounting system.
The variety of forms of ownership, which is not typical for the socialist economic system, has led to the need to provide financial information not only for state authorities, but also for shareholders, owners, managers, creditors and investors. The expansion of foreign economic activity, the absence of an "iron curtain" and the need for an influx of foreign capital have put forward the macroeconomic interests of these states as a priority, there is an objective need to provide financial statements of enterprises in accordance with the requirements of International Financial Reporting Standards (IFRS).
The practice of transition to IFRS has shown that there are two ways to solve this problem - the adoption of International Standards as a basis and the preservation of some national features (and, as a result, relative economic independence) or "duplication" of International Standards.
Accounting organization system in Russian Federation is wholly and completely under the auspices of state authorities; professional organizations play the role of advisory research groups. Already developed and implemented new plan accounts of the financial and economic activities of organizations, accounting regulations (PBU) are adopted, the prototype for which was IFRS, and tax accounting became a separate accounting industry.
However, Russian PBUs are not an exact copy of the International Standards, since not all principles, terms and concepts are consonant with the norms and requirements of our legislation, in particular the Constitution of the Russian Federation. Thus, traditional features are preserved and a kind of “symbiotic” accounting system is being formed, which, on the one hand, is focused on the principles of International Financial Reporting Standards, and on the other hand, is strictly controlled and regulated by state authorities.
As an illustrative example of "duplication" of IFRS, one can cite the experience of the Republic of Kazakhstan, where the accounting system is based on standards that are fully consistent with international ones. It also adopted a unified accounting chart of accounts, but differing, compared to the Russian one, in significant detail, the absence of active-passive accounts, which ensures simplicity, "transparency" and analytics of the financial information provided.
It should also be noted that the countries of continental Europe and the American GAAP accounting system have a certain influence on the formation of accounting systems in Eastern Europe. In this situation, it is not entirely correct to speak of International Financial Reporting Standards as a modern "panacea" in the field of accounting. It is quite possible that under the influence of the accounting organizations of countries defending their economic interests, the IASB will make some changes to its constitution in order to strengthen interaction with national organizations that establish their own accounting standards in their states.
Conclusion
It should be emphasized that the division into accounting models is very arbitrary - there are no two countries with completely identical accounting systems. On the other hand, due to objective processes in the global economy, the need for international accounting standardization is obvious. A number of organizations deal with the problems of unification of accounting and reporting standards.
In the context of the integration of the Russian economy into the world economy, one should, leaving all the valuable national features of Russian accounting, strive, at the same time, to maximize the use of international accounting standards. This will lead to the improvement and reform of the current accounting system at all levels of its organization, which in turn will lead to more active trade and economic contacts, the influx of foreign investments so necessary for the Russian economy.
In conclusion, it is necessary to pay attention to the fact that between all these factors and the degree of development of the accounting system there is a "feedback". The lack of a proper accounting system hinders economic progress, the influx of foreign capital and adversely affects the development of foreign economic relations of different countries.
Bibliography
1. Aitman T.O. Office work: Sample documents. - M.: Publishing house RIOR, 2004.
2. Al Harran, Saad. Islamic Finance: Entrepreneurial Finance. Pelandung Publishing.2005
3. Bezrukikh P.S. Accounting: textbook. allowance: rec. Ministry of Education of the Russian Federation; Expert Council for Accounting. accounting / P.S. Bezrukin, I.P. Komissarov. - M. : UNITI, 2007.
4. Rich I.N. Paperwork and accounting: textbook. allowance / I. N.
5. Accounting: textbook. for universities: rec. Ministry of Education of the Russian Federation;
6. G. Müller, H. Gernon, G. Mink. “Accounting” International Perspective., 2007
7. Gulyaev N.S. , Vetrova L.N. Basic accounting and analysis models in foreign countries: KnoRus , 2006.
8. Klimova M.A. Accounting. Infra-M, 2008.
9. Tkach V.I., Tkach M.V. “ International system accounting and reporting” - M., 2006.
10. Sokolova E.S. Accounting: FBK-PRESS. 2008.
Hosted on Allbest.ru
...Similar Documents
Characteristics of accounting. Unified standards in the field of accounting and reporting. Differences between different accounting models. National accounting systems: British-American, continental, Latin American model.
term paper, added 06/10/2015
The main users of information generated in the system of financial and management accounting abroad. Anglo-American accounting model. Characteristics of financial reporting forms. Preparation of the company's cash flow statement.
test, added 10/20/2017
Characteristics of programs for accounting. Development and implementation of a configuration for accounting in a company engaged in foreign economic activity: functions, requirements for the user, software.
thesis, added 07/17/2009
Information Support economic decisions various users of financial statements. Principles of formation and problems of implementation of international accounting standards in Russia. Analysis of the execution of the Federal Law on Accounting.
essay, added 10/04/2015
The essence and principles of accounting and the requirements for it. Preparation of financial statements - the basic document of the enterprise, its main objectives. Preparation of a cash flow statement and a statement of equity.
abstract, added 11/23/2010
The study of the subject and tasks of accounting. Characteristics of the recommended accounting rules. Study of the order and main features of maintaining accounting registers. Analysis of the compilation and storage of registers in electronic form.
term paper, added 11/30/2014
Legal support and principles of organization of accounting at the enterprise. Financial and management accounting. Accounting policy - a set of methods adopted by the head for accounting and disclosure of financial statements.
abstract, added 05/10/2011
Comparative analysis of accounting systems and methods in foreign countries. Formation, normative regulation of Islamic accounting. Harmonization of accounting principles and standards. Distinctive features Anglo-American model of accounting.
presentation, added 11/07/2014
Accounting system. Law "On Accounting". Subject and main objects of accounting. Accounting methods. Normative regulation of accounting. Basic rules of accounting.
control work, added 12/11/2002
Socio-economic aspects of the development of bankruptcy, its legal regulation. Organization of accounting and financial reporting in bankruptcy and examples of their conduct at an insolvent enterprise. Drawing up the reporting of CJSC "ASTEYS".
1.1. Anglo-American model
The basic principles of the Anglo-American model were developed in Great Britain, the USA and Holland, therefore it is also called the Anglo-American-Dutch model. This model is characterized by non-rigid accounting regulation. The main idea is the orientation of accounting to the information requests of investors and creditors. In countries using this model, as a rule, the securities market is well developed, where most companies find additional sources of financial resources.
Countries with the Anglo-American accounting model include: Australia, Great Britain (including countries in the Bahamas and Bermuda), Zimbabwe, Israel, India, Ireland, Canada, Cyprus, Mexico, New Zealand, USA, Venezuela, Iceland, the Netherlands, Pakistan, Panama, Tanzania, Uganda, Fiji, Philippines, Central American countries, South Africa, Jamaica, Ghana, Zambia, etc. .
It is not typical for English-speaking countries state regulation accounting, and professional: the best specialists in the field of accounting unite in an association and develop fundamental accounting principles, and government bodies recognize them. At the same time, accounting is kept in the interests of investors and creditors.
Countries with the Anglo-American model build accounting based on established practice. Distinguish between English and American versions. The first is typical for countries such as
UK, South Africa, New Zealand, Australia, Ireland; the second is for the USA, Canada, Japan, Mexico and the Philippines.
Holland is usually referred to the English-speaking system, but this country of continental Europe is characterized by an approach not from practice to theory, but, on the contrary, from theory to practice. In other words, in this country they are guided primarily by the deductive method, and not by the inductive method.
1.2. continental model
The continental model is typical for European countries. Here, business has close ties with banks, the state, which basically satisfy the financial needs of companies. In this system, accounting is regulated by law and is characterized by significant conservatism. Accounting practice is aimed primarily at meeting the requirements of the government, especially with regard to taxation in accordance with the national macroeconomic plan. Orientation to the management requests of creditors is not a priority task of accounting.
The continental accounting model is typical for countries with a regulated economy and strong influence from the banking system or countries that establish strict requirements for accounting and reporting.
This model is used by Austria, Belgium, Greece, Denmark, Egypt, Spain, Italy, Norway, Portugal, France, Germany, Switzerland, Sweden, Japan, Algeria, Democratic Republic of the Congo, Cameroon, Luxembourg, Mali, Morocco, Senegal, Togo.
In continental Europe, accounting is carried out according to the principles formulated by state bodies and mandatory for all business entities. At the same time, accounting is carried out in the interests of state regulators, including tax authorities.
Countries that adhere to the continental model can also be divided into two groups: 1) recognizing the primacy of the correct reflection of accounting data, mainly legal ones (Germany); 2) proclaiming the primacy of fiscal law (France, Italy, Spain, Belgium).
1.3. South American (Latin American) model
The main difference between the South American (Latin American) model and other models is the permanent adjustment of accounting data for inflation rates. In general, accounting is oriented to the needs of state planning bodies, and accounting methods are unified. The information necessary to control the execution of tax regulations is well reflected in accounting and reporting.
The South American accounting model is typical for countries with high inflation, unification of accounting principles.
In Latin America, accounting has one main goal - to reflect inflationary processes, and the accounting methodology is completely subordinate to this goal.
The South American model is used by Argentina, Bolivia, Brazil, Paraguay, Peru, Uruguay, Chile, Ecuador, Guyana.
1.4. Islamic and international models
The newly created models include Islamic and international models.
The Islamic model develops under the great influence of theological ideas and has a number of features. In particular, companies are prohibited from receiving dividends for the sake of dividends. Market prices are given preference in the valuation of assets and liabilities of companies.
The need to develop an international model arises from the need for international accounting consistency, primarily in the interests of multinational corporations and foreign participants in the international foreign exchange market. Only a small number of large corporations can currently claim that their annual financial statements meet International Financial Accounting Standards.
Thus, having considered the existing accounting models, it cannot be argued that accounting in one country or another is better or worse than in others. Models and accounting systems are created to achieve certain goals. Accounting is determined by the environment in which it operates. A variety of social, political and economic conditions also generates a variety of ideas, corresponding methods for their implementation in the theory and practice of accounting.
2 Comparative characteristics of the balance sheets of various countries
2.1. Characteristics of the balance sheet in the Anglo-American system
A feature of accounting in the Anglo-American system is the strong influence of international standards on it, which is reflected in the reporting of companies.
The financial statements published by Western companies are colorfully designed booklets, which, in addition to the forms themselves, accounting reports, certified by the auditor, contain a lot of other information. As a rule, this is an address by the president of the company to shareholders, a report by the board of directors, an analysis of the company's development over previous years, a forecast for the near future, a description of the geography and size of investments, international relations, information about the social policy of the company with various graphs, diagrams, diagrams, photographs, etc. Such information is not regulated and is presented solely at the discretion of the company. However, it is very important for users as additional source data for decision making .
The financial statements of US companies reflect account balances and movements, as well as aggregates across multiple accounts, such as net income.
Financial statements include the following reports:
- balance;
- gains and losses report;
- a statement of changes in financial position or on the use and sources of funds (currently little used, instead a cash flow statement is prepared);
- change report equity;
– explanatory note;
- conclusion of the audit firm.
The balance sheet (balance sheet) reflects the state of the company's finances on a specific date - the end of the reporting period and is dated from this day. The data source for the balance sheet presentation is the General Ledger.
standard form there is no balance. The standards define the minimum data that a report must contain. The balance sheet includes information about the company's resources, liabilities and equity. It is based on a basic accounting equation that shows the relationship between a company's assets, liabilities, and equity.
In accordance with GAAP, the main components of the balance sheet are grouped into next order:
– assets should be reflected in descending order of their liquidity;
liabilities should be reflected in the order characterizing the proximity of their maturity. The closer the deadline, the earlier the obligation must be shown;
- equity should be reflected as follows: the first to show its varieties, the least subject to change.
The structure of the balance sheet headings should correspond to the specifics of a particular company and be established in accordance with the principle of full disclosure of the necessary information. Differences in the balance sheets of different companies, due to industry and other features of their activities, nevertheless fit into the structure characteristic of all companies in the financial sector.
Assets, like liabilities, are divided into current and long-term.
The property of companies represents their assets, which can be current and long-term.
Current assets include cash and other assets that may be converted to cash, as well as assets held for sale or consumption during the normal course of business of the entity or within one year after reporting. Most companies consider their business cycle to be one year long.
Current assets |
Current responsibility |
cash, short-term investment |
accounts payable for goods and services used in the company's core business cycle |
receivables, or accounts receivable |
short-term accounts payable for goods and services not used in the company's core business |
inventory, prepaid running costs |
short-term bills |
other assets |
current payments to repay long-term liabilities (including lease liabilities) |
Long term assets |
receipt of prepayment for goods not yet delivered or services not yet rendered or other prepaid income |
fixed assets, or property, buildings and equipment |
accrued but unpaid expenses for wages payment of interest and taxes |
intangible assets |
current payments of deferred tax payments |
multi-period prepaid expenses |
other liabilities |
investments and funds |
long term duties |
other assets |
long-term loans and credits |
lease obligations |
|
bonds |
|
other liabilities |
|
Equity |
|
share capital at par, non-nominal and declared value, contributed or paid-in capital |
|
contributed or paid up capital in excess of the nominal or declared value of the share capital |
|
other contributed or paid up capital |
|
retained earnings |
Figure 1 - Balance sheet structure in the Anglo-American accounting model
Sometimes the same assets can circulate for a year or a longer period. In this case, their classification as short-term current or long-term assets depends on the intention of the company's management regarding their use.
When reflecting accounts receivable, its possible non-payment is not taken into account. Accounts receivable used as collateral for the company's fulfillment of its obligations to third parties (promissory notes), as well as the amount of impairment of receivables, are reflected as a deduction from accounts receivable or in the notes to the balance sheet.
Inventories are recorded at the lowest market price for similar inventories. If stocks are used in production, the degree of completion of their processing (raw materials, work in progress, finished products) is indicated.
In foreign practice, with the Anglo-American model, the following estimates of inventories are used when they are written off to production:
- at the average cost;
– FIFO;
- at the cost of each unit.
The FIFO method, or first-time inventory valuation method, is based on the assumption that the cost of goods purchased first should be attributed to goods also sold first. When using the FIFO method, the movement of value, not goods, is taken into account.
Most companies consider the FIFO method to be the most suitable for inventory. It involves the most realistic valuation of the company's assets.
The main disadvantage of the first-purchase inventory method is that it increases the impact of the economic cycle on a company's profitability.
Long-term assets include fixed assets, intangible assets, etc.
Fixed assets: property, land, buildings and equipment are long-term assets that are not intended for sale in this reporting period and are used in the company's activities.
Fixed assets are reflected in the balance sheet in one line at book value(minus depreciation) based on accounting data. When valuing land and buildings, the market value at the balance sheet date may be applied.
Intangible assets are reflected in the balance sheet at acquisition cost less depreciation. The cost of intangible assets is shown under two items: 1) goodwill (goodwill) and 2) other intangible assets. IN explanatory note provides information on the value of goodwill and the approved timing of its write-off.
Goodwill accounting methods are still the subject of dispute among accountants using the Anglo-American accounting model. Some believe that goodwill arises when one company buys another as the difference between the price paid and the current value of the assets of the company being bought. Thus, they interpret this difference as additional costs that should be covered from a special reserve fund and written off immediately.
According to other experts, goodwill is no different from intangible assets. Goodwill is an additional asset acquired when buying a company. It can be accounted for as trademarks and licenses, accruing depreciation over a certain time frame (no more than 20 years).
Some suggest writing off goodwill immediately upon acquisition of the company to the Profit and Loss account.
Currently, all three options for accounting for goodwill are allowed, but most companies with the Anglo-American accounting system prefer to include goodwill in intangible assets, followed by depreciation.
Multi-period prepaid expenses usually include the prepayment of long-term expenses aimed at deriving economic benefits in the future (prepayment of insurance services, equipment relocation costs, etc.). Desire to attribute long-term investments to this balance sheet item, as a rule, is caused by the desire to avoid difficulties due to their uncertain nature and the presence in many situations, for example, of such items as long-term investments.
Investments include shares of subsidiaries, loans to subsidiaries, shares of associates, treasury shares, other loans granted, other investments in short-term securities, investments in real estate.
If the investment is expected to be used for more than one year, it is included in non-current assets. Long-term investments are reflected in the balance sheet at the purchase price. It is allowed to revalue long-term investments depending on fluctuations in market prices. As a rule, they are only revalued downwards. If investments are shown on the balance sheet as current assets (short-term), then they should be reflected at the lower of the estimates (either at acquisition cost or at market value).
Treasury shares repurchased from shareholders should be shown as short-term investments at the purchase price.
Real estate investments are land or buildings that a company owns but plans to generate income in the distant future. Investments in real estate are reflected in the balance sheet at market value. The explanatory note discloses information about the appraisers and the appraisal base.
Other assets include assets that do not fall into the above sections, for example, the company's long-term debt from its employees arising from the company's programs to motivate and socially support personnel. Sometimes other assets include temporarily unloaded production facilities, provided that they should bring economic benefits in the future.
Liabilities can be current or long term.
Current liabilities are subject to repayment by using current assets for these purposes or by refinancing by accepting other current liabilities. In the report, current liabilities are usually reflected in the order of their repayment.
To settle long-term liabilities, it is not required to use current assets or increase current liabilities during a subsequent business cycle or accounting period.
Long-term accounts payable are reflected in the balance sheet under two items: 1) part of the long-term accounts payable, which must be repaid before the expiration of the next 12 months after reporting date; 2) part of long-term accounts payable, which must be repaid more than 12 months after the reporting date.
The explanatory note should contain information on the conditions for obtaining loans and their breakdown into two groups: 1) credits listed on the balance sheet with a maturity of up to five years and 2) over this period.
In the part of the authorized capital, only the paid part of it is shown. If the capital is not share capital, its value is reflected according to the constituent documents in the part paid by the founders as of the reporting date. Share capital is shown under two items: 1) paid at par and 2) paid in excess of par.
There are a number of rules in accordance with which this rubric is prepared. The capital authorized for issue, the issued shares (number and par value) and in circulation must be indicated without fail.
The Anglo-American accounting model provides for the creation of the following types of reserves:
- for revaluation of fixed assets;
– against depreciation of securities;
- for extraordinary losses;
- under contingent liabilities;
- equalizing (for vacation, repairs, interest to the bank, overhead, etc.).
Contingent liabilities include liabilities of the company that may cause losses as a result of actions taken in the reporting period. Such obligations include the following: possible penalties for claims that were pending at the reporting date; obligations issued structural divisions companies on its behalf; possible obligations under contracts for which violations were committed in the reporting period, for which the contract provides for penalties; other obligations. Reserves in the balance sheet of companies applying the Anglo-American model are reflected in one line.
Equity is profit. If in the reporting period the company suffered a loss, it is reflected in the financial statements as a negative value.
In reporting prepared in accordance with international standards, as well as in the Anglo-American accounting model, it is not customary to divide retained earnings into profits of previous years and profits of the reporting period. If the company had losses in the previous period, and profit in the reporting period, or vice versa, then these results do not overlap, but are shown separately.
Retained earnings is the balance of net income at the disposal of the company. At the end of the reporting period, it is equal to retained earnings at the end of the previous accounting period plus net income for the period minus dividend payments on shares. Before calculating this profit for given period retained earnings for the previous period are adjusted in accordance with the amendments made related to the change in the principles of accounting for certain indicators, correction accounting errors etc. .
The indicator of retained earnings, taking into account its changes and adjustments, serves as a link between the balance sheets of the previous and current periods.
If a company recalculates the financial statements of its subsidiaries prepared in foreign currency, then the balance sheet separately reflects the item “Profits (losses) from the recalculation of financial statements”.
Some balance indicators are estimated. So, bonds are reflected at a discounted present value, receivables - at an estimated net worth its sale, shares - at the lowest market price, fixed assets - at book value, which in turn depends on the estimated period of their operation. To ensure the reliability of balance sheet information, it should be accompanied by comments indicating which methods were used to evaluate a particular indicator. Sometimes events that occurred after the reporting date require balance adjustments (Table 1).
Table 1 - Accounting for events that occurred after the reporting date
Events Leading to Balance Adjustment |
Events that do not result in balance adjustments |
1.Last adjustment of the purchase price or proceeds from the sale of fixed assets that were bought or sold before the end of the year 2. Obtaining information indicating a decrease in the value of assets owned by the company 3. Identification of errors and abuses that could lead to misreporting |
1. Merger or acquisition of companies 2Issue of shares, bonds 3. Actual or proposed reconstruction 4. Loss of fixed assets as a result of natural disasters and emergencies 5. Change in the volume of current trading activity 6.Government action 7. A sharp change in foreign exchange rates |
In order to ensure the most complete disclosure of information about the company's business activities and enable the user to make decisions based on a comparison of information for different years, it is recommended that balance sheets be prepared indicating the indicators reflected in them, not only for reporting period, but also for the previous two, i.e. for three years.
2.2 Accounting in the German accounting system
In Germany, the state does not interfere in the internal affairs of companies, but establishes certain general requirements that must be observed for an organized and successful business. These general requirements are mandatory for all business entities and must be strictly observed. Such requirements are enshrined in legislation relating to management, taxation and business conditions.
Accounting is based on the provisions of the Commercial Code, which contains requirements for accounting and auditing, the Value Added Tax Act, the Income Tax Act and the Corporation Tax Act. In addition, since 1986, the Law on Balances has been in force, in accordance with which the main provisions for the maintenance of accounting records and the preparation of balance sheets have been adopted.
General accounting principles and standards are approved by the Law on Joint Stock Companies, enacted in 1937. The adoption of these principles and standards is associated with the bankruptcy of a large number of companies in the 20-30s of the XIX century and the centralization of state administration. In 1937, a decision was made on the state standardization of accounting and a single Chart of Accounts was approved.
Currently, Germany does not use a single Chart of Accounts, but there are several recommended Charts of Accounts.
In accordance with German business law, accounting data is considered as:
– information for the entrepreneur about the property, debts, profits, losses, expenses, income of the company;
- evidence in case of trial;
– report of money managers to investors;
– the basis for calculating the amounts of taxes and financial management;
– information about the creditworthiness of the company and the use of loans.
Germany is characterized by the simultaneous application of traditional German and modern European standards, which is influenced by EU directives. At the same time, the country does not regulate the compilation of primary documents, accounting registers, as well as accounting procedures. This also applies to the timing of the formation of primary documents and accounting registers: daily accounts are required only when reflecting cash.
A feature of German accounting is the preparation of two types of reporting:
Equity capital and external liabilities showing their financing.
In turn, investments are divided into current and non-current assets, and sources of financing - into current and long-term. Based on these individual accounts, tax liabilities are calculated.
Implementation in national system the provisions of the Seventh EU Directive had its own characteristics.
First, while the requirement to show all deductions required for tax purposes remains in place, companies are free to decide whether to include individual account numbers in their consolidated financial statements.
Secondly, the reporting of a group of companies does not have to comply with French accounting principles. It can be compiled according to the accounting rules adopted by other financial markets. Companies implementing economic activity in the markets of foreign countries, have the right to draw up group reports in accordance with the rules of the relevant market.
Thus, the accounting practice of a group of companies is very diverse due to the lack of formalized requirements. Companies preparing consolidated financial statements, in most cases, do so on a voluntary basis and, therefore, use those accounting rules that seem more convenient to them.
However, the freedom to choose accounting methods does not mean that there is no regulation of reporting consolidation in France. Mandatory requirements include, in particular, a rule specifying that companies over which the parent company exercises exclusive control must be treated as subsidiaries of the parent company.
Exclusive control may be exercised through the possession of:
- direct or relative majority of votes;
– by a direct or relative majority of 40%, if none of the partners or shareholders has a larger share (in percent);
– controlling influence that results from a management agreement or other similar agreement (provided that the parent company has an equity interest in subsidiaries).
Subsidiaries whose nature of operations differs materially from those of the parent may be accounted for using the equity participation. Associates over which the parent company has significant influence (20 percent or more of the capital) must also consolidate using this method. .
Joint ventures use the proportionate consolidation method. A company is defined as a joint company if a limited number of partners conduct business and decisions are made jointly.
Thus, individual accounts play a major role in the formation of long-term information about dividends and taxes, while consolidated accounts contain only additional information of an economic nature.
The following forms are included in the annual report:
– individual reports of the parent company;
– management report;
– group reports, if any;
– group management report;
- an opinion of an auditor appointed by law on annual reports;
– a report on the directions for the use of profits, proposed for consideration at the annual general meeting of shareholders, as well as their resolution on the proposed option for the distribution of profits.
Consolidated reporting consists of a balance sheet, income statement, statement of changes in equity (voluntary breakdown) and cash flow statement (not required for shareholders, however, many French companies publish it).
The forms of the consolidated balance sheet and income statement comply with the requirements of the Fourth EU Directive. The income statement should highlight operating income and expenses, financial income and expenses, emergency items, taxes.
The group of companies prepares a statement of changes in share capital, showing its dynamics for three years. However, neither the balance sheet nor the explanatory notes provide information on how the share capital was formed (number of issued shares, premium per share). More detailed information is contained in the financial statements of the parent company.
Depending on the size of the company, there are three options for individual reporting.
The balance gives an idea of financial condition of the company as of a given date, including assets, liabilities and equity, indicative of the rights and obligations of the company and reflecting the funds used by it. The balance sheet discloses the composition of assets: land, buildings, structures, other objects.
The accumulated depreciation amount is shown for both non-current and current assets. Information on current assets is followed by detailed information on prepayments, deferred expenses, translation differences.
The equity section contains information about issued shares and their par value.
Let us give an approximate composition of the indicators of the annual financial statements of companies that are formed in the French accounting system.
The Chart of Accounts for France was developed in 1979 and adopted by the French National Accounting Council in 1982. Over the next two years, it was put into practice.
The Chart of Accounts, called the Plan Comtable General (PCG), takes into account the requirements of the Fourth Directive of the European Union (EU) on the annual reporting of limited liability companies. It was adopted in July 1978 with the aim of presenting reliable and objective data on performance, property and financial position for the reporting year in limited liability companies.
Assets
Liabilities
issued unclaimed capital; sustainable assets; intangible sustainable assets; company formation costs; costs for Scientific research; patents, licenses, trademarks and other rights and assets; goodwill; other intangible stable assets; installment payments on account of amounts due; tangible sustainable assets; Earth; building; machines, equipment and tools; other tangible assets; tangible sustainable assets of construction in progress; installment payments on account of amounts due; investments; shares of associated companies; amounts receivable from associates; other investments in stable assets; other debts receivable; other investments; current assets; inventory and work in progress; raw materials; unfinished production; finished products; goods for resale; payments on accounts and deposits; debtors; debt of trade enterprises; other debtors; declared outstanding share capital; investments; investments in own shares; other investments; cash in the bank and cash desk; advance payments and accumulated income; advance payments; accumulated income;
exchange rate difference
capital and reserves;
paid up share capital;
share premium;
revaluation reserve;
statutory reserve;
a reserve provided for by the company's charter or contract;
other reserves;
profit and loss account balance;
profit or loss for the reporting period.
Total own funds:
subsidies; costs associated with legislative acts; reserve of forthcoming payments; reserve for repayment of liabilities; reserve for the repayment of penalties; creditors; marketable bonds; other bonds; loans and individual lenders; deferred payments; debt to commercial enterprises; taxes and deductions for social insurance; fixed capital debt; other creditors
TOTAL assets
TOTAL liabilities
Figure 3 - The structure of the balance sheet of companies in the French accounting model
This document defines the requirements for generating data for each item of the balance sheet and income statement. Moreover, the requirements of the directive apply not only to limited (partial) liability companies, but also to joint-stock companies, limited partnerships, etc. This directive contains the methodological foundations that underlie the order of entries in the accounts presented in the national chart of accounts of France. The fact is that the chart of accounts contains not only the nomenclature of accounts and instructions for its use in practice, as well as notes to each account, but also unified forms of financial statements, instructive recommendations for their preparation.
Balance sheet accounts are used in the process of financial accounting to draw up a balance sheet, which, along with the profit and loss statement and its appendices, is the main source of analysis and financial diagnostics, as it is a numerical model of the financial life of an enterprise. Balance accounts include accounts of classes 1-5 (see Fig. 4).
Figure 4 - Classification of balance sheet accounts in the national plan of accounts of France
Class 1 “Capital accounts”, the number of which begins with the number one, includes the capital account itself, the accounts of financial results of both previous and reporting periods, accounts of types of estimated reserves, long-term and short-term loans and accounts payable equivalent to them.
Class 2 "Accounts of tangible and intangible fixed assets and financial investments" contains not only directly accounts for recording intangible assets, fixed assets, financial investments (in authorized capital, bonds, shares, shares, bonds, etc. with a maturity of more than a year), but and accounting accounts in progress capital investments, depreciation of assets, estimated reserves for them.
Class 3 "Accounts of stocks and work in progress" includes accounts of types of stocks: raw materials, materials, finished products, goods, materials in transit, as well as an allowance account for depreciation of both working capital and work in progress.
In class 4 “Settlement accounts”, the main groups of debtors are identified, which are debtors and creditors in relation to the company. For these groups, accounting is organized for the accounts of suppliers, buyers, personnel, the state, social organizations, reserves for depreciation of accounts, etc.
Balance sheet accounts that account for investments in financial assets, commercial liabilities for a period of less than one year, as well as cash accounts, are included in class 5 “Financial accounts”.
The operational accounts used in the French chart of accounts include accounts grouped in grades 6 and 7 (Fig. 5).
Figure 5 - Classification of operational accounts in the National Chart of Accounts of France
The accounts included in class 6 "Cost accounts by elements" are used to generate costs in the context of purchases ( material assets purchased for production and household needs), outside services, taxes, staff costs, depreciation charges and estimated reserves, financial costs, extraordinary costs, income tax.
Class 7 "Income accounts by type" combines income in the form of sales proceeds, other receipts, for example, from financial activities, unused valuation reserves, income from long-term contracts of an incomplete (partial) nature, etc.
Special accounts, which are grouped in class 8, are off-balance sheet and are used to account for liabilities, property, sources of its formation that are not the property of the company.
Class 9 "Accounts of analytical operation", or accounts of operational accounting, consist of a set of accounts used in management accounting to generate information necessary for making operational, tactical and strategic decisions. In addition, the goals of management accounting, implemented, in particular, with the help of operational accounting accounts, are the calculations of financial results of activities by responsibility centers, profit centers and business segments.
2013-10-10
Accounting objects and their classification
Commercial;
Tax (based on commercial reporting data adjusted in accordance with tax rules).
Commercial reporting can be drawn up as a balance of results and a balance of assets. The distribution of items by reporting periods between adjacent periods is applied in the preparation of the commercial balance of results only and includes deferred taxation.
The development of accounting in Germany has recently been associated with the use of international financial reporting standards (IFRS), US GAAP, but in general the German accounting system continues to be purely national.
Small companies are only allowed to draw up tax reporting, large joint-stock companies must form a consolidated balance sheet. For limited liability companies, joint-stock companies and limited partnerships, reporting is mandatory. The annual report of these organizations consists of a balance sheet, a profit and loss statement, as well as annexes to them.
Applications - equivalent part annual report. They disclose the data of the balance sheet, as well as the profit and loss statement, in particular, information is provided on the methods for assessing property and obligations on participation in other companies, on long-term obligations, the number of employees, as well as on the salaries (income) of managers and members of the board.
Based on the annual report, a report on commodity (warehouse) stocks is compiled. This report is not part of the annual report. It is designed to obtain the necessary additional information for making managerial decisions.
The same role is played by data on sales at home and abroad, the development of personnel, the liquidity of the company and the prospects for its development.
Benefits for small and medium-sized companies in relation to reporting depend on a number of indicators.
Small companies can publish an abbreviated balance sheet, large companies are required to take the full balance sheet as a basis, medium-sized companies must also develop a balance sheet according to the full scheme, and they can publish an abbreviated balance sheet.
For each balance sheet item, an indicator of the previous year should be given. The reflection of the funds should represent their development. It is necessary to show data on long-term claims and liabilities. Estimated obligations of all types are indicated by the total amount.
The liability of the shareholders is limited to the amount of the authorized capital of the company. Until recently, this amount had to be at least 50,000 euros for limited liability companies and 100,000 euros for joint-stock companies.
The authorized capital is reflected at face value.
Reserve capital is formed when additional funds are contributed by shareholders or when shares are issued. It is designed to strengthen the company's equity base. Accumulation of profits reflects only the amounts that were received as an annual total. They increase the capital investment of the company. The Law on Joint Stock Companies determines that the reserve capital must be 10% of the share capital. It is created from the transfer of profits or from voluntary contributions.
Profit (loss) carry forward is the remainder of the previous year's profit (loss).
For a limited liability company reserve capital not established by law. This amount should be such that the forthcoming economic deficit can be overcome without changing the amount of fixed capital.
Capital reserves and accumulated profit form open reserves, which must be presented separately in the balance sheet. Hidden reserves are not reflected in the balance sheet. They arise when property is undervalued or when deductions to the reserve fund are overestimated. Full write-off low value funds in the first year is a legitimate opportunity for the formation of hidden reserves.
Companies are required to present in the balance sheet or in an appendix to it data on the dynamics of individual items of fixed assets. The reflection of fixed assets gives a complete picture of the write-off policy of their value and the investment of the company.
Annual report of a limited liability company. This report is prepared by the case manager. For small companies, the deadline for submitting the annual report is six months, for other organizations - three months.
The annual report and the inventory report of small and medium-sized companies, after being compiled, are checked by an auditor who has a special permit for this. For small companies, mandatory verification is not required.
If a limited liability company has an internal control body, it must evaluate the annual report, the stock status report and the auditor's control report. These documents are presented to shareholders, who make an opinion on the annual report and on the use of profits.
As a rule, the annual report is prepared before the distribution of profits.
The sequence of calculation - from determining the annual result to the transfer of profit (loss). The result of the financial year is the annual surplus (+) or deficit (-).
Profit (loss) carry forward calculation formula:
Profit (loss) carryover from the previous year + Withdrawals from reserve capital + Withdrawals from profit accumulation - Contributions to the profit accumulation fund - Profit distribution (dividends) = Profit (loss) carry forward.
For the board of directors of a joint-stock company, the same rules for working on a report apply as for a limited liability company. The final balance, however, is often drawn up after using part of the annual profit. The conditions of control correspond to the conditions of control in a limited liability company. The profit shown in the balance sheet is the profit that the general meeting proposes for distribution.
Any change in the use of property or debt results in a change in the total of the financial year. To ensure the protection of the interests of creditors and the correct payment of the annual tax, it is necessary to adhere to the statutory valuation requirements. These requirements apply to all companies regardless of their legal form and size.
The commercial balance is the basis of the tax balance. Only those companies that are required to publish an annual report draw up a separate tax balance sheet.
When compiling the annual report, the provisions of the tax legislation are taken into account in relation to the assessment of the indicators included in it, in particular, the cost of acquisition and production, the residual value of acquisition and production, the value at the time of assessment. Acquisition cost includes all the costs that are necessary to acquire an object and bring it to a condition in which it is fit for use. This includes the purchase price, overheads, subsequent acquisition costs and depreciation.
The cost of production includes at least all direct costs of production. Appropriate indirect costs may also be taken into account.
Under residual value the difference between the acquisition cost and the cost of a planned or unscheduled write-off of an object is understood.
The value at the time of valuation is the generalized exchange or market price.
When assessing assets and liabilities, it is necessary to follow a number of established rules (principles), the main of which are: the principle of a separate assessment; the principle of caution; the principle of constancy; the principle of underestimation for fixed and current assets; the overvaluation principle for debt; lost profits should not be indicated; unrealized losses must be reported.
Let us give an approximate composition of indicators of the main forms of annual financial statements of joint-stock companies, which are formed in the German accounting system (Figure 2).
Assets |
Liabilities |
Fixed capital and financial assets: real estate, machinery and equipment; land and other real estate: a) with administrative, factory buildings, b) with residential buildings, c) without building; – buildings on land not belonging to the community; machine tools and machines; production and office equipment; construction in progress and advance payments for buildings and equipment; financial assets; investments in subsidiaries and branches; investments in long-term securities; loans for a period of at least four years, including those with a mortgage |
Shareholding and Liabilities: 1. Capital: ordinary shares; preference shares. |
2.Current assets |
2 Retained earnings |
inventories; raw materials and supplies; unfinished production; finished goods and goods for resale; spare parts; advance payments to suppliers; accounts receivable for goods and services; bills receivable; checks; cash on hand, the Federal Bank and on current accounts; cash in banks; temporary investments in securities; treasury bills; receivables of branches; accounts receivable of members of the board of directors; other current assets |
in accordance with the charter of the joint-stock company; balance at the beginning of the period; income from the sale of shares at the market rate; deductions from net income; reserve for investments in treasury bills; balance at the beginning of the period; deductions from net income. |
3.Advance payments and deferred expenses |
3. Special capital reserves |
4.Reserve to cover cashless debts |
|
5. Other reserves: pension reserve; operating cost reserve; other reserves |
|
6. Liabilities with a term of at least four years: liabilities to the bank; other obligations. |
|
7.Obligations to the joint-stock company |
|
8.Other liabilities: accounts receivable to trade enterprises; receivables on bills of exchange; advance payments received; accounts receivable to branches; other obligations |
|
9. Deferred loans |
|
10. Remaining retained earnings |
|
TOTAL assets |
TOTAL shareholding and liabilities |
Figure 2 - The structure of the balance sheet of a joint-stock company in the German accounting model
Let's move on to the characteristics and features of the balance sheet in the French accounting model.
2.3 Accounting in ahfywepcrjq accounting system
The main feature of the French accounting system is its legal nature, since accounting is regulated by commercial and tax legislation. Moreover, the legal environment is such that the very existence of a regulatory norm does not necessarily mean that companies follow it unquestioningly. There are no penalties for non-compliance with certain legal requirements. Sometimes no mechanism has been developed to ensure compliance with the law, and in some cases there are tacit agreements that allow ignoring certain regulations.
Accounting is intended to reflect and classify the information necessary to achieve its objectives, to the extent that the information can be quantified, in particular:
– information on major transactions should be immediately reflected in the accounting so that it can be used in a timely manner;
- accounting information should allow users to obtain a reliable, unambiguous and complete picture of business transactions, events and circumstances;
- the sequence of reflection of accounting information for a number of financial years implies the continuity of the application of rules and procedures. Any departure from the principle of consistency must be explained by reference to better information;
– if accounting rules are modified in the period in which the change is reflected, any relevant information about the accounting adjustments associated with the modification should be shown along with the information prepared on the basis of the new accounting rules.
The principles of building French accounting can be divided into traditional and due to accession to the EU regulatory framework.
The main directions of development of accounting in France are bringing it into line with current changes in commercial legislation and developing a uniform approach to reporting consolidation.
In the accounting of most large companies, elements associated with traditional French accounting practices suddenly appeared, which they did not fully comply with, as well as following US accounting practices and applying international financial reporting standards.
The classification and order of reflection of individual accounting objects in France are quite specific. The accounting process is inextricably linked with the approved working chart of accounts, which must comply with the requirements of the unified national Chart of Accounts.
Reporting prepared on the basis of individual accounts is subject to mandatory requirements established by law. Accounting must comply with the Accounting Act, the 1983 Decree and the Fourth EU Directive. The balance sheets of individual companies are more detailed than the consolidated ones and are compiled according to the established format
The classification of financial accounts is reduced to the allocation of two classes of balance sheet elements:
Assets showing the amount of investment in the company;