International Business

International Accounting

Introduction

International accounting is moving towards one global accounting standard, IASB and FASB are working together to create accounting standards which are likely to become the most preferable accounting standard. IASB and the European Union have so far made it compulsory by 2005 for listed company in European to follow the new standards. (Economist 20th December 2003).

There are certainly many advantages by introducing one global accounting standard, but it has undoubtedly met fierce resistance towards the new approach. The process of introducing one global accounting standard is definitely not easy, as it involves many countries, governments, investors, companies, and so on, but it however furthermore involves the countries social development and their culture, which can provide vast transformation.

FASB and IASB have in 2006 published the first part of the proposal for their new joint conceptual framework, a significant step towards using only when set of international accounting standards.

The once talking the most warmly of harmonisation of the international accounting standards are investors, as they today have to use many resources recalculation and reformations of the reporting from the international companies.

The big question concerning one global accounting standard, is if that one can fit “all”?

“All” relating to:

 All companies (MNE, Small, Medium, Large, Listed, Unlisted, Profit-making-Charities, and so on.)

 Investors (Internationally, nationally, ethically, and so on.)

 Governments

 Banks

 Financial Institutions

 Etc.

To examine the question if one size can fit all when it comes to global accounting standards, as this is not an easy or simple question will it requires to look into several aspects concerning:

Key players

Types of companies/players

Accounting models

Other issues

Conclusion

This structure will provide an attempt to predict the future, in which everyone only can conjectures.

Key players

Key players in international accounting standards is primarily the prepares, who regulates and issues the international accounting standards, users which in practise apply the international standards to either their company or knowledge, regulators make the international accounting standards a reality.

Users

Multinational companies

The users for international standards are many; first and foremost are the listed and multinational companies the ones who use the standards to present useful information. They use the standards for making financial reports there can attract investors and thereby liquidity for merger and acquisitions. Today there is just that problem that it can be difficult for investors to compare companies in different countries with diversity in how the financial