TUGAS I AKUNTANSI INTERNASIONAL CHAPTER 2

DEVELOPMENT AND INTERNATIONAL ACCOUNTING CLASSIFICATION

PUTRI AYU PUSPA RENGGANIS

20208970

4EB11

Factors that affect the accounting world

Eight factors that have significant influence in the development of accounting :

1. Taxation

In Germany and Sweden, the tax rules effectively determines accounting standards because the company should record revenue and expenses in the account for the claimed for tax purposes. While in the Netherlands is different, the taxable income is basically the accounting profit adjusted for differences in tax law. America sets the example of inventory valuation according to the "Last Log Out ​​First" (last-in, first-out, LIFO).

2. Culture

Culture means the values ​​and behaviors that are shared by a society. Cultural variables underlying institutional arrangements in a country.

3. Level of economic development

These factors influence the types of business transactions are conducted in an economy and determine what is most important. Accounting issues such as assessment and recording of depreciation of fixed assets that are highly relevant in the manufacturing sector is becoming increasingly less important.

4. Sources of funding

United States and Britain who have a strong equity market, accounting has focused on how well management runs the company (profitability), and is designed to help the investor considers the future cash flows and the associated risks, while the credit-based systems, have focused on the protection of creditors through the measurement conservative accounting. Japan and Switzerland are examples of countries that consider public disclosure is widely considered to be necessary, because financial institutions have direct access to what information is desired.

5. Inflation

inflation causes the distortion of historical cost accounting and affect the propensity (tendency) of a country to apply the price changes to the accounts of the company. Israel, Mexico and several South American countries using the general price level accounting because of experience with hyperinflation.

6. The legal system

The western world has two basic orientations: the legal code (civil) and common law (case). The main code of law derived from Roman law and the Code Napoleon. In code law countries, accounting rules are incorporated in national law and tend to be very comprehensive and covers many of the procedures. While the common law developed on a case by case basis without any attempt to cover all cases in which a complete code and accounting rules become more adaptive and innovative as a professional organization established by the private sector.

7. Level of education

Accounting standards and practices are very complicated (sophisticated) will be useless if misunderstood and misused. Disclosures about the risks of derivative securities will not be informative unless it is read by the competent authorities.

8. Political and economic ties

Recording system in pairs (double-entry) that began in Italy in the 1400's and spread to Europe along with the ideas of reform (renaissance) others. UK export accountants and accounting concepts in the entire territory, the German occupation of France during World War II led to apply the Plan Comptable. The United States forced the U.S. style of accounting regulatory regimes in Japan after World War II. Many developing countries use accounting system that was developed elsewhere, either because they were forced (like India) or by choice (such as Eastern European countries).

Accounting developments in market-oriented economy

Initial classification was proposed by Mueller in the mid-1960s, which identified four approaches to the development of accounting in Western countries with market-oriented economic system :

1. Based on an independent approach

Under this approach, derived from accounting and business practices developed on an ad hoc, on the basis of considerations slowly, to try and error. Accounting services is seen as a function of the concepts and principles taken from the business process being run, and not from the branches of science such as economics, for example, the United Kingdom and the United States.

2. Based approach to macroeconomic

Under this approach, obtained from the accounting practices and are designed to improve the national macroeconomic objectives. Let's say, to encourage the development of certain industries, a country can allow rapid removal of capital expenditure on some of the industry, for example, the Swedish state.

3. Based on a uniform approach

In this approach, standardized accounting and is used as a tool for administrative control by the central government. Uniformity in the measurement, disclosure, and will facilitate the presentation of the designer of government, tax authorities and even managers to use accounting information in controlling all types of businesses, and the approach used in countries with greater government involvement in economic planning in which the accounting is used, among others for measuring performance, allocating resources, collect taxes and control prices, for example, is the French state.

4. Based on microeconomic approach

In this approach, accounting evolved from the principles of microeconomics. The focus is on individual companies that have the purpose of survival by maintaining physical capital owned and clearly separates capital from profits to evaluate and control the business activities, such as the Netherlands.

The dominant state in the Development of Accounting Practices

Some countries are dominant on the development of accounting include:

(1) France

(2) Japan

(3) United States

In the progress the countries France and Japan are less dominant than the United States. It can be seen from the development of Japanese accounting in its development is currently based on existing IFRS.

Accounting Classification

Classification in question is how to distinguish the classification or comparison of the financial accounting system of national and regional levels. Classification is fundamental to understand and analyze why and how the national accounting system is different. We can also analyze whether these systems tend to converge or differ.

The purpose of classification is according to the financial accounting system mengelompkkan particular characteristics. Classification reveals the basic structure in which the members of the group have in common and that distinguish the groups varied from each other. By identifying similarities and differences, our understanding of the accounting system will be better. Classification is a way to see the world.

The purpose of classification is according to the financial accounting system mengelompkkan particular characteristics. Classification reveals the basic structure in which the members of the group have in common and that distinguish the groups varied from each other. By identifying similarities and differences, our understanding of the accounting system will be better. Classification is a way to see the world.

The difference between fair presentation and compliance with state law and where the dominant application

Hundreds of companies today listed its shares on stock exchanges outside their home country, with internationally-listed shares of dual financial reports. A set of reports in accordance with the provisions of the local domestic financial reporting, and another using accounting principles and contains a disclosure that is addressed to international investors. Multiple reports now enforced in code law countries, like France, Germany and Italy, where the consolidated financial statements in accordance with other standards, such as the International Financial Reporting Standards (International Financial Reporting Standards-IFRS) or generally accepted accounting principles of the United States (Generally --- accepted Accounting Principles GAAP). In 2005, all European companies that do have to set a stock listing IFRS for their consolidated financial statements. The bottom line is necessary distinction between the accounting practices at the national and transnational levels.

Some state codes of law, in particular Germany and Japan, to transfer responsibility of the government's establishment of accounting standards to the private sector and independent professionals, so that standard-setting process to be similar to the process in common law countries such as Australia, Canada, Britain and the United States.

The importance of the stock market as a source of funding is growing around the world, especially developing countries from centrally planned economies into market-oriented, such as China and the Czech Republic.

Accounting for fair presentation is found in Britain, the United States, the Netherlands and other countries affected by political and economic ties (such as the UK affect the former British territory, and the United States affect Canada, Mexico and the Philippines).

Many companies are derived from code law countries (such as German companies and Swiss) now use IFRS in preparing the consolidated financial statements. Some Japanese companies using U.S. GAAP in the consolidated financial statements are prepared. After 2005, all listed shares of European companies will use fair presentation of accounting in consolidated statements because they will be using IFRS which is the reference standard that is currently being developed in Japan and China.

Important issues with the difference between the fair presentation of compliance with the law

The difference between fair presentation and conformity of law pose a major influence on many accounting issues, such as:

1. Depreciation, where the load is determined based on the reduction in the usefulness of an asset over the useful economic (fair presentation) or the amount allowed for tax purposes (legal compliance);
2. Lease which is substantially the purchase of fixed assets (property) treated as such (fair presentation) or treated as operating leases are common (legal compliance);
3. Accrued pension cost at the time generated by the employee (fair presentation) paid or charged on the basis of the time you stop working (legal compliance).
   
   

Classification is based on fair presentation explaining accounting versus legal compliance at this time. The distinction between fair presentation and conformity of law pose a major influence on many accounting issues.

And fair presentation of substance over form is the main feature of the accounting law. Accounting for common law oriented to the needs of decision-making by outside investors. The financial statements are designed to assist investors in assessing management performance and estimates of cash flow and profits in the future. Compliance with accounting laws are designed to comply with government imposed such as the calculation of taxable income or comply with the national government's economic plan.