国际会计第三章

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France (to be continued)

Accounting measurement (p45-46)




Tangible assets Depreciation expense of fixed assets Inventory being measured at the lower of cost or realizable value R&D expensed as incurred in general R&D capitalized in restricted circumstances with less than five year amortization Financial lease not capitalized Liabilities of post-employment benefits not recognized
France (to be continued)

Unusual features of French financial reporting


Must report results of environmental activities Reports aimed at preventing bankruptcies Social report No requirements for a statement of changes in financial position or a cash flow Being prepared in compliance with legislation and in good faith
France

Overview (page 41)


“The Plan” – national uniform chart of accounts (national accounting code) Objectives and principles of financial reporting Definitions of elements Recognition and valuation rules Standardized chart of accounts Model financial statements Other influences on French accounting rules Commercial legislation (Code de Commerce) Tax laws
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IFRS in the European Union (page 39)



Starting in 2005, all EU-listed companies must follow IFRS in their consolidated financial statements. Generally, IFRS consolidated statements are permitted for non-listed companies. Requirements for individual company financial statements vary – IFRS may be required, allowed, or prohibited.
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IFRS (to be continued)

Accounting measurements



Translation of financial statements of foreign operations – functional currency concept (p130) Assets valued at historical cost or fair value Research costs – expensed; development costs – capitalized LIFO not allowed Finance leases – capitalized; operating leases – expensed Provisions – recognized when probable and estimable Deferred taxes – recognized in full, using the liability method, for temporary differences between the carrying amount and tax base
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France (to be continued)

Accounting regulation and enforcement (p43)



CNC – National Accounting Board Keeps plan current Makes rulings and recommendations on accounting issues CRC – Accounting Regulation Committee Converts CNC rulings and recommendations into binding regulations Real regulatory power AMF – Financial Markets Authority (French equivalent of the U.S. Security Exchange Committee) Supervises securities markets 11 Two divisions
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France

Overview Focus on needs of creditors and tax authorities Consolidated groups can report in U.S. GAAP or IAS Company law and tax law are the predominant influences Focus on national economic planning Tax laws tend to override accounting rules Small accounting profession established by law OECand CNCC for public accounting and auditing Accounting and auditing profession are separate Small stock market Most capital contributed by banks, government, or family French equivalent of the SEC – Financial Markets Authority or AMF) 9 IFRS required for listed companies in 2005

Penality Voluntary supply more information Permission to not comply with accounting standards if……


Question: Does the relationship between accounting standard and practice always move in a one-way direction? Supply and demand of information (page 39)
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The relationship between accounting standard and practice

The definition of accounting standard Does accounting practice always follow what accounting standard requires? (page 38)
International Accounting, 6/e Frederick D.S. Choi Gary K. Meek
Chapter 3: Comparative Accounting: Europe
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Learning Objectives




Understand how financial reporting is regulated and enforced in four European countries: France, Germany, the Netherlands, and the U.K. Describe the key similarities and differences between the accounting systems of these five countries. Identify the use of International Financial Reporting Standards at the levels of the individual company and the consolidated financial statements in these five countries. Describe the audit-oversight mechanisms in these five countries.


Goodwill- the difference between the fair value of the consideration given and the fair value of the subsidiary’s assets, liabilities, and contigent liabilities. Goodwill-annual impairment test Negative goodwill – being immediately recognized in income