国际会计第七版课后答案(第四章) 作者：弗雷德里克

Chapter 4
Comparative Accounting: The Americas and Asia
Discussion Questions
1. Public and private sector bodies are involved in regulating and enforcing financial reporting in the
United States. The Financial Accounting Standards Board is a private sector body that determines U.S. generally accepted accounting principles. The Securities and Exchange Commission has the authority to determine U.S. GAAP for publicly held companies, but defers to the FASB. The FASB and SEC have a close working relationship that ensures that FASB standards are acceptable to the SEC. The SEC enforces financial reporting rules for publicly held companies. It actively reviews the filings that companies make. Auditors are the enforcers for non-publicly held companies.
Accounting standards in Mexico are issued by the Council for Research and Development of Financial Information Standards (CINIF), an independent public-private sector body patterned after the U.S. FASB. Its authority for issuing Mexican accounting standards is recognized by the National Banking and Securities Commission, the government agency that regulates the Mexican Stock Exchange. The Commission is responsible for enforcing financial reporting standards for listed companies. However, it is unclear how proactive the Commission is in investigating filings that it receives. Enforcement of financial reporting for non-listed companies effectively rests with auditors.
Japanese accounting standards are set by a private sector body, the Accounting Standards Board of Japan. The establishment of the ASBJ is a recent development in Japan. Before, accounting standard setting was a government activity. Enforcement of financial reporting effectively rests with auditors. The stock exchange is regulated by the Financial Services Agency, a government body. However, it is unclear how proactive the FSA is in monitoring financial reporting by Japanese companies.
Accounting standard setting is a government activity in China. The China Accounting Standards Committee is the authoritative body within the Ministry of Finance responsible for developing accounting standards. The China Securities Regulatory Committee is the government agency that regulates China’s two stock exchanges. The CSRC is also responsible fo r enforcing financial reporting for listed companies. Many question the effectiveness of the Chinese enforcement mechanism.
The Institute of Chartered Accountants in India, a private sector professional body, develops accounting standards in India. The Securities and Exchange Board of India, an agency of the Ministry of Finance, regulates India’s 22 stock exchanges and is responsible for enforcing financial reporting rules. However, it is unclear how proactive the board is in monitoring financial reporting by Indian companies.
Overall, the five countries vary in terms of private versus public sector responsibility for regulating and enforcing financial reporting. Enforcement is questionable in several countries.
The United States has the strongest mechanism for regulating and enforcing financial reporting of the five countries.
2. The United States and India are common law countries that have fair presentation oriented
financial reporting. Mexico also has fair presentation oriented financial reporting because of U.S.
influence. In addition, Mexico has inflation-adjusted accounting, in contrast to the other four countries. Japan is a code law country and its accounting has traditionally been characterized as conservative and tax-driven, just like other code law countries (such as France and Germany discussed in Chapter 3.) However, it is moving to fair presentation because of its commitment to converge Japanese accounting standards with IFRS. China is likewise moving toward fair presentation oriented accounting by adopting IFRS as Chinese GAAP. Despite adopting fair presentation principles, one can question whether the Chinese achieve it in application. There is an acute shortage of trained accountants in China and the profession remains undeveloped. The accounting profession is strong in the other four countries, including the “developing” economies of India and Mexico.
3.The auditor oversight bodies discussed in this chapter are:
a.United States – Public Company Accounting Oversight Board
b.Japan – Certified Public Accountant and Auditing Oversight Board
The recent establishment of independent auditor oversight bodies in the United States and Japan is in response to recent worldwide accounting scandals. Both represent tightening control over auditors.
4. Tax legislation pays a limited role in all five countries, with the exception of Japan. In the United
States, financial and tax accounting are separate except for LIFO. Tax legislation has little influence on financial reporting practices in Mexico. For example, there are numerous differences between financial and tax accounting, such as the calculation of cost of sales, depreciation, and goodwill amortization. Tax legislation has traditionally been one side of the “triangular legal syste m” in Japan, exerting an influence on Japanese accounting standards. However, the influence of taxation is declining with the alignment of Japanese accounting standards to IFRS.
Several years ago, tax legislation had some influence in China, but this has waned as China develops a more complete set of financial reporting standards. India, like other common law countries, separates financial and tax accounting.
4.This question has been of interest in academia for quite some time. Is accounting expertise a
necessary precondition for economic development, or can an economy advance without it? It would seem that an economy cannot advance very far without accounting expertise. But the relationship probably works both ways, just like demand creates supply and vice-versa.
The example of China demonstrates the importance of developing accounting (standards, knowledge, etc.). Accounting is a part of the market reform packages in China, so the need has been recognized from the start. Mexico and India have been market-oriented longer than China, and their accounting is more developed. But again, it is apparent in these two countries that accounting supports economic development.
6. U.K. standards (Chapter 3) and IFRS (Chapter 8) are said to reflect principles-based standards,
while U.S. standards (this chapter) are said to be rules-based. Generally speaking, principles-based standards set forth broad objectives and fundamentals and require professional judgment for their implementation. They are more flexible than rules-based standards and are likely to result in more divergence in practice. Rules-based standards are more specific in their requirements and have more detailed implementation guidance than principles-based standards.
They are likely to result in more comparability than principles-based standards, but are said to
foster a “check the box” mentality. The chapter says that U.S. GAAP is “probably more voluminous than in the rest of the world combined and substantially more detailed than in any oth er country.” Thus, one can argue that U.S. GAAP is rules-based.
7. The U.K. and U.S. both follow fair presentation accounting, reflecting economic substance rather
than legal form. Both the U.K. “true and fair” and the U.S. “presents fairly” reflect fa ir presentation. However, the U.K. has a true and fair override –accounting standards can be overridden if necessary to achieve a true and fair view. In the U.S., presents fairly means that generally accepted accounting principles have been followed.
8. The most important reconciling item (i.e., the most significant difference between Mexican and
U.S. accounting) relates to the use of general price level accounting in Mexico. Strict historical cost is used in the U.S. Two other differences noted in the chapter are (a) Mexico applies the equity method at 10 percent, whereas the U.S. applies it at 20 percent and (b) in Mexico development costs are capitalized and amortized after technological feasibility has been established; in the U.S., they are expensed.
9.The bursting of the Japanese bubble economy in the 1990s prompted a review of Japanese financial
reporting standards. It became clear that many accounting practices hid how badly many Japanese companies were actually doing. The accounting “big bang” was designed to make the financial condition of Japanese companies more transparent and bring Japanese accounting more in line with international norms.
Practice changes include the following:
a.Requiring listed companies to report a statement of cash flows.
b.Subsidiary companies are consolidated based on control rather than ownership.
c.Affiliated companies are accounted for using the equity method based on influence rather
than ownership.
d.Investments in securities are valued at market rather than cost.
e.Deferred taxes are fully provided.
f.Pension and other retirement obligations are accrued in full.
10.Full and complete disclosure of reliable, evenhanded information is necessary to develop a fair
and efficient stock market. The “Anglo-Saxon” model of a ccounting (discussed in Chapter 2), emphasizing a fair presentation of financial condition and results, and emphasizing stewardship, also fosters the development of a fair and efficient stock market. Countries with this accounting orientation (such as the U.S. and U.K.) have active, fair and efficient stock markets. There is also
a legal structure and an effective enforcement of laws and accounting disclosures to make it all
work.
China is developing accounting standards with the stock market orientation discussed above. So China is on the right track here –the standards themselves will support the development of a stock market. In addition, investors must have confidence that the standards are being followed,
i.e., that the information disseminated by companies is reliable. Thus, good auditing by well-
trained accounting professionals is important. China may have difficulty developing an
accounting profession, which would in turn be a hindrance to stock market development. China must also overcome the culture of secrecy developed under communism.
11.The chapter mentions a number of examples where Chinese accounting standards are consistent
with world class practices. A selective list of the more important ones are the following:
parative, consolidated financial statements including a balance sheet, income
statement, cash flow statement, and notes.
b.Accrual basis for recognizing revenues and expenses, matching, and consistency.
c.Purchase method for business combinations with annual impairments test.
d.Equity method for nonconsolidated affiliates.
e of historical cost.
f.Finance leases capitalized.
12. The British influence on accounting in India is clear. India has a common law legal system and
fair presentation accounting that accompanies it. Like Britain, financial statements must give a true and fair view and there is a strong self-regulated accounting profession. Professional accountants (auditors) are called chartered accountants in both countries. The financial reporting and accounting measurements described in this chapter for India are very similar to those described in Chapter 3 for the United Kingdom.
Exercises
1. United States
a.Financial Accounting Standards Board.
b.Securities and Exchange Commission.
Mexico
a.The Council for Research and Development of Financial Information Standards.
b.There is no definitive enforcement agency. However, the National Banking and
Securities commission regulates the Mexican Stock Exchange.
Japan
a.The Accounting Standards Board of Japan.
b.The Financial Services Agency for listed companies under the securities law and the
Ministry of Justice, when company law is involved.
China
a.The Chinese Accounting Standards Committee under the Ministry of Finance.
b.The Chinese Institute of Certified Public Accountants, under the jurisdiction of the
Ministry of Finance, regulates auditing.
India
a.Institute of Chartered Accountants of India.
b.Institute of Chartered Accountants of India.
2.At the time of writing, the following organizations were linked to IFAC’s website:
United States
Institute of Management Accountants
American Institute of Certified Public Accountants
National Association of State Boards of Accountancy
Mexico
Instituto Mexicano de Contadores Públicos
Japan
Japanese Institute of Certified Public Accountants
China
Chinese Institute of Certified Public Accountants
3.The question asked for five expressions, terms, or short phrases unfamiliar or unusual in the
student’s home country. Taking the United States as the home countr y, here are twelve:
a.Triangular legal system – A description of accounting regulation in Japan consisting of
the interacting Company Law, Securities and Exchange Law, and Corporate Income Tax
Law.
b.Socialist market economy – Used in China to describe its planned economy with market
adaptations.
nd and industrial property rights –Still owned by the Chinese government, private
companies acquire the right to use these industrial assets.
d.Pesos of current purchasing power – A term to describe general price level accounting in
Mexico.
e.Tax compliance audit report –Mexican auditors must attest that no irregularities were
observed regarding compliance with tax laws.
f.Statement of changes in financial position –the financial statement in Mexico that
corresponds to the statement of cash flow. However, the statement of changes in
financial position is prepared in constant pesos (adjusted for inflation), while the cash
flow statement uses historical cost.
g.Seniority premiums –compensation paid in Mexico at the termination of employment
based on how long the employee has worked.
h.Keiretsu– Interlocking giant conglomerates in Japan.
i.Guanxi– Relationship culture in China that is based on mutuality and mutual duties.
j.B-shares – Shares issued to foreign investors by Chinese listed companies.
k.True and fair view – The requirement in India that financial statements present a true and fair view came from Britain.
l.Amalgamation – The term used in India for a merger.
4. The most important financial accounting practice or principle at variance with international norms
is probably the following:
United States – LIFO. Driven by tax law considerations, no other country uses LIFO to the extent found in the U.S. LIFO reduces reported earnings. Because older, lower costs of inventory are shown on the balance sheet, the debt to asset ratio will be higher. Companies using LIFO must report so-called LIFO reserves that enable an analyst to convert LIFO amounts to FIFO amounts.
Mexico– Inflation adjustments. Most countries in the world value assets and related expenses at historical cost; few countries incorporate inflation adjustments. With inflation adjustments, earnings will be lower and the debt to asset ratio will probably be lower as well. It is unlikely that an analyst will be able to adjust Mexican accounts to historical cost. Of course, such an adjustment is unwise, given high inflation.
Japan–Pooling of interests method for business combinations where no party obtains control over the other. The international norm is to treat all business combinations as a purchase.
Compared to purchase accounting, pooling results in higher income and lower asset values.
Therefore, the debt to asset ratio will be higher. An analyst will be unable to adjust for this accounting method.
China– Showing the right to use land and industrial property owned by the government as an intangible asset. China is unusual in the extent to which the government owns land and industrial property. As long as these intangibles are fairly valued, there will be no effect on reported earnings or the debt to asset ratio. However, the analyst must realize that the intangible asset shown on a Chinese company’s balance sheet is a tangible asset on the balance sheets of companies from other countries.
India– Pooling of interests method for amalgamations (mergers). As noted above for Japan, the international norm is to treat all business combinations as a purchase. Compared to purchase accounting, pooling results in higher income and lower asset values. Therefore, the debt to asset ratio will be higher. An analyst will be unable to adjust for this accounting method.
5. At the time of writing, the following numbers are reported by the World Federation of Stock
Exchanges:
The significant number of listed companies in India may be surprising. It may also be surprising that the number of listed Japanese companies matches the numbers for the United States. Another potential surprise is the fact that the Mexican Stock Exchange has more foreign listed firms than domestic listed firms. Students will probably speculate that most of the foreign listed firms in Mexico are from other Latin American countries, a statement that is in fact true. The lack of foreign listed firms in China and India has two possible explanations –either the government does not allow foreign firms to list on domestic exchanges, or companies do not see these stock markets as an attractive place to raise capital. The latter explanation is why there are so few foreign listed firms in Japan.
5.A comparison of the countries in Exhibit 4-5 reveals few differences among the United States,
Mexico, and China. Thus, all three countries can claim that their GAAP are comparably oriented toward equity investors. However, of the three countries, the United States can probably claim to have GAAP most oriented toward equity investors. The chapter notes that the U.S. has the most voluminous and detailed accounting requirements in the world and that they are rigorously enforced. Thus, the nod goes to the United States.
India and Japan both allow pooling of interests accounting, an accounting treatment now at variance with international norms. The treatment of goodwill in these two countries is also at variance with international norms. In addition, Japan’s lea se accounting treatment is at variance with international norms. Thus, Japan seems to be the country whose GAAP is least oriented toward equity investors.
6.At the time of writing, the following companies are listed on the New York Stock Exchange from
Mexico, Japan, India, and China:
Mexico
America Movil
Cemex
Coca-Cola FEMSA
Desarrolladora Homex
Empresas ICA
Fomento Economico Mexicano
GRUMA
Grupo Aeroportuario del Pacifico
Grupo Aeroportuario del Sureste
Grupo Casa Saba
Grupo Radio Centro
Grupo Televisa
Grupo TMM
Industrias Bachoco
Telefonos de Mexico
Vitro
Japan
Advantest
Cannon
Hitachi
Honda Motor
Konami
Kubota
Kyocera
Matsushita Electric Industrial
Mitsubishi UFJ Financial Group
Mizuho Financial Group
Nidec
Nippon Telegraph and Telephone
NIS Group Co.
Nomura Holdings
NTT DoCoMo
Orix
Sony
TDK
Toyota Motor
India
Dr. Reddy’s Laboratories
HDFC Bank
ICICI Bank
Mahanagar Telephone Nigam
Patni Computer Systems
Satyam Computer Services
Tata Motors
Videsh Sanchar Nigam
Wipro
WNS Holdings
China
Aluminum Corporation of China
American Oriental Bioengineering
China Eastern Airlines
China Life Insurance
China Mobile
China Netcom Group
China Petroleum and Chemical
China Southern Airlines
China Telecom
China Unicom
Guangshen Railway
Huaneng Power International
Mindray Medical International
New Oriental Education and Technology
PetroChina
Semiconductor Manufacturing International
Sinopec Shanghai Petrochemical
Suntech Power Holdings
Trina Solar
Yanzhou Coal Mining
Mexico has 16 companies listed on the NYSE, ranking third after Brazil (35) and Chile (17).
This is perhaps surprising given the strong economic links between the United States and Mexico discussed in the chapter. One would expect Mexico to have the most of any Latin American country. Of the countries in the Asia-Pacific region, China has the most number of companies listed on the NYSE (20); Japan is second (19); and India is third (10). As discussed in the chapter, the economies of China and India are growing rapidly. The relatively large numbers of NYSE listed Chinese and Indian companies probably reflect a need for capital by their larger companies. That Japan has approximately the same number of NYSE listed companies as China is perhaps surprising. However, the chapter discusses how debt financing dominates equity financing in Japan.
8. a. The two major areas of difference are asset valuation and accounting for goodwill. In the
U.K., assets may be valued at historical cost, current cost, or a mixture of the two. When
fixed assets are revalued, depreciation and amortization must be calculated using the
revalued amounts. Only historical cost is allowed in the U.S. In the U.K., goodwill can
be impairments tested, as in the U.S., but may also be amortized over 20 years or less.
Other differences between U.K. and U.S. GAAP relate to LIFO and the calculation of long-term deferred taxes. LIFO is rarely used in the U.K., but is relatively more common
in the U.S. In the U.K., long-term deferred taxes may be valued at discounted present
value. Finally, opportunities for income smoothing are probably greater in the U.K. than
in the U.S.
b.Research has documented that U.S. GAAP earnings is systematically more
conservative than U.K. GAAP earnings (see, for example, P. Weetman and S.J. Gray,
International Financial Analysis and Comparative Corporate Performance: The Impact
of U.K. versus U.S. Accounting Principles on Earnings, Journal of International
Financial Management and Accounting(Summer & Autumn 1990), pp. 111-130).
However, many of the accounting principles on which this research study is based have
now changed.
Goodwill accounting should result in a more conservative income amount for U.K.
companies if they systematically amortize it over 20 years. However, the occasional
impairments write-downs that U.S. companies will have will result in a lower income
amount in the year of write-down. The use of LIFO in the U.S. will result in more
conservatively measured U.S. income amount. However, U.K. companies will report
lower earnings if assets are revalued, because corresponding depreciation charges will be
higher. The effects of U.K. smoothing activities are unclear, but it seems likely that
companies would be more inclined to smooth toward higher earnings rather than lower.
On balance, we think that U.S. companies will have somewhat more conservative
earnings amounts, but U.K and U.S. GAAP are converging.
9. The chapter identifies the following major changes that have occurred since the Japanese “big
bang”:
rge companies must prepare consolidated financial statements, not just listed ones.
b.Listed companies must report a statement of cash flows.
c.Consolidation is based on control rather than ownership.
e of the equity method is based on significant influence rather than ownership.
e.Goodwill is calculated based on fair market value of net assets acquired rather than book
value.
f.Goodwill is amortized over 20 years rather than 5 years. It is also impairments tested.
g.Investments in securities are valued at fair market value rather than cost.
h.Inventory is valued at the lower of cost or net realizable value rather than cost.
i.Deferred taxes are now fully provided.
j.Pension and other retirement obligations are now fully accrued.
k.Research and development is now expensed rather than deferred in some cases.
l.For foreign currency translation, revenues and expenses are now translated at the average rate (rather than a choice between year-end or average rates) and the translation
adjust ment is in stockholders’ equity (rather than shown as an asset or liability).
10.The chapter identifies the following major changes that have occurred in Chinese accounting since
the 1990s:
a.The ASBE issued in 2006 represent a comprehensive set of Chinese accounting standards
that are substantially in line with IFRS.
b.The ASBE issued in 2006 also contains auditing standards similar to International
Standards on Auditing. All Chinese accounting firms and auditors are required to follow
these audit standards.
c. A cash flow statement is now require
d.
d.Goodwill is impairments tested rather than amortized.
e of the equity method is based on influence rather than ownership percentage.
f.Consolidation of subsidiary companies is based on control rather than ownership
percentage.
g.Foreign currency translation of overseas subsidiaries is based on the primary economic
environment in which they operate.
h.Tangible assets are depreciated over their expected useful lives rather than based on tax
law.
i.Lower of cost or market is now used to value inventory.
j.LIFO is no longer an acceptable inventory costing method.
k.Finance leases are now capitalized.
l.Deferred taxes are now provided in full for all temporary differences.
m.Contingent obligations are now provided for when they are both probable and a reliable estimate can be made of their amount.
11.
12. a. Japan and India allows pooling, while the others do not. Pooling usually results in lower
noncurrent asset amounts and higher income amounts. Goodwill and subsequent
amortization is also excluded under pooling. To the extent that pooling is used by
Japanese and Indian companies, they are likely to have higher debt to equity and debt to
asset ratios. The numerator (return) and the denominators (assets and equity) in the two
profitability ratios should all be higher, but the effect on the ratio is indeterminate.
Liquidity ratios should be unaffected.
b.Japan and India both require goodwill to be capitalized and amortized. This should have
no effect on the either liquidity ratio. The amortization will result in a lower amount of
income going to retained earnings. Thus, the debt to equity ratio will be higher than what
it would be without amortization. The debt to asset ratio will also be higher. The effect
on the profitability ratios is unclear. The numerator (income) will be lower than what it
would be without amortization. However the denominators in each case (assets and
equity) will also be lower.
c.The equity method is used in all five countries, so there is no effect on comparative ratios.
d.Price-level adjusted accounting is practiced in Mexico and Indian companies may revalue
their tangible assets to current values. The result is higher asset values, higher equity, and lower income (because of higher depreciation and cost of goods sold charges), compared to historical cost. The current ratio will be higher, but cash flow from operations to current liabilities will be unaffected. Both solvency ratios will be lower because their denominators (assets and equity) will be higher. Both profitability ratios will be lower. The numerator (income) will be lower and the denominators (assets and equity) will be higher.
e.Depreciation in Japan is tax-based, which is normally higher than economics-based
depreciation. This will reduce income and lower the profitability ratios. The more rapid write-off of fixed assets will cause lower total asset values. Thus, the debt to asset ratio should be higher. The debt to equity ratio and both liquidity ratios should be unaffected.
f.LIFO is used in the United States. It is permitted in Japan, but not widely used.
Companies using LIFO should have lower income, so lower profitability ratios.
Inventory will probably be lower, causing the debt to asset ratio to increase and the current ratio to decrease. Cash flow to current liabilities will be unaffected. With less income going to retained earnings, the debt to equity ratio will be higher.
g.Probable losses are accrued in all five countries, so there is no effect on comparative
ratios.
h.Not all finance leases are capitalized in Japan. Companies will report comparatively
lower noncurrent liabilities and noncurrent assets. Income will also be affected, but the amount is probably immaterial. The liquidity ratios should be unaffected. Both solvency ratios should be lower and return on assets will be higher. The effect on return on equity is probably immaterial.
i.Deferred taxes are accrued in all five countries, so there is no effect on comparative ratios. j.Some opportunity for income smoothing exists in India. Income smoothing has an indeterminate effect on income in any given year. Therefore it is not possible to know how the profitability ratios are affected. The effect of creating reserves is to shift amounts that would otherwise be in retained earnings into the reserve accounts. Since both of these are in shareholders’ equity, this total is unaffected. Therefore, the solvency ratios are likely to be unaffected. The two liquidity ratios will be unaffected.。