International Financial Statement Analysis, 3rd Edition

CHAPTER 3

FINANCIAL REPORTING STANDARDS

Elaine Henry, CFA

Jan Hendrik van Greuning, CFA

Thomas R. Robinson, CFA

LEARNING OUTCOMES

After completing this chapter, you will be able to do the following:

• describe the objective of financial statements and the importance of financial reporting standards in security analysis and valuation;
• describe roles and desirable attributes of financial reporting standard-setting bodies and regulatory authorities in establishing and enforcing reporting standards, and describe the role of the International Organization of Securities Commissions;
• describe the status of global convergence of accounting standards and ongoing barriers to developing one universally accepted set of financial reporting standards;
• describe the International Accounting Standards Board's conceptual framework, including the objective and qualitative characteristics of financial statements, required reporting elements, and constraints and assumptions in preparing financial statements;
• describe general requirements for financial statements under International Financial Reporting Standards (IFRS);
• compare key concepts of financial reporting standards under IFRS and US generally accepted accounting principles (US GAAP) reporting systems;
• identify characteristics of a coherent financial reporting framework and the barriers to creating such a framework;
• describe implications for financial analysis of differing financial reporting systems and the importance of monitoring developments ...