Essays on International Accounting Essay

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International AccountingPart AGlobal Financial Crisis is considered by various experts as the most terrible financial crisis after the Great Depression of the 1930s. Due to it a risk of total collapse from huge financial institutions took place. It even resulted in the fall of global stock markets. In a lot of regions, the housing market also was at risk, due to which evictions, foreclosures and many remained unemployment. Because of this numerous key businesses failed consumers no longer had buying power and this resulted in the 2008–2012 global recession (Bengtsson 2011). The Global Financial Crisis changed a lot of accounting standards by setting international economic policy designing a schedule.

Throughout the global financial and economic chaos in about 2001, accounting standards were also carefully evaluated. Whereas a lot had been implemented in the interim to help with the weak areas regarding governance and to adjust to the momentum of globalization, by making sure that the International Accounting Standards (IAS) were according to global or near-global acceptance, various important IFRS are still unchanged, particularly those which are related to financial instruments like IAS 39 Financial Instruments: Recognition and Measurement The downfall of the market ultimately led to global financial crisis, the International Accounting Standards Board has been enthusiastically responding to the crisis, they have started number problems which identified via the Financial Stability Board (FSB. IASB as part of its response to the GFCThe IASB as part of its response to the GFC implemented various strategies to address recommendations made by the G20 as they had taken assistance from the G-20 to resolve the ongoing issues (Patricia 2009). Consolidation and Improved Accounting For Off Balance Sheet ItemsThe IASB’ recommended a detailed evaluation of the balance sheets and its items so that the GFC could be controlled To the response it also recommended special structures be utilized by reporting entities, especially by financial institutions like banks, to deal with securitizations and other more difficult financial measures were highlighted via the FSF and the G20.

However, this response was criticized by financial experts who highlighted the fact that financial statements do not communicate the extent to which reporting entities may face danger from the before mentioned types of structures (Bengtsson 2011). Derecognition Another response to the GFC was that off balance sheet items, regarding the derecognition of financial assets and liabilities, are made compulsory to be published at the end of the first quarter. Financial Instruments. Improving Financial Instruments The exposure draft recommended modifications in the disclosure requirements which comprised of a three level fair value hierarchy.

The suggested changes needed disclosures regarding the level of the fair value hierarchy by this the fair value measurements were classified in their entirety, the fair value measurements due to which the utilization of important unobservable inputs to assessment methods and the movements among diverse levels of the above mentioned hierarchy (Alnoor 2008).

The improvement in the measurements also helped to simplify the definition of liquidity risk, enhance quantitative disclosures regarding liquidity risk, and the association among qualitative and quantitative disclosures regarding liquidity risk.

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