Application of discount rate in finance and accounting is founded on the concept of time value of money. Discounted cash flow model is widely used for asset valuation under the International Financial Reporting Standards (in abbreviation, IFRS). The discount rate applied in valuation models normally is the best rate of return that investors would earn alternative investments. With emergence of ecological economics as a separate branch of economics, the concept of ecological (or in other words, environmental discount rate) has been elaborated. Muller (2013) in his paper ‘The Discounting Confusion: an Ecological Economics Perspective’, argues that traditional discounting can undermine long-term sustainability of the economy. In his work, Frank G. Muller considered adjusting the traditional discount rate in order to arrive at an environmental discount rate, which would help to ensure the sustainability of the economy. Hannon (2001) and Perrings (2001) in their paper ‘An Introduction to Spatial Discounting’ consider another variation of the discount rate - spatial discount rate. Spatial discount rate represents the rate at which the diffusion of environmental effects of economic activities is discounted over space. By February 2016, neither the application of environmental nor spatial discount rates under IFRS has been considered. The purpose of this paper is to analyse the implications that environmental and spatial discounting would have for the application of discounted cash flow model according to IFRS. The research methods applied are methods of economic analysis and synthesis.
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The Canadian transition to IFRS provides a valuable IFRS learning opportunity. The Canadian transition and implementation of IFRS provides a unique opportunity to examine the conversion of financial reporting from a similar set of financial reporting rules as U.S. GAAP in a similar economic and business environment. The implementation and adoption of IFRS is not a monolithic event. Our ability to comprehensively understand and assess IFRS requires transparent disclosures such as those mandated by IFRS 1 and disaggregation of the equity components to observe and measure the impact of IFRS as it pertains to discretionary management implementation choices, material reclassifications, and GAAP-to-GAAP differences. Comprehensive knowledge of IFRS 1, First Time Adoption of International Financial Reporting Standards is crucial to our ability to assess the transitory and future impact of IFRS. IFRS 1 sets the precedent for financial reporting under IFRS, overrides transitional provisions included in other IFRS, and prescribes detailed disclosures. This detailed “rules-based” standard permits discretionary management policy choices which have material impact on transitory reporting as well as future financial results.
Small and medium-sized entities represent a special group of entities in the economy of a country in terms of organization and structure of financial reporting primarily for external users. The publication of the International Financial Reporting Standards for Small and Medium-sized Entities reveals that the International Financial Reporting Standards are not aligned with the capabilities of small and medium-sized entities, and that they are the basis of the second level of financial reporting. The main task and the goal of IFRS for the SMEs is to simplify the existing accounting regulations for this segment of the company. They have identified the specific needs of the financial reporting of small and medium-sized entities and specific information requirements of this part of the economy. Ease of application through a simpler option valuation and disclosure decreased, reducing the cost of preparing the report, as well as continuity, represent some of the advantages of the new standard.
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Europe. Accounting & Management Information Systems, 14 (2), 247-274.
Albu, C. N., Albu, N., and Alexander, D., 2014. When Global Accounting Standards Meet the Local Context: Insights from an Emerging Economy. Critical Perspectives on Accounting, 25 (6), 489-510. doi: http://dx.doi.org/10.1016/j.cpa.2013.03.005
Albu, N., and Albu, C. N., 2012. InternationalFinancialReportingStandards in an Emerging Economy: Lessons from Romania. Australian Accounting Review, 22 (4), 341-352. doi: http://dx.doi.org/10.1111/j.1835-2561.2012.00196.x
Albu, N., and
Academia in Central and Eastern Europe. Accounting & Management Information Systems, 14(2), 247-274.
Albu, C. N., Albu, N., and Alexander, D., 2014. When Global Accounting Standards Meet the Local Context: Insights from an Emerging Economy. Critical Perspectives on Accounting, 25(6), 489-510. doi: http://dx.doi.org/10.1016/j.cpa.2013.03.005
Albu, N., and Albu, C. N., 2012. InternationalFinancialReportingStandards in an Emerging Economy: Lessons from Romania. Australian Accounting Review, 22(4), 341-352. doi: http://dx.doi.org/10
Dorel Mates, Adriana Puscas, Antonela Ursachi and Eduard Ajtay
Accounting and taxation in Romania at the beginning of the third millennium are in continuous development, as a result of globalization of the world economy and of connecting the accounting and tax system to the international and European one.
The confluence of the two representative cultures – Anglo-Saxon and Latin-European – has left a strong mark on the Romanian accounting and taxation.
The International Financial Reporting Standards (IFRS) and the European Directives set the line to follow for both the Romanian accounting and the Romanian taxation. We get to ask whether Romania has still got its own strategies of economic, social and cultural development or we are part of a system of strategies where accounting is also included?
This paper documents a case study of true and fair view override in financial reporting by a multinational firm subject to International Financial Reporting Standards (IFRSs). The 2009 Interim Report of HSBC Holdings plc states that HSBC departed from the requirements of IAS 32 Financial Instruments: Presentation (IAS 32). Notwithstanding its noncompliance with the IFRSs, HSBC (2009) concluded that “the interim consolidated financial statements prepared on this basis presented fairly, and gave a true and fair view of the Group’s financial position, financial performance and cash flows” (p. 2). The purpose of this paper is to evaluate critically the accounting treatment in light of the relevant requirements of the IFRSs and the implications for professional accounting standards arising from this departure.