International Financial Statement Analysis

CHAPTER 3

FINANCIAL REPORTING STANDARDS

Thomas R. Robinson, CFA CFA Institute Charlottesville, Virginia

 

Hennie van Greuning, CFA World Bank Washington, DC

 

Elaine Henry, CFA University of Miami Miami, Florida

 

Michael A. Broihahn, CFA Barry University Miami, Florida

LEARNING OUTCOMES

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

• Explain the objective of financial statements and the importance of reporting standards in security analysis and valuation.

• Explain the role of financial reporting standard-setting bodies (including the International Accounting Standards Board and the U.S. Financial Accounting Standards Board) and regulatory authorities such as the International Organization of Securities Commissions, the U.K. Financial Services Authority, and the U.S. Securities and Exchange Commission in establishing and enforcing reporting standards.

• Discuss the status of global convergence of accounting standards and the ongoing barriers to developing one universally accepted set of financial reporting standards.

• Describe the International Financial Reporting Standards (IFRS) framework, including the objective of financial statements, their qualitative characteristics, required reporting elements, and the constraints and assumptions in preparing financial statements.

• Explain the general requirements for financial statements.

• Compare and contrast the key concepts of financial reporting standards under IFRS and alternative reporting systems, and discuss ...