International Financial Statement Analysis, 2nd Edition

CHAPTER 3

FINANCIAL REPORTING STANDARDS

Elaine Henry, CFA

Coral Gables, FL, U.S.A.

Jan Hendrik van Greuning, CFA

Reston, VA, U.S.A.

Thomas R. Robinson, CFA

Charlottesville, VA, U.S.A.

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 the 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 IFRS.
• Compare key concepts of financial reporting standards under IFRS and U.S. GAAP reporting systems.
• Identify the characteristics of a coherent financial reporting framework and the barriers to creating such a framework.
• Explain the implications for financial analysis of differing financial reporting systems and the importance of monitoring developments in ...