I will pay 100.00 for the following two part assignment. 1. Journal: 200 words no citation required. 2. Case Study Review. Please following Instructions below. Article has been attached. Unit VII Jo

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I will pay 100.00 for the following two part assignment. 1. Journal: 200 words no citation required.  2. Case Study Review.  Please following Instructions below. Article has been attached.

Unit VII Journal

If you were the CFO for a $10 billion-a-year international company headquartered in Ireland, which accounting rules would you recommend your company to follow: U.S. GAAP or IFRS? Are these rules comparable? What are the major differences between the two accounting standards? What was your rationale for choosing a rule?

Your journal entry must be at least 200 words. No references or citations are necessary.

Unit VII Case Study

To read the case study below, you must first log into the myCSU Student Portal and access the Business Source Complete database found in the CSU Online Library.

Read the case study indicated below, and answer the following questions:

Marianne, J. L. (2010).

Accounting for business combinations and the convergence of International Financial Reporting Standards with U.S. Generally Accepted Accounting Principles: A case study

. Journal of the International Academy for Case Studies, 16(1), 95-108.

  1. What key financial ratios will be affected by the adoption of FAS 141R and FAS 160? What will be the likely effect?
  2. Could any of the recent and forthcoming changes affect the company’s acquisition strategies and potentially its growth?
  3. What were FASB’s primary reasons for issuing FAS 141R and FAS 160?
  4. What are qualifying SPEs? Do they exist under IFRS? What is the effect of FAS 166 eliminating the concept of qualifying SPEs on the convergence of accounting standards?
  5. If the company adopts IFRS, what changes should management be aware of?
  6. What are the principle differences between IFRS and U.S. GAAP?

Your submission should be a minimum of three pages in length in APA style; however, a title page, a running head, and an abstract are not required. Be sure to cite and reference all quoted or paraphrased material appropriately in APA style.

I will pay 100.00 for the following two part assignment. 1. Journal: 200 words no citation required. 2. Case Study Review. Please following Instructions below. Article has been attached. Unit VII Jo
Marianne L. James Dec. 15, 2010 Journal of the International Academy for Case Studies (Vol. 16, Issue 2.) Jordan Whitney Enterprises, Inc. Case study 3,214 words 1270LFull Text: CASE DESCRIPTIONThe primary subject matter of this case concerns changes in accounting for business combinations and the convergence ofInternational Financial Reporting Standards (IFRS) with U.S. Generally Accepted Accounting Principles (GAAP). The case focuseson the effect of the changes on financial statements of global entities, as well as strategic decisions made by company executives.Secondary, continuing significant differences between U.S. GAAP and IFRS and future potential developments in accountingforconsolidated multinational entities are explored. This case has a difficulty level of three to four and can be taught in about 50 minutes.Approximately three hours of outside preparation is necessary to fully address the issues and concepts. This case can be utilized inan Advanced Accounting course, either on the graduate or undergraduate level to help students understand changes in anddifferences between U.S. GAAP and IFRS. Two sets of questions address U.S. GAAP and IFRS and include researchable questionsthat are especially useful for a graduate level course. The case has analytical, critical thinking, conceptual, and research components.Utilizing this case can enhance students’ oral and written communication skills.CASE SYNOPSISFinancial reporting in the U.S. is changing dramatically. Consistent with the Securities and Exchange Commission’s proposed”Roadmap” (SEC, 2008), the U.S. likely will join the more than 100 nations worldwide that currently utilize International FinancialReporting Standards (IFRS), and require the use of IFRS in the U.S.Because of the globally widespread use of IFRS, multinational entities with subsidiaries that prepare IFRS-based financial statementsalready have to be knowledgeable about IFRS as well as the current differences between U.S. GAAP and IFRS. Fortunately, theFinancial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are working together tobring about convergence between the two sets of accounting standards.Recently, FASB and the IASB issued new and revised several existing standards that eliminate many differences between U.S.GAAP and IFRS with respect to business combinations and consolidated financial statements. However, some significant differencespersist. Until the SEC makes a final decision regarding the mandatory use of IFRS, and during the proposed multi-year transitionperiod, current and future accounting professionals must continue to keep abreast of changes in U.S. GAAP, be knowledgeableabout differences between U.S. GAAP and IFRS, and, at the same time, prepare for the likely transition to IFRS. In addition,company executives should be cognizant of developments that may affect their strategic decisions as the U.S. moves toward a likelyadoption of IFRS during the next five years.This case focuses on the effect of changes in financial reporting for business combinations. Changes as well as continuingdifferences between U.S. GAAP and IFRS are explored. Secondarily, strategic decisions arising from the changes and the likelyfuture adoption of IFRS are addressed. This case, which can be utilized in Advanced Accounting on either the graduate orundergraduate level can enhance students’ analytical, technical, critical thinking, research, and communication skills.INSTRUCTORS’ NOTE Teaching StrategiesAccounting educators play a critical role in preparing current and future accounting professionals for the nearly certain adoption ofIFRS for financial reporting in the U.S. For several years prior to the actual required adoption and during the expected multi-yearimplementation period, accounting professionals must be knowledgeable about U.S. GAAP and IFRS and educators must continue toteach U.S. GAAP, while at the same time progressively implementing IFRS into their curriculum. Given the scarce time available forteaching the many topics associated with financial accounting this is not an easy endeavor and is particularly difficult with respect tocomplex areas of accounting.Accounting for business combinations and consolidated entities represents a complex issue typically taught in an advancedaccounting course. FASB and the IASB recently eliminated many differences in accounting for business combinations; however,some significant differences continue to exist. Effective for the 2009 fiscal period, companies must apply the provisions of one newand one significantly revised accounting standard–FASB Statements FAS 160 and FAS 141R.This teaching case accomplishes several goals. First, fundamental concepts as well as changes brought about by FAS 160 and FAS141R are identified and contrasted with the prior rules. Second, significant differences between U.S. GAAP and IFRS are identified.Third, the effects of the changes to U.S. GAAP and the effect of the likely adoption of IFRS are explored. The case focuses on thefinancial statement effect as well as business and strategic considerations and challenges that may arise from the changes in U.S.GAAP and the likely adoption of IFRS. Fourth, the case provides a brief overview of expected future changes and developments inthe area of business combinations.Two independent sets of questions–one focusing on changes in U.S. GAAP, and one focusing on the effect of the adoption of IFRS–provide flexibility. Both sets include some researchable questions that are particular useful for graduate level courses. The questionsare independent, providing instructors with significant choice and flexibility to match assignments with the needs of their class.In-class discussions regarding issues that may arise prior to and during the convergence to IFRS and strategic decisions arising fromthese issues should be encouraged. The case can be solved in groups during class time, or assigned as an individual or groupproject. Students should review the case prior to discussion in class. Approximately three hours of outside preparation is needed ifthe case is utilized as an assignment. Detailed in class discussion will require about 50 minutes. Students should be encouraged tofocus not only on the financial statement effects, but also on the long-term strategic consequences for global entities.SUGGESTED ANSWERS TO QUESTIONSU.S. GAAP Questions:1. How will adoption of the new accounting standards (FAS 141R and FAS 160) affect Klugen Corporation’s financial statements inthe forthcoming reporting period?In the forthcoming balance sheet, non-controlling interest will be reclassified as equity. This will result in an increase in stockholders’equity. In the forthcoming income statement, income attributable to non-controlling shareholders is no longer classified as “otherrevenue, expenses, gains and losses,” instead, non-controlling share of income will be deducted from consolidated income to deriveincome attributable to controlling shareholders.2. Utilizing the 2008 numbers, prepare (1) a partial income statement starting at income from operations and (2) the equity section ofthe balance sheet consistent with the requirements of FAS 141R and FAS 160 (FASB Accounting Standards Codification sections805 and 810).3. How will adoption of FAS 141R and FAS 160 affect Klugen Corporation’s financial statements in the long-run?In addition to the changes mentioned in Question 1 above, any subsequent acquisitions will be valued at fair market value. Thismeans that even if Klugen acquires less than 100% of a company, all assets and liabilities will be revalued to total fair market value.In addition, any goodwill and non-controlling interest will be carried at fair market value. This likely will increase total assets and totalstockholders’ equity. In addition, if depreciable or amortizable assets are revalued to a higher market value, subsequent depreciationand amortization will increase and thus decrease income. Furthermore, Klugen will have to expense the direct as well as the indirectcosts of future business combinations. This likely will decrease income during the year of acquisition. In addition, in-process researchand development acquired as part of a new business combination can no longer be expensed, but instead, has to be capitalized asintangible asset. This will increase assets and income during the year of acquisition, and increase amortization and decrease incomein subsequent years.4. What key financial ratios will be affected by the adoption of FAS 141R and FAS 160? What will be the likely effect?Adoption of FAS 141R and FAS 160 likely will decrease the company’s debt to equity and debt to asset ratios. This occurs becauseequity increases through the reclassification of the non-controlling interest. For subsequent acquisitions, the likely increase in assetsand equity due to the revaluation to higher market values will further decrease these ratios.5. What additional estimates have to be made consistent with the new accounting standards?  Klugen holds investments in several non-consolidated entities. If at a future date, the company acquires sufficient additional shares togive it control over these entities (i.e., an acquisition in stages), the net assets associated with previously acquired equity will have tobe revalued. This will require significant estimates.6. Could any of the recent and forthcoming changes affect the company’s acquisition strategies and potentially its growth?Future acquisitions will have to be valued at full market value. This will increase goodwill, non-controlling interest, and, if assets areundervalued, increase assets. If assets are overvalued, assets will decrease by the full amount. Significant costs typically areassociated with acquisitions. These will have to be expensed as incurred, decreasing income. If an entity is trying to meet earningstargets, this could affect the acquisition decision. 7. What were FASB’s primary reasons for issuing FAS 141R and FAS 160? (Research question)As expressed in FAS 141R and FAS 160, FASB issued the standards to improve the relevance, reliability, and comparability offinancial statements. In addition, FAS 141R and FAS 160, as well as the revisions to IFRS 3 were part of the FASB/IASB jointprojects to facilitate convergence in this area of accounting (FASB, 2007).8. What are qualifying SPE’s? Do they exist under IFRS? What is the effect of FAS 166 eliminating the concept of qualifying SPEs onthe convergence of accounting standards?According to the FASB Codification, qualifying SPE’s are trusts or other legal entities that meet the conditions set forth in FAS 140(FASB, 2009, www.fasb.org). These entities typically involve securitization of mortgages. IASB does not recognize the concept ofqualifying SPEs. Thus, the elimination of qualifying SPEs by FAS 166 facilitates convergence in this area of accounting.9. FASB and IASB recently issued an updated Memorandum of Understanding. Retrieve the updated memorandum and identifyseveral issues that the two standard setting boards are jointly focusing on to facilitate convergence. (Research question)The areas listed in the Memorandum of Understanding are: leases, financial statement presentation, revenue recognition, fair valuemeasurement, financial instruments, liabilities, and the conceptual framework (Completing the 2006 Memorandum of Understanding:A progress report and time table for completion, Sept. 2008, www.iasb.org).IFRS Questions:1. From the consolidation perspective, what would be the likely overall effect of adopting IFRS on the company’s financialstatements?The new and revised standards issued by FASB and IASB as part of their joint project eliminated many differences. However, somedifferences persist and would affect Kugen’s financial statements upon adoption of IFRS. Specifically, IASB allows a choice in valuingnon-controlling interest at fair value either (a) including a share of goodwill, or (b) excluding goodwill. This will affect total assets andequity of the consolidated entity. In addition, since exercisable shares are included under IFRS in determining control, a currentlyunconsolidated entity could be subject to consolidation under IFRS. Contingent assets acquired in an acquisition are not recognizedunder IFRS but may be recognized under current U.S. GAAP. This difference could increase assets. 2. What potential effect would arise if Klugen were to select the option under IFRS 3 to value non-controlling interest at theproportionate share of its subsidiaries’ net identifiable assets?If Klugen adopts IFRS and chooses to value non-controlling interest at the proportionate share of its subsidiaries’ identifiable assets,the amount of goodwill recognized would be lower, and so would be the valuation of non-controlling interest. This would decreasetotal assets and equity under IFRS compared to current U.S. GAAP.3. Do you believe that an impairment of goodwill would be more likely under IFRS or under U.S. GAAP? Why, or why not?Impairment of goodwill would be more likely, and–if it occurs–higher under IFRS than under U.S. GAAP. This is the case because ofthe difference between U.S. GAAP in identifying and measuring impairment. The two-step approach under U.S. GAAP makes it lesslikely that an impairment will occur than the one-step approach under IFRS. In addition, under IFRS, the cash-generating unit isassessed for potential impairment, while under U.S. GAAP, the reporting unit is assessed. Cash-generating units (the smallest unitthat has independent cash flows) are typically smaller than reporting units. Under U.S. GAAP, impairment of one cash generatingunits within a reporting units may be offset by higher market values of another cash-generating unit. Thus, impairment is more likelyunder IFRS than under U.S. GAAP.4. What challenges would arise for the accounting staff if the company adopts IFRS? Do you believe that he company is makingprogress toward meeting some of these challenges?The main challenges would arise from (1) the need to train the accounting staff, (2) converting the accounting information system,and (3) maintaining a dual system of information. With respect to training, Irma and her staff appear to be making significant progressby implementing periodic training sessions. With respect to the IT system, more information would be necessary. Based on theproactive attitude of the CFO, one may reasonably assume progress in that area as well. Maintaining a dual system for the few yearsafter and during the transition period will be costly and require additional accounting staff resources.5. What opportunities would arise for the accounting staff if the company adopts IFRS?Adoption of IFRS and advance training will create significant professional opportunities for the accounting staff. Knowledge of bothU.S. GAAP and IFRS will provide many opportunities for accounting staff in the U.S. and abroad; professionals with knowledge ofboth accounting standards will be in high demand for many years, as U.S. companies prepare for the adoption of IFRS. Accountantswho are knowledgeable regarding IFRS will have globally marketable knowledge.6. What other (non-staff related) factors should Klugen Corporation consider prior to adopting IFRS? Differentiate betweenadvantages and disadvantages.In addition to staff related issues and training, Klugen Corporation may want to consider investor education, total short-term and long-term costs, future acquisitions, and access to global capital markets. Investor education will be important, particularly if the companyadopts at the earliest possible point in time. Klugen will also have to consider the short-term and long-term costs of implementingIFRS. In the short-run, costs will be higher; however, in the long-run, the costs of issuing consolidated financial statements likely willbe lower because the company will not have to consolidate financial statements that are based on different accounting rules. Inaddition, the company likely will enjoy easier and perhaps less costly access to global financial markets.7. Two of Klugen’s non-consolidated entities regularly grant stock options to its employees. How could this affect Kugen’s accountingfor these entities under IFRS?Under IFRS, exercisable shares are included when determining whether an investor has obtained control, while under U.S. GAAPthese shares are excluded until exercised. The effect on Klugen’s accounting will depend on who holds the options and themagnitude of the options involved. If Klugen holds the options, a previously non-consolidated entity may become subject toconsolidation. On the other hand, if non-parent investors (e.g., employees) hold the options of a currently consolidated entity, thesubsidiary could fall below the consolidation threshold. Thus, in either case, Klugen’s accounting and financial statements couldsignificantly be affected by this difference between U.S. GAAP and IFRS.8. As indicated in the case, Irma previously highlighted some other significant differences between IFRS and U.S. GAAP. Researchthe issue and find three (3) differences (other than those related to business combinations). You may want to consider accounting forinventory, extraordinary items, property, plant and equipment, and research and development.A. Inventory: While U.S. GAAP permits the use of the LIFO inventory cost flow assumption, IFRS specifically prohibits use of LIFO. Inaddition, the lower of cost or market (LOCM) rule is applied differently under IFRS. While under U.S. GAAP, replacement costgenerally defines market value, under IFRS, market value is defined as the inventories’ net realizable value. Furthermore, inventorywrite-downs under the LOCM rule can be reversed under IFRS; this is prohibited under U.S. GAAP.B. Extraordinary items: The classification of extraordinary items, which is a valid income statement classification under U.S. GAAP,does not exist under IFRS.C. Property, plant and equipment: IFRS allows a choice in the valuation of these long-lived assets. Specifically, companies can valueproperty, plant and equipment at current market value, or at cost less accumulated depreciation. Under U.S. GAAP, revaluation tomarket currently is not permitted. Furthermore, impairments of property, plant, and equipment can be reversed under IFRS, but notunder U.S. GAAP. D. Research and development costs: Under both U.S. GAAP and IFRS, internal research cost must be expensed as incurred.However, under IFRS, development costs can be capitalized if specific criteria are met. This is prohibited under U.S. GAAP.(An excellent source of summary information is available from Deloitte; IFRSs and U.S. GAAP A pocket comparison. Available fromhttp://www.iasplus.com/ dttpubs/0809ifrsusgaap.pdf.)9. Assume that the SEC provides a choice in the timing of the adoption of IFRS. What ethical issues could arise for the CFO indeciding whether to adopt IFRS at the earliest possible, or at a later required date? (Research question)The timing of adoption of IFRS may be influenced by a desire to manage earnings. Overall, adoption of IFRS tends to increase netincome, total assets, and total equity. This may be a contributing factor to some company’s adoption decision. Accounting choicesmade in order to manage income is considered earnings managements, which is undesirable.10. Review comment letters received by the SEC regarding its Roadmap. List two concerns mentioned by those offering comments.(Research question)Many comment letters are available on the SEC.gov website. Students can access comments athttp://sec.gov/comments/s7-27-08/s72708.shtml. Some ofthe concerns involve the cost of implementing IFRS (including staff trainingand IT conversion) and the cost of the proposed required U.S. GAAP-IFRS reconciliations. Also, some were concerned about themulti-year implementation periods and the lack of IFRS-guidance in some areas of accounting.REFERENCESDeloitte (2008). IFRSs and U.S. GAAP A pocket comparison. Http://www.iasplus.com/dttpubs/0809ifrsusgaap.pdf.Financial Accounting Standards Board (2009). FASB Accounting Standards Codification. Http://www.fasb.org.Financial Accounting Standards Board (2008) Completing the 2006 Memorandum of Understanding: A progress report and time tablefor completion. Retrieved on April 21, 2009, from http://www.fasb.org.Financial Accounting Standards Board (2009). FASB Statement No. 167. Amendments to FASB Interpretation 46R. Retrieved on July7, 2009, from http://www.fasb.org.Financial Accounting Standards Board (2009). FASB Statement No. 166. Accounting for the Transfer of Financial Assets–anamendment of FASB Statement No. 140. Retrieved on July 7, 2009, from http://www.fasb.org.Financial Accounting Standards Board (2007). FASB Statement No. 160. Non-Controlling Interest in Consolidated FinancialStatement. Retrieved on January 5, 2008, from http://www.fasb.org.Financial Accounting Standards Board (2007). FASB Statement No. 141R. Business Combinations. Retrieved on January 5, 2008,from http://www.fasb.org.International Accounting Standards Board (2008). ED 10 Consolidated Financial Statements. December 2008. Retrieved on March30, 2009, from http://www.iasb.org.International Accounting Standards Board (2008). International Financial Reporting Standard No. 3. Business Combinations. London,England: IASB.International Accounting Standards Board (2008). International Accounting Standard No. 27. Consolidated and Separate FinancialStatements. London, England: IASB.Securities and Exchange Commission. Roadmap for the Potential Use of Financial Statements Prepared in Accordance WithInternational Financial Reporting Standards by U.S. Issuers. Other Release No.: 33-8982, File No. S7-2708, Comments.http://sec.gov/comments/s7-27-08/s72708.shtmlMarianne L. James, California State University, Los AngelesExhibit 1 Partial Income Statement under New Accounting Standards (using 2008 results): Operating Income $ 10,250 OtherIncome (Expense) Interest expense (820) Investment income 405 (415) Income before income tax $ 9,835 Income tax 3,250Consolidated Net Income 6,585 Non-controlling interest in Net income (1,010) Income attributable to Klugen Corp. 5,575Basic Earnings Per Share $2.08 Diluted Earnings Per Share $1.92 Exhibit 2 Partial Balance Sheet under New AccountingStandards (using 2008 results): Stockholders’ Equity Common stock ($1 par, 100,000,000 authorized, 60 60,000,000 issued)Additional paid in capital 13,095 Retained earnings 14,588 Accumulated other comprehensive income (2,044) Non-controllingInterest 5,000 Total Stockholders’ Equity 30,699James, Marianne L. COPYRIGHT 2010 Jordan Whitney Enterprises, Inc.    (MLA 8 th Edition) James, Marianne L. “Accounting for business combinations and the convergence of International Financial Reporting Standards with U.S. generally accepted accounting principles: a case study.(Instructor’s Note).” , vol. 16, no. 2, 2010, p. 93+. , https://link.gale.com/apps/doc/A244159064/ITOF?u=oran95108&sid=ITOF&xid=ef39149c. Accessed 21 Aug. 2019. GALE|A244159064

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