International Financial Reporting Standards have been one of the main focuses of the SEC for the past few years. Because these standards are being adopted all around the world, the United States has a hard decision to make, how and when will we they be implemented? Although accepting these standards will force the U.S. to change its accounting practices, it will create a single set of accounting standards for the world, thus making it easier to conduct business globally.

Introduction

In the past 10 years, the U.S. market has changed dramatically along with the rest of the world. Governmental agencies have discovered new ways to make global companies more efficient in reporting financial statements that are relevant to everyone in that industry. Since 2001, the Securities and Exchange Commission (SEC) has been promoting the adoption of International Financial Reporting Standards (IFRS) in the United States. As of today, countries including Australia, Canada, Russia, and the European Union nations have begun to or have already implemented IFRS into their accounting practices. Other countries such as Canada, India and Korea have announced they will employ IFRS by 2011 (Bradford). Where then does the U.S. fit in?

The SEC issued a proposed roadmap for the potential use of IFRS for U.S. users (Commission). Public companies are being pushed to make the change from U.S. Generally Accepted Accounting Principles (GAAP) to IFRS by 2014. With the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) promoting the transition, more and more public companies are moving towards complete IFRS compliance. However, implementing IFRS raises a lot of questions in regards to current GAAP standards.

Convergence

The U.S. has followed GAAP for many years and the convergence to IFRS, or iGAAP, may or may not improve the financials of a company depending on their line of business. Some of the major differences between GAAP and iGAAP include the basis of rules and principles respectively. GAAP is rules based where iGAAP is more principles based. There is also limited guidance in respect to interpretative and industry guidance following iGAAP compared to GAAP (Galbraith).

The question stands then, is IFRS a conversion process or a newly created system? The fact is that it is a little of both. There are many differences ranging from the definition of cash and cash equivalents to current liabilities and contingencies and so on and so forth. For example, in regards to inventory valuation, both GAAP and iGAAP accept the first in, first out (FIFO) method of cost flow assumption. However, iGAAP forbids the use of last in, first out (LIFO) while GAAP allows it. Because GAAP allows both methods, U.S. companies are already familiar with their concepts. This may prove to ease the transition to IFRS for those companies using the LIFO method.

Although GAAP and iGAAP share similar characteristics, complying with some rules may force a company to re-evaluate its financial statements completely. And again, this can benefit or hinder a company. A new iGAAP principle involves asset valuation. GAAP records assets at historical cost and continues to record that amount throughout the asset’s existence, adjusting only for impairment. This does not take into consideration the increase in the fair market value that may occur during the assets life. iGAAP allows assets to be adjusted to fair market value. If a company bought land 10 years ago for $10,000 dollars and it is worth $100,000 today, companies will be able to write the asset up to market, thus increasing their asset and equity accounts.

Some concepts will be easier for U.S. based companies to merge into but if everyone is operating with the same standards, it should make accounting easier to interpret on a global basis.

Education

With all the different principles that IFRS will implement, should CPAs and MBAs be worried about their jobs? GAAP has been the main focus for so long and many professional accountants will most likely need to be educated on the new standards. Also, universities are beginning to discuss the changes that will take place in the future but not all of them have a curriculum that includes an IFRS based class. With 2014 approaching, how should schools react? A survey from KPMG found that “Given the dynamics of the current regulatory environment, 79 percent of faculty believe that U.S. GAAP should continue to be taught over the next three to five years, while progressively incorporating more IFRS concepts via a compare-and-contrast approach as the conversion date approaches” (WebCPA).

Before we educate students, professionals and their companies will need to focus on what IFRS is exactly. Questions that should be answered include: does it apply to us? Who do we report to? What does it mean for our business? After answering these questions companies can shift their focus to the workforce and students so that when new employees enter the environment, they are familiar with the emerging concepts that will affect the organization.

GAAP Existence

Since a lot of International Financial Reporting Standards are similar to U.S. GAAP, we will probably not see an end to the FASB and GAAP. Also, IFRS may only be required for companies that do business internationally. Therefore, U.S. corporations and small businesses that are only national firms may still use GAAP to prepare their financial statements. On the other hand, it could be argued that it is less efficient and less useful for investors to have numerous methods of accounting. So we could see an end to GAAP in the interest of streamlining our systems of financial reporting.  According to Kathleen Casey, one of five commissioners for the SEC, “The commission and the FASB (Financial Accounting Standards Board) would be remiss and fail the needs of investors if we do not continue to support the development of a single set of high quality global accounting standards.” (Chasan). In other words, if we continue to support GAAP while trying to implement IFRS, investors will have a difficult time deciding which companies are worth their time and money to invest in because information between different companies will not be comparable.

Conclusion

The most important question right at the moment is figuring out whether IFRS can even be successfully implemented in the timeframe that has been discussed.  2014 may be a bit ambitious for a total change in the way multinational corporations report their financial statements considering the economic climate we are in right now.  There are still many unknowns in regards to which companies will survive this long recession and how these standards may affect their ability to maintain a going concern. Current and future professionals would be well advised to be as adaptable and flexible as they can while maintaining their current skills and keeping up with the latest rules, guidelines, and bulletins that come from every relevant accounting standard setting body. IFRS is another attribute of globalization and there doesn’t appear to be any slowing down of this phenomenon, which leads me to believe that IFRS convergence may or may not happen in five years but it most definitely will happen in some form within the coming decades.

When considering convergence techniques, educating your work force and the existence of standards that have led the way of business for more than half a century, it is hard to imagine a perfect adoption from GAAP to IFRS in the U.S. In order for IFRS to be successfully implemented in the United States, I believe companies will have to be open to its ideas and its principles it has to offer. Having IFRS will not only make global business easier, but it will allow investors to make more sound business decisions.

Bibliography

Bradford, Tiffany. Suite101.com. September 2007. November 2009 .

Chasan, Emily. Reuters. November 2009. November 2009 .

Commission, Securities and Exchange. SEC.GOV. 2008. November 2009 .

Galbraith, Clyde. “Convergence.” 2009.

WebCPA. Accounting Professors Urge IFRS Education. September 2009. November 2009 .

Article Source

Importing from China, an Overview

By: Aaron Xu

January 22, 2009

Searching and Qualifying the Right Suppliers:

Gather a list of contact information from the internet through business forums, networking websites or search with well thought out keywords.  Once you have established communication with them, your next step is qualifying suitable suppliers.  To help you make an informed judgment, ask the following questions: what companies have they worked with, do they manufacture products for export, have they attended any trade shows or exhibitions, what’s the number of years they have been in this business, etc.  Depending on their answer, you’ll have a much better idea about this company’s reputation, their geographical location and specializations.  This information is crucial in helping you identify the most capable and reliable manufacturer.

Initial Quotation:

The most important question you must ask them is, do they understand all the requirements and does the quotation reflect that knowledge.  Obtaining quotations from more than three suppliers will give you an accurate benchmark for a better comparison.  It is not uncommon for manufacturers to offer you a below market price and then raise the price afterwards.  So please be certain that the quotation is accurate and with a longer valid date.

Sample Production:

Sample production is a must if you are sourcing a more sophisticated product.  On average, sample production could take up to five to ten test runs until the factory reaches an acceptable quality.  Or if you want to cut corners, you could send samples of your finish product for them to use as a reference.

Time for Production:

Now you are ready for mass production.  In terms of payment, it is not uncommon for manufacturers to request a 30% down payment, to cover the costs of raw material.  The reminder 70% will be made out when products are ready for shipment.  Of course, these terms and conditions vary by company and it is open for negotiation.

Shipping:

Before the finish products are loaded into the container, you should double check that all the goods are compliant to the regulatory requirements of your country.  Products that violate any regulation may be confiscated at the boarder and could lead to future lawsuits.  Don’t take your suppliers word for import compliance, because they are not legally bond; it is your responsibility.

Almost There:

When your shipment is well on its way, you may want to track the progress of transport and customs clearance status regularly with your freight forwarder once the container enters port.  You may be asked to provide additional production information and you endorsing the bill of lading from the customs.  You’ll also need to issue a power of attorney to your broker and purchase customs bond for your products.

An Important Note:

Importing from China is not an easy job.  It is very complicated and involves numerous, highly detailed-oriented tasks.  It requires strong communication and earnest co-operation from all participating parties.  Most importantly, execution is the key.  If any part of this delicate process is interrupted, it will cause a chain reaction that will severely damage your schedule of delivery.  Sourcing from China should be dealt with knowledge, experience and caution.  A feasible alternative would be to work with a company that acts on your behalf, and see you as their top priority.

We would be happy to provide you with information and solutions that would help you explore or improve your China sourcing projects.  Please visit us at http://www.csandcm.com/ for more detailed information.

Article Source

Electronics have always been at the top of the lists since its reaching. Large flat panel bright LCD display, stunning and fascinating electronics widget, exceedingly iphones and often are being dealt in bulk measure. Digital cameras, camcorders,computers, game consoles and GPS devices are getting great sales too. Electronic items are considered as best and well-nigh lucrative in dropship business concern. This is due to the fact that individuals make buys of electronic items to a greater extent frequently and more probably.

A huge vantage of dropship business is that you do not require to set all of these electronics in your warehouse; neither are you wanted to create early purchases from in large quantities providers in order to admit it to retailers. All you have to make is to setup a platform, where clients and end users will arrive and order their wanted merchandise. Then you have to pass this order with loading particulars to the dropship in large quantities supplier. Dropship in large quantities provider, in turn, ships the merchandise at the preferred goal.

LCD screens and video game consoles:

LCD screens and video game consoles from several makes are nearly general traded out in Christmas as well as ordinary season. The cause for advanced up sale of these items in Christmas is that masses want to present such wares to their favorite ones and friends.

There are numerous world wide web companies working as dropship wholesale provider. You can hunt eBay for that. EBay is considered among the leading and upper most world wide web stocks offering huge measure of wares.

Clothing:

Clothing is also seen as a really key and extremely selling product in all times of year. Designer clothes are of even to a greater extent circumstance as gift particulars. Supplements such as shoes, bags, jewelry, jackets, sweater and other related stuff are also very inn for the Christmas time of year.

Dropship in large quantities suppliers are careful of the fact that clients love bargains and several cases of appealing deals. Wider rebates are too ready at several dropship stores. Various schemes and sales get the deal even to a greater extent interesting and catchy. About dropship companies offer rare discount on endow particulars. Therefore you can opt in this family to deliver broad and get broad.

Conclusion:

Ultimately, it can be stated that there are a plenty of products to present your household and friends at huge tolls. Dropship in Christmas has yet safe and provides several really nice wares at inexpensive and low-cost values.

cici wang used to be a girl working in a computer company as an engineer. In her 20, she began to be involved in business area and study how to be a great businessman by herself. Now she is addicted to China dropship business.
Article Source