INTERNATIONAL ACCOUNTING HARMONIZATION
A. Harmonization
and standardization of the difference in the Applicable Accounting Standards
§ Harmonization of International Accounting
§ Harmonization of International Accounting
Harmonization is a process
to improve the compatibility (suitability) accounting practices by setting
limits on how large these practices may vary. Harmonization of standards
will be free of conflicts of logic and can improve the comparability
(comparability) of financial information from different countries.
Efforts to harmonize
accounting standards have been started long before the establishment of the
International Accounting Standards Committee in 1973. More recently, a
number of companies seeking to raise capital in markets outside the country of
origin and the investors who seek to diversify their investments internationally
face increasing problems as a result of national differences in terms of
accounting, disclosure, and audit.
Sometimes people use the
term harmonization and standardization as if both have the same meaning. However,
contrary to the harmonization, standardization generally means the
determination of a group of rigid rules and narrow and may even be the
application of a single standard or rule in any situation. Standardization
does not accommodate the differences between countries, and therefore more
difficult to be implemented internationally. Harmonization is much more
flexible and open, do not use one size fits all approach, but to accommodate
some of the differences and have experienced great progress internationally in
recent years.
§ Difference Between Harmonization and Standardization
Harmonization
a. Process to improve the compatibility (kesesuian) accounting practices to determine the limits of how much these practices may vary.
b. Do not use one size fits all approach.
c. But accommodates be some agreement and has experienced great progress internationally in recent years.
d. Hamonisasi much more flexible and open
Standardization
a. Determination of a group of rigid rules and narrow.
b. The application of a single standard or rule in any situation.
c. Standardization does not accommodate the differences between countries.
d. More difficult to implement internationally
§ Difference Between Harmonization and Standardization
Harmonization
a. Process to improve the compatibility (kesesuian) accounting practices to determine the limits of how much these practices may vary.
b. Do not use one size fits all approach.
c. But accommodates be some agreement and has experienced great progress internationally in recent years.
d. Hamonisasi much more flexible and open
Standardization
a. Determination of a group of rigid rules and narrow.
b. The application of a single standard or rule in any situation.
c. Standardization does not accommodate the differences between countries.
d. More difficult to implement internationally
Include the harmonization
of accounting harmonization:
1. Accounting standards (which relates to the measurement and disclosure.
2. Disclosures made by public companies associated with the securities offering and listing on the stock exchange, and
3. Auditing standards
1. Accounting standards (which relates to the measurement and disclosure.
2. Disclosures made by public companies associated with the securities offering and listing on the stock exchange, and
3. Auditing standards
Advantages of
international harmonization:
a) Language
a) Language
Those who use English as
their mother may feel fortunate that English be the language that is widely
used around the world.
b) Harmonization of taxation's social security system
b) Harmonization of taxation's social security system
Profits. Businesses
will have considerable benefits in planning, systems and training costs, and so
of harmonization.
Losses. Taxation and
social security systems have a strong influence on economic efficiency. Different
systems have different effects. The ability to compare how the different
approaches in different countries led to the countries capable of increasing
their respective systems. Countries competing and competition forced them
to adopt an efficient system through the operation of such market power. Approval
of the tax system would be like establishing a cartel and would eliminate the
potential benefits of interstate competition.
A recent paper also
supports the existence of a harmonized global GAAP. The benefits:
1) Into global capital markets and investment capital can move the picture around the world without means. High-quality financial reporting standards that are used consistently throughout the world will improve the efficiency of capital allocation.
2) Investors can make better investment decisions, be more diverse portfolio and reduced financial risk.
3) The companies can improve decision making strategies in the areas of mergers and acquisitions.
4) The best ideas arising from the standards-making activity can be deployed in developing high-quality global standard.
1) Into global capital markets and investment capital can move the picture around the world without means. High-quality financial reporting standards that are used consistently throughout the world will improve the efficiency of capital allocation.
2) Investors can make better investment decisions, be more diverse portfolio and reduced financial risk.
3) The companies can improve decision making strategies in the areas of mergers and acquisitions.
4) The best ideas arising from the standards-making activity can be deployed in developing high-quality global standard.
International criticism of
suggestions:
§ Determination of international standards is a very simple solution for complex problems.
§ Some observers argue that the adoption of international accounting standards is essentially a tactic of the accounting firm that provides accounting services to expand its market internationally.
§ Adoption of international standards will lead to an excessive standard.
A reconciliation of mutual recognition. Two approaches are proposed as a possible solution is used to overcome the problems associated with cross-border financial report:
1. Reconciliation.
2. Mutual recognition (payoff / reciprocity).
§ Determination of international standards is a very simple solution for complex problems.
§ Some observers argue that the adoption of international accounting standards is essentially a tactic of the accounting firm that provides accounting services to expand its market internationally.
§ Adoption of international standards will lead to an excessive standard.
A reconciliation of mutual recognition. Two approaches are proposed as a possible solution is used to overcome the problems associated with cross-border financial report:
1. Reconciliation.
2. Mutual recognition (payoff / reciprocity).
Through reconciliation,
foreign companies can set up LK using home country accounting standards, but
should provide a reconciliation between the accounting measures that are
important in the country of origin and in countries where financial statements
in the report.
Reconciliation lower cost
when compared with the full financial statements based on different accounting
principles. However, only present a summary reconciliation, and not the
whole picture of the company.
Evaluation
Evaluation
The debate over harmonization
may never be fully resolved. Several arguments against harmonizing contain
some truth. However, growing evidence suggests that the goal of
international harmonization of accounting, disclosure, and audit have been
received so extensive that trend leading to the international harmonization
will continue or even sooner.
National debate in the
underlying factors that lead to differences in accounting, disclosure and audit
practices increasingly narrow as the capital and product markets become
increasingly international.
Application of international standards
Application of international standards
International accounting
standards are used as a result of:
a) An international agreement or politically.
b) Compliance is voluntary.
c) The decision by the national accounting standards-making body
a) An international agreement or politically.
b) Compliance is voluntary.
c) The decision by the national accounting standards-making body
The more the number of
companies decided that the best interests of companies to use IFRS, although
not required. Many countries have allowed firms to base their financial
statements in IFRS and some states require.
If the applicable
accounting standards through political procedures, laws or regulations,
generally mandatory rules that drive this process. Interested parties to
determine what the rules are and how these rules should be implemented.
Efforts of other
international standards in accounting is essentially voluntary. Those
standards will be accepted or not depends on the people who use the accounting
standards. Current international standards and national standards are not
the same, do not be a problem, but when these two different standards, national
standards should be the first referral.
§ Overview of Major International Organizations Regarding Promoting the Harmonization of Accounting
§ Overview of Major International Organizations Regarding Promoting the Harmonization of Accounting
Six organizations have
become a major player in the determination of the international accounting standards
and in promoting international harmonization of accounting:
1) The International Accounting Standards Board (IASB).
2) Komini European Union (EU).
3) The International Organization of the Capital Market Commission (IOSCO).
4) The International Federation of Accountants (IFAC).
5) Intergovernmental Working Group of Experts on the United Nations International Standards of Accounting and Reporting, part of the United Nations Conference on trade and development.
6) The working group in cooperation Accounting Standards Organization and Economic Development.
1) The International Accounting Standards Board (IASB).
2) Komini European Union (EU).
3) The International Organization of the Capital Market Commission (IOSCO).
4) The International Federation of Accountants (IFAC).
5) Intergovernmental Working Group of Experts on the United Nations International Standards of Accounting and Reporting, part of the United Nations Conference on trade and development.
6) The working group in cooperation Accounting Standards Organization and Economic Development.
International Forum on
Accountancy Development (IFAD) held its first meeting in 1999.Its main goal is
to build the capacity of accounting and auditing in developing countries.
Also important is the
International Federation of Stock Exchanges (FIBV), a trade organization for
securities and derivatives markets are organized around the world. FIBV encourage
professional development of financial markets business. FIBV goal is to
establish standards for the harmonization of business processes (including
financial reporting and disclosure) in cross-border securities trading,
including cross-border public offerings.
§ International Accounting Standards Board
§ International Accounting Standards Board
IASB objectives are:
a) To develop in the public interest, a set of global accounting standards are of high quality, can be applied to the flow of information requires a high-quality, transparent, and comparable in the financial statements and other financial reporting to help participants in capital markets and other users in making economic decisions.
b) To encourage the use and application of these standards are strict.
c) To bring convergence of national accounting standards and International Accounting Standards and International
a) To develop in the public interest, a set of global accounting standards are of high quality, can be applied to the flow of information requires a high-quality, transparent, and comparable in the financial statements and other financial reporting to help participants in capital markets and other users in making economic decisions.
b) To encourage the use and application of these standards are strict.
c) To bring convergence of national accounting standards and International Accounting Standards and International
Financial Reporting Standards in the direction of
high-quality solutions.
The core standards of IASC and IOSCO Agreement
The core standards of IASC and IOSCO Agreement
IASB has sought to develop
accounting standards that will be received by the securities regulatory bodies around
the world. IASC adopted a work plan to produce a core set of comprehensive
high-quality standards.
The new IASB structure
The new IASB structure
In November 1999 the IASC
Board unanimously approved a resolution supporting the proposed new structure
of the core are:
1. The IASC will be established as an independent organization.
2. The organization will consist of two main bodies, and the House of Representatives, and the Permanent Committee on Interpretation and Standards Advisory Council.
3. Representatives will appoint board members, conduct surveillance and gather the necessary funds, while the council has responsibility for setting accounting standards Restructured IASB met for the first time in April 2001.
1. The IASC will be established as an independent organization.
2. The organization will consist of two main bodies, and the House of Representatives, and the Permanent Committee on Interpretation and Standards Advisory Council.
3. Representatives will appoint board members, conduct surveillance and gather the necessary funds, while the council has responsibility for setting accounting standards Restructured IASB met for the first time in April 2001.
IASB has been reorganized,
will include the following agencies:
1) The Guardian. IASB has 19 carers
§ 6 from North America
§ 6 of the European
§ 4 of the Asia / Pacific
§ 3 from other regions
2) The Board IASB
1) The Guardian. IASB has 19 carers
§ 6 from North America
§ 6 of the European
§ 4 of the Asia / Pacific
§ 3 from other regions
2) The Board IASB
Council to establish and
improve standards of financial accounting and reporting efforts.
§ Council consists of 14 members appointed by the Mayor to provide the best available combination of technical expertise and background of international business experience and relevant market conditions.
3) Standards Advisory Board
§ Council consists of 14 members appointed by the Mayor to provide the best available combination of technical expertise and background of international business experience and relevant market conditions.
3) Standards Advisory Board
Standards Advisory Council
appointed by the representatives, consisting of:
§ 30 or more members who have geographical and professional backgrounds are different, who are appointed to three-year renewable.
4) International Financial Reporting Interpretation Committee (IFRIC)
§ IFRIC comprises 12 members appointed by the trust. IFRIC interpret the application of international accounting standards and international financial reporting standards in the context of the basic framework of the IASB, published a draft interpretation and evaluate the comments above and obtain board approval for the final interpretation.
New Approach to EU and European Financial Integration
§ 30 or more members who have geographical and professional backgrounds are different, who are appointed to three-year renewable.
4) International Financial Reporting Interpretation Committee (IFRIC)
§ IFRIC comprises 12 members appointed by the trust. IFRIC interpret the application of international accounting standards and international financial reporting standards in the context of the basic framework of the IASB, published a draft interpretation and evaluate the comments above and obtain board approval for the final interpretation.
New Approach to EU and European Financial Integration
Commission announced that
the EU needs to move precisely in order to provide a clear signal that
companies are trying to do the recording in the U.S. and other world markets
will still be able to survive in the EU accounting framework. EC also
stressed that the EU strengthens its commitment to the international
standard-setting process, which offers the most efficient and quick solutions
to problems faced by companies operating on an international scale.
In 2000, the EC adopted a new financial reporting strategy. The interesting thing about this strategy is the proposed rule that all EU companies listed in regulated markets, including banks, insurance companies and SME (small and medium sized enterprises), feeding the accounts in accordance with IFRS konsolodation
International Accounting Standards
In 2000, the EC adopted a new financial reporting strategy. The interesting thing about this strategy is the proposed rule that all EU companies listed in regulated markets, including banks, insurance companies and SME (small and medium sized enterprises), feeding the accounts in accordance with IFRS konsolodation
International Accounting Standards
International Financial
Reporting Standards (English: International Financial Reporting Standards
(IFRS) is the standard basis, Understanding and Framework (1989) [1] which was
adapted by the International Accounting Standards Board (English: International
Accounting Standards Board (IASB)).
A number of standards
established as part of IFRS are known by the name of the former International
Accounting Standards (IAS). IAS issued between 1973 and 2001 by the
International Accounting Standards Committee (English: International Accounting
Standards Committee (IASC)). On 1 April 2001, the new IASB took over the
responsibility to draft the International Accounting Standards of the IASC. During
the first meeting, the new agency is adapting IAS and SIC that already exist. IASB
continues to develop standards and naming the new standards as IFRS.
Structure of IFRS
Structure of IFRS
IFRS are considered as a
standard set of "basic principles" which then sets the rules also
dictate the implementation of agency-specific implementation.
International Financial
Report Standards include:
a. Rules of the International Financial Report Standards (English: International Financial Reporting Standards (IFRS))-issued after 2001.
b. Rules of the International Accounting Standards (English: International Accounting Standards (IAS))-issued before 2001.
c. Interpretation derived from the Committee on International Financial Interpretation (English: International Financial Reporting Interpretations Committee (IFRIC))-issued after 2001.
d. Standing Interpretations Committee (SIC)-issued before 2001.
e. Framework for the Preparation and Presentation of Financial Statements (1989) (English: Framework for the Preparation and Presentation of Financial Statements (1989))
a. Rules of the International Financial Report Standards (English: International Financial Reporting Standards (IFRS))-issued after 2001.
b. Rules of the International Accounting Standards (English: International Accounting Standards (IAS))-issued before 2001.
c. Interpretation derived from the Committee on International Financial Interpretation (English: International Financial Reporting Interpretations Committee (IFRIC))-issued after 2001.
d. Standing Interpretations Committee (SIC)-issued before 2001.
e. Framework for the Preparation and Presentation of Financial Statements (1989) (English: Framework for the Preparation and Presentation of Financial Statements (1989))
In making the judgment
described in paragraph 10, management shall refer to, and Consider the
applicability of, the sources in descending order Following:
(A) The requirements and guidance in Standards and Interpretations dealing with similar and related issues; and
(B) The definitions, recognition criteria and measurement concepts for assets, liabilities, income and expenses in the Framework.
(A) The requirements and guidance in Standards and Interpretations dealing with similar and related issues; and
(B) The definitions, recognition criteria and measurement concepts for assets, liabilities, income and expenses in the Framework.
In making a decision as
described in paragraph 10, management shall refer to, and will consider the
possibility of applying, the following sources in descending order according
to:
(A) The requirements and guidance in Standards and Interpretation in dealing with similar and related terms, and
(B) Description, recognition criteria and measurement concepts for assets, liabilities, revenues and expenses in the Framework.
Framework
(A) The requirements and guidance in Standards and Interpretation in dealing with similar and related terms, and
(B) Description, recognition criteria and measurement concepts for assets, liabilities, revenues and expenses in the Framework.
Framework
Framework for Preparation
and Presentation of Financial Statements [2] present the basic principles of
IFRS.
IASB and FASB frameworks are in the process of updating and summarizing. Joint Conceptual Framework Project (English: The Joint Conceptual Framework project) aims to update and tidy up the concepts that already exist to describe the changes in the market, business practices and economic environment that has arisen in the past two decades or so since the concept was first formed.
IASB and FASB frameworks are in the process of updating and summarizing. Joint Conceptual Framework Project (English: The Joint Conceptual Framework project) aims to update and tidy up the concepts that already exist to describe the changes in the market, business practices and economic environment that has arisen in the past two decades or so since the concept was first formed.
The overall objective is
to create a foundation for future accounting standards are principles-based,
internally consistent and internationally accepted. Because of this, the
(council) IASB and the FASB in the United States carry out joint projects.
The role of framework
The role of framework
Deloitte stated:
In the absence of a
Standard or an Interpretation That specifically APPLIES to a transaction,
management must use its judgment in developing an accounting policy and
Applying That results in information That is relevant and reliable. That
in making judgments, 8:11 IAS requires management to Consider the definitions,
recognition criteria, and measurement concepts for assets, liabilities, income,
and expenses in the Framework. This elevation of the importance of the
Framework was added in the 2003 revisions to IAS 8.
Objective of financial statements
Objective of financial statements
A financial report must
describe the true and fair view of the efforts of an organization. Because these reports are
used by various parties, the report should describe the actual view of the
state will finance an organization.
B. Pros
and Cons of International Accounting Standards Harmonization
Until the present time,
western countries are still heavily promoting the need for harmonization of
international accounting standards. The main purpose of these efforts is
to improve the comparability (comparability) of financial reporting, especially
for multinational companies operating in various parts of the world. Not
surprisingly, the western side to form a body called the International
Accounting Standards Committee (IASC), which has now changed its name to
International Accounting Standard Board (IASB). The agency is in charge of
producing international accounting standards (International Financial Reporting
Standards-IFRS).
The main reason the
presentation of financial statements that meet the standards for the survival
of the company itself in the future, both in terms of internal and external
users. Public recognition will comprehensiveness and transparency of
financial statements of a publicly-listed companies increase the pressure of
the business sector to provide financial statements in accordance with the
standards.
Other reasons to make it
easier for investors who want to make their investment activities in other
countries, which requires the financial statements of international standard in
order to know the state of the company.
Although the IASB has no
power to require all countries to prepare financial statements under
International Financial Reporting Standards, to date the agency can be said to
be very influential in the process of harmonization. This is not
surprising because the capitalist countries, especially the United States
played an important role in producing these standards. In other words,
harmonization is the harmonization of international accounting standards are
based on Anglo-Saxon accounting model, without notice and consider the system
of accounting, environmental, economic, social and cultural rights of other
countries (Hoarau 1995). Hoarau further said that the resulting standard
is dominated by the accounting concepts practiced in the USA. In other
words what is now American hegemonic efforts in the preparation of financial
statements by the international accounting standards.
Although the IASB
accounting standards resulting discuss the guidelines are less detailed and
limited scope when compared with the USA version of the accounting standard
(Statement of Financial Accounting Standards), IFRS remains based on the
concept and the same accounting approach. As a result, the possibility of
much conflict with the IFRS financial reporting purposes and the social
environment, economy and culture of other countries, especially those that have
different characteristics with the capitalist state. More specifically,
the standards produced a lot of conflict with Islamic values. This is due
to the economic concepts underlying the capitalist Western world accounting
standard setting is much different from the concept of Islamic economics.
The resulting accounting
standards of Anglo-Saxon model of accounting that recognizes adopts the time
value of money, which produces the concept of interest. Meanwhile, Islam
explicitly reject the use of the time value of money in carrying out economic
activities. This is because the concept is synonymous with usury, and
usury is clearly prohibited in Islam. Riba is prohibited in Islam because
it shows the injustice of usury. Capra (1994) mentions that the injustice
arises because the distribution of profits based on a fixed amount, can damage
the price mechanism and led to the allocation of economic resources that lead
to the accumulation of capital is concentrated in a particular group of people.
Prohibition against usury
has its own implications for the harmonization of international accounting
standards. So far the standards of internationally accepted accounting
always consider the interest factor, which is clearly prohibited in Islam
(Hamid et al., 1993). Examples of the resulting IASB accounting standards
(IASC) is accounting for the lease / lease (IAS 17), Accounting for Pension
Funds (IAS 19 and IAS 26), and Cost Accounting Capitalization of Borrowing (IAS
23). The standard is essentially the same as the accounting standards
issued by the Financial Accounting Standards American Board (FASB), such as
pension fund accounting standards (SFAS 87 and 88), Long-Term Debt Amortization
(Accounting Principles Board, APB 12), Interest on Receivables and Payables (APB
21), Leasing (SFAS 12), Restukturition Debt (SFAS 15), Reporting Debt Retirement (SFAS 88)
and the repayment of debt (APB 26).
Another issue to consider
is the issue relating to the valuation of the assets. In the Anglo-Saxon
accounting, valuation of an asset, especially inventories and securities are
generally based on the concept of conservatism. This concept recognizes
income or loss or reduction of assets despite the decline has not been
realized. In contrast, the concept is to delay recognition of revenues or
increase in value of assets to income or an increase in the value of these
assets are actually realized. The consequences of this concept is the use
of the method of inventory valuation and short-term securities based on the
lower of cost and market value (lower of cost or market). Meanwhile, for the
purposes of calculating, which is one of the purposes of reporting based on the
teachings of Islam-Islam assess both types of assets are based on net realizable
value or net realizable value (Gambling and Karim 1991). Thus it is clear
that Islam does not recognize the concept of the lowest value between cost and
market prices, such as those used in capitalist accounting.
The third problem is the application of the concept of sustainability (going concern). Use of this concept maybe use historical cost valuation of assets based on the measurement to demonstrate objectivity. On the basis of historical cost, the value of assets on a particular date (the date of the balance sheet) will be equal to the value of assets on the date the asset was first acquired. The main reason the application of the concept of going concern are: (1) to allow for the classification of assets and liabilities into current and noncurrent group, (2) allows for the matching (matching) between revenue and costs.
The third problem is the application of the concept of sustainability (going concern). Use of this concept maybe use historical cost valuation of assets based on the measurement to demonstrate objectivity. On the basis of historical cost, the value of assets on a particular date (the date of the balance sheet) will be equal to the value of assets on the date the asset was first acquired. The main reason the application of the concept of going concern are: (1) to allow for the classification of assets and liabilities into current and noncurrent group, (2) allows for the matching (matching) between revenue and costs.
From the standpoint of
Islam, both of them may be questionable and irrelevant (Gambling and Karim
1991). In Islam, the classification of assets into current and noncurrent
basically meant to determine the amount of wealth that will be used in
determining the amount of zakat. Current assets are expected to be
consumed, or sold to generate cash in the period of time in which the charity
will be imposed on such property.
While non-current assets,
will remain detained or kept in the period beyond the period of zakat
(Abdel-Magid 1981). On the basis of this, financial statements must be
able to present information about the assets, which can be used as the basis
for the imposition of zakat. Thus the zakat assessments will determine the
method of valuation of assets. Appropriate method to assess the
assets relevant to the purposes of calculating the net realizable value is the
alms or assessment methods suggested by Chambers (1966) that is continuously
contemporary accounting (COCOA).
On the basis of the method
Cocoa assets should be assessed according to market value at balance sheet
date. So each asset must be assessed individually, separate from the
company's overall wealth. Consequently, in the context of Islam there is
no recognition of assets such as goodwill, because goodwill can not see his
form and shape can not be individually assessed separately from the company's
overall value.
Another thing that is
contrary to the teachings of Islam is the use of the concept of economic
substance over legal form. Anglo-Saxon accounting model clearly separates
the economic substance of a transaction with the legal status of the
transaction. On the basis of this concept, if a transaction has economic
substance of the terms of the criteria as an element of financial statements
(because they meet the definition, can be measured and recognized in the
financial statements), the transaction can be recognized in the financial
statements even though not legally recognized. The classic example is a
machine that was hired by the company through a capital lease contract. If
the economic substance meets the criteria as an asset (as stipulated in the
standard), then the machine can be recognized as leased property the tenant and
reported on the balance sheet as a tenant property. However, from the
juridical aspect of the machine remains the property owners rather than
renters. This concept, clearly contrary to the concept of ownership in
Islam (Karim 1995).
On the basis of different
points of view above, it is quite reasonable to say that the accounting should
be developed in accordance with the environmental conditions in which the
accounting will be practiced. Accounting practices of the capitalist,
obviously not everything can be practiced in an environment that Islam breath
because the concept is clearly different and many are contradictory.
C. Joint Reconciliation & Recognition (Reciprocity) Difference Standard Accounting
Two other approaches are proposed as a
possible solution is used to overcome the problems associated with cross-border financial report:
(1) Reconciliation and
(2) Recognition of Joint (also referred to as "reciprocity" / reciprocity).
(1) Reconciliation and
(2) Recognition of Joint (also referred to as "reciprocity" / reciprocity).
Through reconciliation, a
foreign firm can prepare financial statements using accounting standards country of
origin, but must provide a reconciliation between the
accounting measures (such as net income and shareholders'
equity) in the country of origin and incountries where
the financial statements dilaporkan.Sebagai example, U.S. CapitalMarkets Commission (SEC). Recognition occurs
when the parties together outside the home country regulator of
financial have report foreign companies which are based on the
principles of state asal. Example, the London Stock
Exchange accept financial statements based on GAAP reporting AS for made by
companies foreign.
With line trading capital then hermonization be important to the problems associated with the contents with the contents of financial statements performed by cross-borderapproach to reconciliation, and recognition of the uniformity together. In complete financial statements based on different principles.
With line trading capital then hermonization be important to the problems associated with the contents with the contents of financial statements performed by cross-borderapproach to reconciliation, and recognition of the uniformity together. In complete financial statements based on different principles.
D. Promoter
Organization of Harmonisation of International Accounting Standards
Harmonization in the
International Accounting Standards, which made the organization into an
international accounting standard setters.
Six organizations have
become a major player in the determination of the international accounting
standards and in promoting international harmonization of accounting:
1) International Accounting Standards Board (IASB).
2) The Commission of the European Union (EU).
3) The International Organization of the Capital Market Commission (IOSCO).
4) The International Federation of Accountants (IFAC).
5) Intergovernmental Working Group of Experts on the United Nations International Standards of Accounting and Reporting (International Standards of Accounting and Reporting - Isar), part of the United Nations Conference in Trade and Development (United Nations Conference on Trade and Development - UNCTAD).
6) Working Group in the Accounting Standards Organization of Economic Cooperation and Development (OECD Working Group).
§ International Accounting Standards Board
1) International Accounting Standards Board (IASB).
2) The Commission of the European Union (EU).
3) The International Organization of the Capital Market Commission (IOSCO).
4) The International Federation of Accountants (IFAC).
5) Intergovernmental Working Group of Experts on the United Nations International Standards of Accounting and Reporting (International Standards of Accounting and Reporting - Isar), part of the United Nations Conference in Trade and Development (United Nations Conference on Trade and Development - UNCTAD).
6) Working Group in the Accounting Standards Organization of Economic Cooperation and Development (OECD Working Group).
§ International Accounting Standards Board
International Accounting
Standards Board (IASB), formerly the IASC, the standards-making body that is
independent of the private sector which was founded in 1973 by professional
accounting organizations in nine countries and restructured in 2001
(reorganization of the IASC to make in an umbrella organization that
dibawahnyamengeluarkan 41 Standard International Accounting (IAS) and a
Framework for the Preparation and Presentation of Financial Statements.
IASB objectives are:
1. To develop in the public interest, a set of global accounting standards are of high quality, understandable and can be applied which requires high quality information, transparent, and comparable in the financial statements and other financial reporting to help participants in capital markets and other users in making certain decisions.
2. To encourage the use and application of these standards are ketat.IASB do his job).Before the restructuring, the IASC issued 41 International Accounting Standards (IAS) and a Framework for the Preparation and Presentation of Financial Statements.
3. To bring the convergence of national accounting standards and International Accounting Standards and International Financial Reporting Standards in the direction of high-quality solutions.
The core standards of IASC and IOSCO Agreement
1. To develop in the public interest, a set of global accounting standards are of high quality, understandable and can be applied which requires high quality information, transparent, and comparable in the financial statements and other financial reporting to help participants in capital markets and other users in making certain decisions.
2. To encourage the use and application of these standards are ketat.IASB do his job).Before the restructuring, the IASC issued 41 International Accounting Standards (IAS) and a Framework for the Preparation and Presentation of Financial Statements.
3. To bring the convergence of national accounting standards and International Accounting Standards and International Financial Reporting Standards in the direction of high-quality solutions.
The core standards of IASC and IOSCO Agreement
IASB (and formerly IASC)
has sought to develop accounting standards that will be received by the
securities regulatory bodies around the world. IOSCO Technical his approval
to the plan as follows:
Council (IASC) has
developed a work plan approved by the Technical Committee which, if
successfully completed will result in IAS comprising a comprehensive set of
core standards. The completion of this comprehensive standard that is
acceptable to the Technical Committee (IOSCO) allows approval of the Technical
Committee for the use of IAS in the need to raise capital and cross-border
listing of shares across global markets. IOSCO approved IAS 7, Statement
of Cash Flows, and has given an indication to the IASC that 14 of the
International Accounting Standards that exist now do not require additional
improvements, provided that other standards are successfully completed.
Structure of the IASB's New
Structure of the IASB's New
IASB Council established a
Working Group on Strategies (Strategy Working Party, SWP), which considers how
should the strategy and structure of the IASC after completing the program of
work of this standard. Which supports the proposed new structure that
essentially are: (1) The IASC will be established as an independent
organization, (2) the organization will consist of two main bodies, the Trust
and the Council, and the Permanent Committee on Interpretation (now known as
International Financial Reporting Interpretation Committee) and the
Standards Advisory Council, and (3) the trust will appoint board members, conduct
surveillance and gather the necessary funds, while the board has sole
responsibility for setting accounting standards. Restructured IASB met for
the first time in April 2001. IASB, after reorganization, will include the
following agencies:
1) The Guardian. IASB has 19 trustee: six from North America, six from Europe, four from the Asia / Pacific, and three from other regions (depending on the determination of the overall geographical balance).
2) The Board IASB. Council to establish and improve standards of financial accounting and reporting efforts. Responsibilities include "meet the responsibility for all IASB technical issues including the preparation and publication of the International Accounting Standards, International Financial Reporting Standards and Draft Standards and final approval of the interpretations issued by the Financial Reporting Interpretation Committee", and approve project proposals and methods and procedures for developing standards. The goal is to build partnerships with national bodies because everything works together to achieve convergence of accounting standards around the world.
3) Standards Advisory Board. Standards Advisory Board, appointed by the Trustees, consisting of "thirty or more members, who have professional backgrounds and different geographical, appointed for a three-year renewable".
4) International Financial Reporting Interpretation Committee (IFRIC). IFRIC comprises 12 members appointed by the trust. IFRIC interpret "the application of International Accounting Standards and International Financial Reporting Standards in the context of the IASB Framework," issued a draft interpretation and evaluate the comments above and obtain board approval for the final interpretation.
Recognition and support for the IASB
1) The Guardian. IASB has 19 trustee: six from North America, six from Europe, four from the Asia / Pacific, and three from other regions (depending on the determination of the overall geographical balance).
2) The Board IASB. Council to establish and improve standards of financial accounting and reporting efforts. Responsibilities include "meet the responsibility for all IASB technical issues including the preparation and publication of the International Accounting Standards, International Financial Reporting Standards and Draft Standards and final approval of the interpretations issued by the Financial Reporting Interpretation Committee", and approve project proposals and methods and procedures for developing standards. The goal is to build partnerships with national bodies because everything works together to achieve convergence of accounting standards around the world.
3) Standards Advisory Board. Standards Advisory Board, appointed by the Trustees, consisting of "thirty or more members, who have professional backgrounds and different geographical, appointed for a three-year renewable".
4) International Financial Reporting Interpretation Committee (IFRIC). IFRIC comprises 12 members appointed by the trust. IFRIC interpret "the application of International Accounting Standards and International Financial Reporting Standards in the context of the IASB Framework," issued a draft interpretation and evaluate the comments above and obtain board approval for the final interpretation.
Recognition and support for the IASB
International Financial
Reporting Standards have now widely accepted throughout the world. For
example, these standards:
(1) Used by many countries as a basic national accounting terms;
(2) Used as an international benchmark in most major industrial countries and emerging market countries to make his own standards;
(3) Accepted by many stock exchanges and regulatory bodies that allow foreign or domestic companies to submit financial statements prepared under IFRS, and
(4) Recognized by the European Commission and other supranational bodies.
(1) Used by many countries as a basic national accounting terms;
(2) Used as an international benchmark in most major industrial countries and emerging market countries to make his own standards;
(3) Accepted by many stock exchanges and regulatory bodies that allow foreign or domestic companies to submit financial statements prepared under IFRS, and
(4) Recognized by the European Commission and other supranational bodies.
E. New
approach to the EU in the European Money Market Integration
§ Development Cooperation Ministry – EU
§ Development Cooperation Ministry – EU
Development cooperation RI
- The EU is one of the main pillars of bilateral relations between Indonesia -
the EU. The development of relations between Indonesia - the EU is also
reflected in the focus of development cooperation RI - EU that is recipient
driven and tailored to the national development program of Indonesia.
The EU underlined the need to build a new relationship more closely with Indonesia through increased development cooperation program that supports the process of democracy, good governance, sustainable economic and social development and poverty erodes.
The EU underlined the need to build a new relationship more closely with Indonesia through increased development cooperation program that supports the process of democracy, good governance, sustainable economic and social development and poverty erodes.
Good relations RI - is
reflected in EU development cooperation set out in the Country Strategy Paper
(CSP), which contains a joint strategy to support national development.CSP in
2002-2006 aimed to strengthen democracy and improve good governance through
support to economic development, social and environmental.
CSP 2002-2006 National Indicative Programe set out in (NIP) which consists of two annual cooperation program. In the NIP 2005-2006, there are three priorities: education cooperation, law enforcement and security, economic cooperation in particular the management of public funding, with a value of 72 million Euro project.
CSP 2002-2006 National Indicative Programe set out in (NIP) which consists of two annual cooperation program. In the NIP 2005-2006, there are three priorities: education cooperation, law enforcement and security, economic cooperation in particular the management of public funding, with a value of 72 million Euro project.
As a follow-up to the end
of the CSP program during the period 2002-2006, the EU has adopted the CSP
program period of 2007-2013 which focuses on the education sector, trade and
investment, as well as law enforcement and good governance. Komisioner EU Foreign Relations,
Ms. Bennita Ferrero Waldner on May 15, 2007 had sent a letter to Foreign
Affairs that the European Commission has approved the preparation of the CSP
2007-2013 for Indonesia as well as the Multi-annual Indicative Programe
2007-2010.
In a statement, Ferrero
stated that the European Commission will increase financial aid for development
cooperation was 494 million Euro in the CSP program 2007-2013 and 248 million
Euro in the Multi-annual Indicative Programe 2007-2010.
CSP 2007-2013 was signed
on the visit of European Commission President Jose Manuel Barroso on 23
November 2007 in Jakarta.
§ The role and interests of Indonesia in the EU
§ The role and interests of Indonesia in the EU
The EU as a form of
regional co-operation of Europe with 27 member states, the population of 499
million, GDP of 16.8 billion euros (28% of world GDP) has become a major force
of economic and global politics. Currently the EU is the world's largest
trading power which controls 20% of global import-export value.
EU member countries
consist of Austria, Belgium, Rep. Ceska, Denmark, Estonia, Finland,
France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, Netherlands, Poland, Portugal, Cyprus, Slovakia, Slovenia,
Spain, Sweden, Britain, Bulgaria and Romania.
For Indonesia, the EU is
still an important market and one of the main sources of foreign investment in
Indonesia. Bilateral trade in 2008 reached USD 28.20 billion and continues
to show an increasing trend from year to year.
The EU is Indonesia's
export market potential. The EU is the main markets for Indonesia's
largest after the United States and Japan. Indonesia's exports to the EU
in 2008 stood at 15.45 billion U.S. dollars, while imports from the EU Indonesia
in 2008, stood at U.S. $ 10.5 billion U.S. dollars.
Development of bilateral
relations between Indonesia and the EU are not apart of the dynamics of
developments that occurred in the European Union (EU) and Indonesia. UE has succeed to as a
solid regional grouping, continues to carry out consolidation through a process
of integration in political and economic fields in order to achieve his
ambition to unite all countries in Europe under the EU umbrella.
Similarly, Indonesia's
democracy, a stable and recognized by the international community as an
important partner in the region, both of which are important actors that
continue approached each other to strengthen partnerships in order to be better
able to respond to global challenges.
The linkage between the
issues and interests of Indonesia and the EU have created a common agenda to
strengthen the bilateral cooperative relations of mutual benefit.
EU considers Indonesia as
a democratic state with the largest Muslim population in the world, potentially
as a catalyst for regional security and stability. EU considers Indonesia
has a strategic role for the maintenance of stability and security efforts in
the region.
EU's attention to
political developments in Indonesia is generally a matter of democracy, good
governance and human rights. The EU is also paying attention to and
support for Indonesia's efforts to combat terrorism and provide support to the
development taking place in Indonesia.
On the other hand, Indonesia to see the EU as a global political and economic power that can be a partner to support the achievement of national interest. EU's increasing role in both global and regional context is the embodiment of one of its formation, which is to affirm the role of Europe in the world.
On the other hand, Indonesia to see the EU as a global political and economic power that can be a partner to support the achievement of national interest. EU's increasing role in both global and regional context is the embodiment of one of its formation, which is to affirm the role of Europe in the world.
EU's approach to
multilateralism while maintaining Indonesia is an important partner in
responding to global issues. In terms of external relations with Asia, in
recent years the EU showed its ambitions to increase its political role in
Southeast Asia by enhancing cooperation with ASEAN in order to create "an
international order based on effective Multilateralism".
Indonesia is seen as a
country that has a strategic role for the efforts to maintain stability and
security in the region. EU relations with Indonesia have been established
within the framework of EU cooperation - ASEAN, ARF and ASEM.
Change of leadership and
more democratic reformers in Indonesia was welcomed by the EU because it is
more an opportunity for the EU to conduct political dialogue with Indonesia.
EU's attention to political developments in Indonesia is generally a matter of democracy and human rights. In addition, with regard to the emergence of terrorism, the EU is also paying attention and support for Indonesia's efforts to combat terrorism.
EU's attention to political developments in Indonesia is generally a matter of democracy and human rights. In addition, with regard to the emergence of terrorism, the EU is also paying attention and support for Indonesia's efforts to combat terrorism.
Especially with regard to
security issues and separatism in Aceh, Maluku and Papua, the attitude of the
EU and its member states have expressed their support for the Republic of
Indonesia and support the peace efforts through dialogues.
§ EU (EUROPEAN UNION - EU)
One goal is to achieve the
integration of EU financial markets of Europe.
To achieve this goal, the
EC has introduced a directive and take a huge initiative to achieve a single
market for:
• Acquisition of capital within the EU;
• Creating a common legal framework for securities and derivatives markets are integrated;
• Achieve a single set of accounting standards for companies whose shares are listed.
Directive Fourth, Seventh and Eighth
Fourth EU directive, issued in 1978, is a set of accounting rules in the most extensive and comprehensive framework.
Seventh directive, issued in 1983, addresses issues consolidated financial statements.
Eighth Directive, issued in 1984, discussed various aspects of professional qualifications that are authorized to carry out the audit as required by law (mandatory audit).
Is the EU harmonization efforts have so far?
• Acquisition of capital within the EU;
• Creating a common legal framework for securities and derivatives markets are integrated;
• Achieve a single set of accounting standards for companies whose shares are listed.
Directive Fourth, Seventh and Eighth
Fourth EU directive, issued in 1978, is a set of accounting rules in the most extensive and comprehensive framework.
Seventh directive, issued in 1983, addresses issues consolidated financial statements.
Eighth Directive, issued in 1984, discussed various aspects of professional qualifications that are authorized to carry out the audit as required by law (mandatory audit).
Is the EU harmonization efforts have so far?
Fourth and Seventh
Directives have a dramatic effect on the financial reporting across the EU,
namely bringing the accounting in all EU member States to stage a good
uniformity and relatively adequate. This directive will harmonize the
presentation of profit and loss (income statement) and balance sheet and
increase the minimum additional information in the record, specifically the
influence of tax rules on disclosure of the reported results.
New Approach to EU and European
Financial Market Integration
Commission announced that
the EU needs to move precisely in order to provide a clear signal that
companies are trying to do the recording in the United States and other world
markets will still be able to survive in the EU accounting framework. EC
also stressed that the EU strengthens its commitment to the international
standard-setting process, which offers the most efficient and quick solutions
to problems faced by companies operating on an international scale.
In 2000, the EC adopted a new financial reporting strategy.
Resources:
In 2000, the EC adopted a new financial reporting strategy.
Resources:
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