International Accounting course

Home Tasks (MBA 2020)

Total marks - 30

Task 1 (10 marks)

Choose annual Financial statements or Consolidated financial statements
(which are preferable) of some commonly known companies (except Consolidated
financial statements of Nestle Group and PepsiCo Inc. and Subsidiaries discussed
in class).
These two companies (or groups) must apply different accounting principles
for presentation of information in their financial statements. For example, US
GAAP and IFRS, or local GAAP and IFRS.
Be assured that these Financial statements and supplementary Notes are
posted on the official web sites of these companies.
Based on this information required:
a. Determine the accounting principles (GAAP) the two foreign companies use to
prepare financial statements.
b. Determine whether the two foreign companies provide a set of financial
statements that includes the same components.
c. List any format differences in the companies’ financial statements.
d. Note any terminology differences that exist between the two companies’
financial statements.
e. Assess whether the scope and content of the information provided in the notes to
the financial statements is similar between the two companies.
f. Compare the overall presentation of the financial statements and notes to the
financial statements between the two companies.

Task 2 (10 marks)

Over the years there have been many attempts by national and international
standard setters to find an accepted methods of dialing with the effects of price
changes.
As we discussed in class there have been two main methods put forward by
various accounting standard bodies for reporting the effects of price changes. One
method is based on the movements in general price inflation and is referred to as a
General (or Current) Purchasing Power Approach, the other method is based on
specific price changes of goods and assets and is generally referred as a Current
Cost Approach. Some bodies have also suggested an approach which combines
features of each (and some other) method.
Required.
Explain the advantages and limitations of (pure) historic cost accounts when used
as a basis for assessing the performance of an enterprise.

Task 3 (10 marks)

In its 2016 annual report, Honda Motor Company Ltd. states: the fiscal year ended
March 31, 2015, we changed the basis of the accounting principles used to prepare
our consolidated financial statements from U.S. GAAP to IFRS. Accordingly, the
consolidated financial statements of the Company in this Annual Report have been
prepared in accordance with IFRS, as issued by IASB.

Required:
Discuss the possible reasons for Honda to make such changes need to prepare its
consolidated financial statements in conformity with IFRS.