Examining the differences between United States Generally Accepted Accounting Principles (U.S. GAAP) and International Accounting Standards (IAS): implications for the harmonization of accounting standards

Ampofo, Akwasi; Sellani, Robert J.

doi:10.1016/j.accfor.2004.11.002

Cited by 33 publications

(11 citation statements)

References 15 publications

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“…Overproduction without matching sales demand may cause excessive inventory holding costs and higher obsolescence in the following periods, and thus, might increase the magnitude of inventory write-downs 6 (Lev and Thiagarajan, 1993;Roychowdhury, 2006;Gupta et al, 2010). The US GAAP and IFRS require reporting entities to measure inventory at the lower cost or net realizable value (Ampofo and Sellani, 2005), whereby, the net realizable value can be defined as "the maximum net amount that can be realized from the disposal of an asset within a short period of time, but not in a forced sale situation" (Bedford and McKeown, 1972). Inventory write-downs should take place when the net realizable value is less than the cost, as the company is required to recognize the loss.…”

Section: Literature Review and Predictionsmentioning

confidence: 99%

“…Generally, overproduction is viewed negatively by market participants, as excessive buildup of inventory indicates unnecessary carrying costs 1 (Ruiz-Torres and Mahmoodi, 2010) and higher probability of obsolescence, which might result in more write-downs in the future (Lev and Thiagarajan, 1993;Gupta et al, 2010). As stipulated by the US Generally Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS), a reporting entity is required to measure inventory at the lower cost or net realizable value (Ampofo and Sellani, 2005). The decrease in inventory value below cost (that is, when the net realizable value is less than the cost) will trigger write-downs in inventory, which is income-decreasing for a company, as it is required to recognize the loss.…”

Section: Introductionmentioning

confidence: 99%

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The effects of overproduction on future firm performance and inventory write‐downs

Chan

Wang

2019

Int Trans Operational Res

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This study aims to examine the effects of current overproduction on future operating efficiency and inventory write-downs. Using electronic manufacturing companies listed on NYSE/AMEX/NASDAQ during the period of 2003-2013, this study: (i) employs the interaction term between relative fixed cost levels and excess quantity of inventory produced to measure overproduction, (ii) utilizes the dynamic slacks based measure model to estimate operating efficiency, and (iii) examines inventory write-downs. Our findings show that overproducing firms experience improved but unsustainable subsequent operating efficiency, as overproduction is a result of optimistic sales forecasting, which leads to higher subsequent inventory write-downs. Overall, this paper suggests that production managers should be prudent in anticipating future sales demand, as short product life cycle might cause higher inventory obsolescence on excess production.

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Section: Literature Review and Predictionsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The effects of overproduction on future firm performance and inventory write‐downs

Chan

Wang

2019

Int Trans Operational Res

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“…According to a study conducted by Ampofo and Sellani (2005) , certain goals will be important to the increasing harmonisation of international accounting standards:…”

Section: Aspect (Double Entry) Recognition and Others (D) The Statementioning

confidence: 99%

The regulation framework for the banking sector: The EMU, European banks and rating agencies before and during the recent financial and debt crisis

Liapis¹

2012

Int J Discl Gov

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In this article, I present a holistic regulation framework for the banking sector. The article is based on European banks that are part of the European Monetary Union (EMU). Initially, I focus on the timelines and review the integration of the EMU, relevant legislation and information on member countries ' banking sectors. This information creates the framework for my analysis. A regulation framework for the banking sector should be characterised by transparency, responsibility and performance in several important areas. These areas are the global and European framework for corporate fi nancial reporting, risk management, stockholder value creation, corporate governance, corporate social responsibility and sustainable development. The regulation framework for the banking sector must also consider the fi scal and monetary environment in which a banking institution operates. The global rating system and the rating agencies will also have an important impact on any regulation framework for the banking sector. These two factors play a key role when a fi nancial, credit or debt crisis occurs. The article considers all of the above factors in creating a holistic regulation framework for the banking sector to present in the context of the recent fi nancial, credit and debt crises that have taken place in the EMU.

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“…Diante de tal análise, constata-se que, apesar de apresentarem consideráveis semelhanças, as diferenças observadas entre as normas comprometem a qualidade da informação contábil e distorce o real objetivo do instrumento -garantir que os registros contábeis retratem o valor dos benefícios econômi-cos futuros gerados pelos ativos à entidade (AMPOFO; SELLANI, 2005 …”

Section: Análise Comparativa Das Principais Normas Sobre Impairmentunclassified

Redução Ao Valor Recuperável De Ativos: Um Estudo Nas Empresas Do Setor Petrolífero Mundial

Domingues

Godoy

2012

REPEC

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Examining the differences between United States Generally Accepted Accounting Principles (U.S. GAAP) and International Accounting Standards (IAS): implications for the harmonization of accounting standards

Cited by 33 publications

References 15 publications

The effects of overproduction on future firm performance and inventory write‐downs

The effects of overproduction on future firm performance and inventory write‐downs

The regulation framework for the banking sector: The EMU, European banks and rating agencies before and during the recent financial and debt crisis

Redução Ao Valor Recuperável De Ativos: Um Estudo Nas Empresas Do Setor Petrolífero Mundial

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