INTERNATIONAL ACCOUNTING 25092020 1 Chapter 2 Accounting for

INTERNATIONAL ACCOUNTING ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 1

Chapter 2: Accounting for International transactions Learning Objectives Some basic concepts. Studying Currency exchange. Accounting treatment foreign transactions ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 2

L. O 1 Some basic concepts ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 3

(1) Some basic concepts v Foreign Currency Transactions that done by currency other than the local currency (Functional currency) ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 4

(1) Some basic concepts Functional Currency The Currency of the country in which the company performs their activities in ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 5

(1) Definition of International Accounting v Also, international accounting can be viewed through comparative international perspective , as all accounting methods , principles and standards would be classified in the different countries to be useful for different users. ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 7

(1) Definition of International Accounting v In addition, international accounting could be defined through the international accounting problems that arise from the spread of multinational companies such as translation and exchange rate problems. ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 8

(1) Definition of International Accounting v. International accounting can be defined as: Branch of accounting cares about international accounting practices that arise as a result of the practice of international activities by various multinational companies. ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 9

L. O 2 The need to International Accounting ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 10

(2) The need to International Accounting v. There were several factors that contribute to the emergence of international accounting. These factors are : ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 11

(2) The need to International Accounting Modern international economy properties The growth of multinational companies Increased interest in foreign direct investment Differing systems and methods of accounting practice International monetary system ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 12

(2) The need to International Accounting v. The importance of international accounting can be dervied through the following points: ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 13

(2) The need to International Accounting The accounting principles and standards that have been used to prepare the published financial statements The need to know how to make the necessary adjustments to published financial statements to become valid for comparison by the decision-makers ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 14

(2) The need to International Accounting Identify the information to be disclosed in those statements Recognise the auditing standards to be relied upon to review those statements ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 15

(2) The need to International Accounting The need to account for transactions that be done by foreign currencies Determine the tax effects resulted from international activities ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 16

L. O 3 Objectives and characteristics of International Accounting ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 17

(3) Objectives and characteristics of International Accounting Objectives of International Accounting ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 18

(3) Objectives and characteristics of International Accounting Regulation of accounting and reporting practices that are at an international level Examine the role of accounting in the economies of international companies ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 19

(3) Objectives and characteristics of International Accounting Make comparisons between different accounting systems for countries Understanding of international financial statements so that it can make them more comparable ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 20

(3) Objectives and characteristics of International Accounting Find the suitable solutions for accounting problems resulting from international practice ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 21

(3) Objectives and characteristics of International Accounting Develop a comprehensive framework for reviewing the international financial statements ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 22

(3) Objectives and characteristics of International Accounting v. The characteristics of International Accounting ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 23

(3) Objectives and characteristics of International Accounting v. The characteristics of International Accounting could be recognised through the problems of international accounting ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 24

(3) Objectives and characteristics of International Accounting Currencies exchange rate problem v. This problem arise due to the differences in the prices of currencies between the countries ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 25

(3) Objectives and characteristics of International Accounting Preparation of consolidated financial statements v. This problem arise when there is consolidated financial statements between multinational group of companies. ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 26

(3) Objectives and characteristics of International Accounting The differences between inflation rates between countries ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 27

(3) Objectives and characteristics of International Accounting Tax effects of international transactions v. This problems arise due to the differences in the tax systems between the countries. ﻋﻤﺮﻭ ﻧﺰﻳﻪ. ﺩ 25/09/2020 29