Accounting for business combinations Financial Case Study Questions Paper

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Instructions

To read the case study attached below, and answer the following questions:

James, M. L. (2010). Accounting for business combinations and the convergence of International Financial Reporting Standards with U.S. Generally Accepted Accounting Principles: A case study. Journal of the International Academy for Case Studies, 16(1), 95-108.

  1. What key financial ratios will be affected by the adoption of FAS 141R and FAS 160? What will be the likely effect?
  2. Could any of the recent and forthcoming changes affect the company’s acquisition strategies and potentially its growth?
  3. What were FASB’s primary reasons for issuing FAS 141R and FAS 160?
  4. What are qualifying SPEs? Do they exist under IFRS? What is the effect of FAS 166 eliminating the concept of qualifying SPEs on the convergence of accounting standards?
  5. If the company adopts IFRS, what changes should management be aware of?
  6. What are the principle differences between IFRS and U.S. GAAP?

Your submission should be a minimum of three pages in length in APA style; however, a title page, a running head, and an abstract are not required. Be sure to cite and reference all quoted or paraphrased material appropriately in APA style.

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Explanation & Answer

Attached.

ACCOUNTING

1
Accounting for Business

The adoption of FAS 141R and FAS 160 will impact the financial statement ratios. The
fiscal period will require codified section that will improve securitization. In the process, the
organizations will require hiring specialized individuals who will focus on the codes. However,
the issue will promote the general security of the information as the codified sections will be
assigned to different departments in the organization (James, 2010). Additionally, annual
financial records will consist of the affected ratios. In this way, the management at the
organization will have transparent information on the transfers made during the business period.
More so, it is the responsibility of the organization to manage the impacts of the FAS 141R and
FAS 160 to ensure the organization benefits from the adoption. Notably, the reflection of the
changed ratios financial statements in annual reports creates an impression of transparency on
the organization’s part.
The changes have the potential of affecting the organization’s acquisition strategies and
growth in the sense that the transparency indicates have the ability to attract more investors.
Shamrock (2012) argues that transparency is a vital part of building a reputation. Therefore,
when the organizations implement the changes, there is a highe...


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