Fachecar 10 Marks Case Study After spending many years working in the Gulf reges Chief Account Michael decided to move to his hometown in the United States. While working in the Gulf region, Michael was involved in the properties of financial statements for a complemente based in Dubai, with buches in all parts of the world. The company followed IFRS standards while preparing the financial statements. After selling in his home in Chicago, Michael joined a leading publishing company in the US which hired him for the post of Senior Accountant, in charge of preparing financial statements for its US division. The company followed accounting standards (US GAAP ped by the Financial Accounting Standards and As Michael's experience basically was en IFRS based financial reporting this posed a challenge while treating different activities Michael fee that it is very cwy to follow IFRS the US GAAP. Further, since most of the companies in US raise funds overseas and carries inimical operations, he felt that IFRS is more relevant for companies in the US with international operation. While preparing the financial statements, le pot coin regading the specific pic is US GAAP and considered as very detailed and every complex. During the year, the internal di department conducted an internal mito examine whether the books of scos prepared by Michael here to the standard puidelines Bolethed, the following hiervations were During the year, the company spend Swing the offices. While preparing the financial reports, Michael considered the expenditure as an operational 2 The washerved that Michel und is reporting revenues fow projects which are curly going on the based on percentage of work completed is not calculated and reported in the financial statement Though the company wed LIFO in the last few years for valuing inventory, Michael has decided to change the inventory valuation method from LIFO to FF. He has informed the editors that the change in dome since the company has stocks materials which are bought at the beginning of the last year at a higher price. During the year, the company has taken aan for capital expenditure, but due to a temporary cash crunch the money was used the cash to pay salaries to the soul. The bank has alter the on the grounds of violation of the Covoareement. Michael has reported the current lubility in the financial While writing of impairments, Michael Baswedsthed for writes Michael argued that any impairment les should be written off in stages and hencea two-stage approach is more appropriate The management called Michael for an explanation of the above observations Thomas a friend of Michael, has been always a critic of using accounting Standards. He considered that conceptual frameworks we trecessary to produce reliable financial sms. As the use of financial statements is to communicate the financial results of the business to internal and external stakeholders, the organization should allow a customid accounting framework the best as it is defusing an accounting Standard set by international bodies Based on the above cancer the following: Maximum word count for Case Study is 4 Wonde 1. Explain each of the observation and state whether Michael has followed the devant 2 3 Do you think the convergence of conting standards are required to standardize the costing reports Justify the answer with relevant information from the case Based on this pain your arms a The observations made by Thomas What are the was where IFRS and US GAAP differ? The answer should che samples from the Fachecar 10 Marks Case Study After spending many years working in the Gulf reges Chief Account Michael decided to move to his hometown in the United States. While working in the Gulf region, Michael was involved in the properties of financial statements for a complemente based in Dubai, with buches in all parts of the world. The company followed IFRS standards while preparing the financial statements. After selling in his home in Chicago, Michael joined a leading publishing company in the US which hired him for the post of Senior Accountant, in charge of preparing financial statements for its US division. The company followed accounting standards (US GAAP ped by the Financial Accounting Standards and As Michael's experience basically was en IFRS based financial reporting this posed a challenge while treating different activities Michael fee that it is very cwy to follow IFRS the US GAAP. Further, since most of the companies in US raise funds overseas and carries inimical operations, he felt that IFRS is more relevant for companies in the US with international operation. While preparing the financial statements, le pot coin regading the specific pic is US GAAP and considered as very detailed and every complex. During the year, the internal di department conducted an internal mito examine whether the books of scos prepared by Michael here to the standard puidelines Bolethed, the following hiervations were During the year, the company spend Swing the offices. While preparing the financial reports, Michael considered the expenditure as an operational 2 The washerved that Michel und is reporting revenues fow projects which are curly going on the based on percentage of work completed is not calculated and reported in the financial statement Though the company wed LIFO in the last few years for valuing inventory, Michael has decided to change the inventory valuation method from LIFO to FF. He has informed the editors that the change in dome since the company has stocks materials which are bought at the beginning of the last year at a higher price. During the year, the company has taken aan for capital expenditure, but due to a temporary cash crunch the money was used the cash to pay salaries to the soul. The bank has alter the on the grounds of violation of the Covoareement. Michael has reported the current lubility in the financial While writing of impairments, Michael Baswedsthed for writes Michael argued that any impairment les should be written off in stages and hencea two-stage approach is more appropriate The management called Michael for an explanation of the above observations Thomas a friend of Michael, has been always a critic of using accounting Standards. He considered that conceptual frameworks we trecessary to produce reliable financial sms. As the use of financial statements is to communicate the financial results of the business to internal and external stakeholders, the organization should allow a customid accounting framework the best as it is defusing an accounting Standard set by international bodies Based on the above cancer the following: Maximum word count for Case Study is 4 Wonde 1. Explain each of the observation and state whether Michael has followed the devant 2 3 Do you think the convergence of conting standards are required to standardize the costing reports Justify the answer with relevant information from the case Based on this pain your arms a The observations made by Thomas What are the was where IFRS and US GAAP differ? The answer should che samples from the