Question
Swisscom AG, the principal provider of telecommunications in Switzerland, pre- pares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). Until 2007, Swisscom
Swisscom AG, the principal provider of telecommunications in Switzerland, pre- pares consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). Until 2007, Swisscom also reconciled its net income and stockholders equity to U.S. GAAP. Swisscoms consolidated financial state- ments from a recent annual report are presented in their original format in Column 1 of the following worksheet. Note 27, Differences between International Financial Reporting Standards and U.S. Generally Accepted Accounting Principles, which includes Swisscoms U.S. GAAP reconciliation, also is provided.
Required 1. Use the information in Note 27 to restate Swisscoms consolidated financial statements in accordance with U.S. GAAP. Begin by constructing debit/credit entries for each reconciliation item, and then post these entries to columns 2 and 3 in the worksheets provided. 2. Calculate each of the following ratios under both IFRS and U.S. GAAP and determine the percentage differences between them, using IFRS ratios as the base: Net income/Net revenues Operating income/Net revenues Operating income/Total assets Net income/Total shareholders equity Operating income/Total shareholders equity Current assets/Current liabilities Total liabilities/Total shareholders' equity
Which of these ratios is most (least) affected by the accounting standards used?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started