Research Paper (undergraduate) from the year 2008 in the subject Business economics - Business Management, Corporate Governance, grade: 1,3, University of applied sciences, Munich, language: English, abstract: Due to a regulation of the European Union (EU) concerning financial accounting issued on June 6th, 2002, all listed companies in EU are obligated to provide their Consolidated Financial Statements (CFS) in accordance with financial accounting principles of International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS) from January 1st, 2005. This regulation enables a necessary harmonization of accounting principles within the EU and supports a clear comparability of CFS worldwide. The object of this study is to analyze major differences of CFS in German GAAP and IAS/IFRS. Thereby, variations of both accounting standards are compared and a major difference is explained thoroughly with a concrete example. The major differences of CFS in IAS/IFRS and German GAAP result from different aims of both accounting standards. The German GAAP is strongly based on prudence principle for protection of creditors and authoritative principle (tax accounting based on commercial accounting). In comparison, the IAS/IFRS deliver potential investors realistic and decision useful information about assets, finance, and profit situations of a company (true and fair view / fair presentation principle). These basic principles could be reflected in several key points of the both accounting standards whose differences are clarified in this study. Furthermore, an essential key point of CFS namely the basis of consolidation (contains enterprises included in the consolidation and capital consolidation methods) is illuminated with a concrete example. Hereby, the relation between the control influence of the parent enterprise on its "sub-entities" and the correspondent capital consolidation methods are studied.

Research Paper (undergraduate) from the year 2008 in the subject Business economics - Business Management, Corporate Governance, grade: 1,3, University of applied sciences, Munich, language: English, abstract: Due to a regulation of the European Union (EU) concerning financial accounting issued on June 6th, 2002, all listed companies in EU are obligated to provide their Consolidated Financial Statements (CFS) in accordance with financial accounting principles of International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS) from January 1st, 2005. This regulation enables a necessary harmonization of accounting principles within the EU and supports a clear comparability of CFS worldwide. The object of this study is to analyze major differences of CFS in German GAAP and IAS/IFRS. Thereby, variations of both accounting standards are compared and a major difference is explained thoroughly with a concrete example. The major differences of CFS in IAS/IFRS and German GAAP result from different aims of both accounting standards. The German GAAP is strongly based on prudence principle for protection of creditors and authoritative principle (tax accounting based on commercial accounting). In comparison, the IAS/IFRS deliver potential investors realistic and decision useful information about assets, finance, and profit situations of a company (true and fair view / fair presentation principle). These basic principles could be reflected in several key points of the both accounting standards whose differences are clarified in this study. Furthermore, an essential key point of CFS namely the basis of consolidation (contains enterprises included in the consolidation and capital consolidation methods) is illuminated with a concrete example. Hereby, the relation between the control influence of the parent enterprise on its “sub-entities” and the correspondent capital consolidation methods are studied.

Inhaltsangabe:Abstract: This case study deals with an important financial aspect of multinational companies, i.e. their obligation of accounting. Until the year 2000, BMW used to prepare its annual external audits under German Commercial Code Standards (HGB). This tradition ended in 2000, when BMW accounted under International Accounting Standards (IAS) for the first time. 7 years before, Mercedes-Benz was the first German automotive manufacturer adopting international Standards in 1993. But in Mercedes case US-Generally Accepted Accounting Principles (US-GAAP) were chosen, because the objective was to become listed at the New York Stock Exchange (NYSE). At this time US-GAAP were not accepted outside the North American Free Trade Association (NAFTA), esp. not by the EU Commission, but the US-Principles were applied in the largest and most important stock market worldwide. On the other hand, US organizations like the Securities and Exchange Commission (SEC) did not accept any other accounting standards in these days. Accordingly, Mercedes-Benz had to prepare two annual audits: one under US-GAAP and the other under HGB. This treatment, obviously, was highly inefficient, providing lots of encumbrances to US-capital-seeking European companies: accounting and auditing took too much time, personnel resources and money. Another negative effect was that many US companies hesitated with urgently required investments in Europe. But nevertheless, multinational groups seemed to have several advantages by using international accounting standards, even if they had to prepare more than one audit annually. Within the 1st part, this case study provides basic information dealing with accounting standards, in particular reasons and objectives, organizational patterns and the process of IAS becoming international accepted by pointing out their most important differences compared to US-GAAP and German HGB Standards. The 2nd part deals with the reasons of changing BMW s accounting standards by looking at the Group s key markets and the impact of IAS-adoption by examining their figures of non current assets, inventories, other current assets, liabilities & deferred incomes, provisions, equity as well as research & development within a four years comparison. At last the 3rd part gives an examination and summary of the results of IAS-reception for BMW, the effects on the stock market, changes of rating on the global market and gives hints to future [...]