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Harmonisation Of Accounting.

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Introduction

To: Mr Williams From: 123456 Title: Harmonisation Of Accounting Date: 07/04/2003 Introduction: Harmonisation, also known by standardisation, uniformity and convergence are used refer to efforts to ensure that like transactions and events are accounted for in a like way wherever they take place or are reported. Different players have had different levels of success, while some have shifted their focus to notions of equivalence or argued for mutual recognition. Arguments Against Harmonisation: The differences in accounting requirements matter now that business, investment and capital markets are international because both domestic and foreign readers use financial statements. When accounting requirements differ, readers may struggle to distinguish the changes in results and financial position, which are caused by variations in performance from the effects caused by the use of different accounting requirements. ...read more.

Middle

Companies may also complain about what they perceive as an uneven playing field on which they have to comply with more onerous requirements than those of their competitors in other countries. Arguments For Harmonisation: The sole purpose of the harmonisation of national accounting requirements is to harmonise the actual reporting practices of companies. The process is helped when companies adopt accounting practices, sometimes voluntarily, which are additional to those which are required by national requirements and which are in accordance with international practice and requirements. This often involves the publication of information which is not currently required by national requirements but which is commonplace in the annual reports of other international companies. Possibly the most important argument for the harmonisation of accounting practices is the fact that everyone will be aware of what everyone else is doing and more importantly what those figures mean. ...read more.

Conclusion

This will mean that they are at an acceptable standard and will not be required to be put to additional expenditure further down the line meaning that extra revenue could be put to greater use in research and development or possible even expanding of the company. Evaluation: Overall I believe that the harmonisation of accounting practices is a very good idea. It means that everyone all over the world can understand each other and if necessary help each other out. With it being a global understanding it can only help international trade and try to make the world a safer place. Without the place of harmonisation there is the greater chance of conflicts arising and arguments about who has the greater practices and what information they actually contain. ...read more.

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