CHAPTER 2 DEVELOPMENT AND INTERNATIONAL ACCOUNTING CLASSIFICATION

            The general objective of classification is to classify systems according to the characteristics of financial accounting and this khsusnya streuktur reveal the basis on which the members of the group have in common and that distinguish the groups varied from each other. By knowing the differences and similarities ate an understanding of the accounting system will be better.
Here are 8 (eight) factors that influence the development of international accounting:
1.      Sources of funding
America and Britain who have a strong enough trading power has focused on how well management runs the company (profitability), and is designed to help investors analyze the future cash flows and related risks.
2.      Legal System
The western world has two basic orientations: the legal code (civil) and common law (case). In code law countries, law is a complete group that includes the provisions and procedures. In contrast, common law developed on a case by case basis without any attempt to cover all cases in which a complete code.
3.      Taxation
Tax rules can effectively determine accounting standards because the company should record revenue and expenses in dikalim account for tax purposes. When separate financial accounting and tax, tax rules sometimes require the application of certain accounting principles.
4.      Political and economic ties.
Some developing countries use the accounting system adopted by developed countries, but it is there that Karen jug coercion but there is by choice.
5.      Inflation
Inflation causes the distortion of historical cost accounting and affect the propensity (tendency) of a State to apply the changes to the accounts of the company.
6.      Levels of Economic Development
These factors influence the types of business transactions are conducted in an economy and determine what is most important.
7.      Level of Education
Standard accounting practices are highly complex would be useless if misunderstood and misused. Disclosures about the risks of derivative securities will not be informative unless it is read by the competent authorities.
8.      Culture
Four dimensions of national culture, according to Hofstede: individualism, power distance, uncertainty avoidance, masculinity.
Basis of Accounting Classification and Development Approach
International accounting classification can be done in two ways: with consideration and empirically. Classification with consideration depends on the knowledge, intuition and experience. Classification empirically using statistical methods to collect data accounting principles and practices worldwide. Initial classification was proposed by Mueller in the mid-1960s, which identified four approaches to the development of accounting in western countries.
Approach to Development Accounting
Four approaches to the development of accounting in Western countries with market-oriented economic system is as follows:
a)      Based on the macroeconomic approach, obtained from the accounting practices and are designed to improve the national macroeconomic objectives.
b)      Based on the microeconomic approach, accounting bekembang of microeconomic principles. The goal lies in the individual companies that have the purpose to survive.
c)      Based on independent approach, derived from accounting and business practices developed on an ad hoc, with the base slowly and consideration, trial and error, and errors.
d)     Based on a uniform approach, accounting distandariasi and used as a tool for administrative control by the central government. Uniformity in the measurement, disclosure, and will facilitate the presentation of the designer of government, tax authorities, and even managers to use accounting information in controlling all types of businesses.
Reasonable differences Presentation and Compliance with State Laws and the Dominant apply.

Many differences in national accounting is becoming increasingly lost. There are several reasons for this
1.      Hundreds of companies today recorded its shares on stock exchanges outside their home country.
2.      Some state law code, in particular Germany and Japan to shift responsibility from the government’s establishment of accounting standards to private sector groups and independent professional.
3.      The importance of the stock market as a growing source of funding.
Classification based on fair presentation versus legal compliance pose a major influence on many accounting issues, such as:
1.      Depreciation, where the load is determined based on the reduction in the usefulness of an asset during times of economic benefits.
2.      Lease which is substantially the purchase of fixed assets (property) treated as such (fair presentation) or treated as operating leases are common (legal compliance).
3.      Accrued pension cost at the time generated by the employee (fair presentation) paid or charged on the basis of the time you stop working (legal compliance).

About Yohanes Novrianto Simangunsong

MY NAME IS YOHANES
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