Types of accounting

At the Chillicious blog, they recently laid out the different types of accounting, which are mainly determined by the different types of firms they serve.

• Private or Industrial Accounting
• Public Accounting
• Governmental Accounting
• Fiduciary Accounting
• National Income Accounting

For an in-depth look at these different types of accounting, read here.

Canada to switch to IFRS by 2011

According to Reuters, public Canadian companies are slow to adapt the new IFRS accounting system. With over 100 companies adopting IFRS, the slow implementation of IFRS could leave some companies rushing to convert to the system before official deadline switch of January 1, 2011.

Yet the study, conducted by CFERF, FEI Canada, and sponsored by PricewaterhouseCoopers, showed that 12 percent of the 147 public companies surveyed had not yet taken the first step of starting their initial diagnostic assessments.

About 80 percent of public companies remained short of the halfway mark in their overall conversion process.

Read the full story here.

New rule proposed for government bankruptcies

According to Pensions and Investments, GASP has proposed a new accounting rule for governments who are filing for bankruptcy:

For pension and other post-employment benefits, a government could “reject” its plans and related obligations, the exposure draft states. “In that case, the rejected unfunded benefit obligations become general unsecured debt of the government” and the plan participants “would need to present their claims in the creditor’s committee together with all other general creditors of the government” for consideration of payment.

Alternatively, a government would not reject the obligations but bargain to reduce them, according to the statement from the Governmental Accounting Standards Board.

Read the full article here.

IFRS versus US GAAP

At the Accounting Principles blog, Malcolm McKay recently looked at the differences between US GAAP versus the IFRS systems of accounting. He pointed out that according to Audit Integrity, there are no noticable differences between the two systems. He also states that US GAAP has tools that allow for better reporting. What do you think? Is it important to join the rest of the world and keep books in the same accounting method or look towards US GAAP, which according to reports, allows for better analysis?

An Objective Look at International Financial Reporting Standards (IFRS), the report by Audit Integrity, can be read here.

Contingent Liabilities

Another Accounting TimeBomb looks at contingent liabilities in today's post. The article defines a contingent liability as "a possible obligation depending on whether some uncertain future event occurs, or a present obligation but payment is not probable or the amount cannot be measured reliably."

The article points to contingent liabilities as a reason for the current credit problem facing the world today and states that investors should be aware of contingent liabilities before they invest in a company. Read the full article here.

Should states open up accounting to the public

In a recent editorial at PennLive, they express the need for states to open up their public accounting records to the public. The tax payers should know what their taxes are being spent on. They can also begin to have a say on the budget cuts, because it's their money that is funding the state, therefore the public should have a say on what says and what goes.

What do you think? Should State accounting records be opened to the public?

Will principle based accounting improve financial reporting?

In a recent article at The Vancouver Sun, they look at Canada's current switch of public companies to the IFRS accounting system. They believe that the standards are important, but one must also consider the quality of the accounting and financial statements that are in use. They did a study and found out that a principle based approach to accounting can improve the reporting, but the auditors must also have a principle based approach to auditing as well. Read the full article to see how they found that accounting was affected by the different approaches.

Businesses won't be taxed on personal use of cellphones

According to Yahoo!, the IRS would like to repeal the law that states businesses or employees must pay taxes on the personal use of business cell phones. IRS Commissioner Doug Shulman told Congress that advances in technology have made this tax obsolete. Read the full article here.

Obama encourages universal accounting standards

According to WebCPA, Obama released a White Paper yesterday encouraging reform so that American companies have the same standards of accounting by the end of the year. Obama believes that it would allow for better supervision of financial firms. This white paper also calls for the creation of the new Consumer Financial Protection Agency. Read more about the whitepaper here.

Lilly China adds to staff

According to China Daily, Pharma giant Lilly China will begin to add nearly 2,000 positions to its company, including accounting and R&D. Read more about Lilly China and the other companies planning to grow their Pharma companies here.

Capital Standards under review

According to Reuters, there are new standards that could affect the way banks look at off-balance sheet vehicles. This could cause banks to have to move assets throughout books and affect their assets.

Some financial firms created special entities separate from their balance sheets to avoid reporting requirements or to reduce the amount of capital they needed to hold to satisfy regulatory requirements. As the financial storm gathered, uncertainty about some of those vehicles helped undermine confidence in banks and accelerated the financial crisis.

The new standards are aimed at improving accounting and disclosure associated with those vehicles.

Read the full story here.

IFRS and the IT world

In a new article at Computer World, they look at the upcoming decision on converting the United States' accounting system to IFRS, which is regarded globally as the universal accounting standards. This will: help provide transparency information to investors, make it easier to understand financial statements, and help companies make more efficient investment decisions. The decision will be made in 2011 as to whether to adopt the process, and all conversions to the system will have to take place by 2014. The article looks at how CIOs will have to change their current practices. Read it here.

Mark Olson to retire

Mark Olson, the Chairman of the Public Company Accounting Oversight Board, has announced that he will retire July 31. This board polices the US Audit Industry. For more on Olson's work throughout his time on the board, read here.