Reference no: EM131750106

Mid-Term Assignment

ACCT.6230 - Contemporary Accounting Issues

The first 6 weeks of our course have covered the following 3 topics:

• IFRS International Financial Reporting Standards
• Fair Value
• Revenue Recognition

All 3 topics have significant implications for financial reporting, both for those who prepare the reports and those who use them. One of the most significant, and controversial, is whether or not the changes in the rules will result in greater transparency in financial reporting.

Both Fair Value and Revenue Recognition have been undergoing significant revisions under GAAP, ostensibly for the purpose of providing greater transparency. At the same time, the SEC has declared their intent that the US move towards conversion to IFRS (will a small "let's wait and see" from the newly appointed SEC Chair). Both Fair Value and Revenue Recognition have similar, but different treatments under IFRS and GAAP and are part of the Convergence Project's efforts to bring the treatments closer together.

1. Your assignment is to discuss transparency in financial statement reporting in the context of the 3 topics. This should be YOUR opinion,
based on your exploration of the materials over the past 6 weeks (not just a reiteration of what others think). You should defend, with evidence of your learning, why there would be greater or less transparency. How will each, as viewed independently, enhance or decrease transparency? Discuss them from the point of view of external users of financial statements such as individual and institutional investors, bankers and analysts/ratings agencies. For IFRS, discuss this from the point of view of overall increase or decrease in transparency should the US chose to convert. For Fair Value and Revenue Recognition, do you believe that the newest rules and guidance under GAAP enhance or decrease transparency for current users of the financial statements? Then, assuming that the US moves forward and mandates conversion to IFRS, do you think that the users of the financial statements will gain or lose transparency in the areas of Fair Value and Revenue Recognition, as compared GAAP? Discuss the main differences and use specific Income Statement and Balance Sheet items to illustrate your arguments. Do you think that if the US converts to IFRS, and its more principles based approach, that the US might wind up with a secondary layer of "GAAP like" rules because judgments are perceived as unreliable and uncomparable? Why or why not? You may take
into consideration whether or not transparency is an ideal that can never be achieved, or that with a careful evolution to a single, international standard, that this will achieve the transparency that readers of financial statements have long desired.

2. As MBA students, your future roles in business management will cross many disciplines. These three topics are likely to have a significant impact on your roles. For example, accountants must learn and apply new rules for preparing financial statements. Business Development and Sales professionals may have to restructure contracts and how they sell their products or services so that revenue can be recognized. Those working for investment firms may have to sort out the "true value" of "fair value" when analyzing potential acquisition candidates for their portfolios. Select a role in an organization (perhaps one to which you aspire) and discuss how one of these 3 topics (select only one) will impact that role over the next 35 years.

You may assume that IFRS is adopted by the US during that timeframe. If you chose Fair Value or Revenue Recognition, you may discuss this in the context of current changes to GAAP rules, or the impact if IFRS is adopted.

Just be sure to clarify which scenario, GAAP or IFRS, you have chosen.
Instructions and guidelines for writing your paper.

This is an exercise to demonstrate your understanding of the topics and the implications of the most recent or pending changes on businesses and users of the financial statements. The point of this paper will be to communicate your understanding of the topics and their impact, in a business writing style. The clarity of your thought and arguments should be able to inform and persuade the reader about the topics.

Requirements:

1. The recommended format would be to follow the MLA standard for writing your paper. Proper citations are required. The link to the MLA
website is https://owl.english.purdue.edu/owl/resource/747/01/. Most colleges and Universities use this format, so many of you are probably
familiar with it. This provides excellent guidelines to follow for format, footnotes, citations, etc.

2. Please use Times New Roman 12 pt, with 1" margins, double spaced.

3. Spelling, grammar, format, presentation and quality of thought and writing count for half of the grade. Ask yourself "is your writing clear, well presented and understandable to the audience?" Although this is not an English paper, the reader should not have to hunt through misspelled words, improper grammar and poorly written paragraphs in an attempt to decipher a position.

The other half of the grade will be measured on the quality of the content and evidence supporting your answers. There are no right or wrong opinions, only well written ones. ? I always recommend having a friend, relative or colleague read your paper prior to submission, as it is very hard to see your own mistakes. Also, do not rely entirely on the spelling and grammar check in Word to catch all mistakes! UML has writing tutoring at the Write Place Tutoring Center that may be of assistance, here is the link:

It says that writing tutoring is available for graduate students, although I am not sure if they will accept emailed submission, but you could certainly contact them to see if they would.

1. Your Name and page numbers should appear in footers, with page number centered, name right justified Last First.

2. Page limit, excluding cover page, table of contents, reference pages or appendices, should not exceed 15 pages. In fact, there will be no benefit for "volume" or "creative" writing! The highest grades will go to that whose writing is, to the point, provides support and draws a conclusion in a neat, easy to read package. A business audience, particularly if it is made up of executives, has an extremely short attention span (some say that of a gnat, and since I have been one of them, would agree that it is not too far from the truth!).

Written communications skills are at a premium in the business world today, and those who are able to effectively present their ideas in writing usually go far.

3. Your arguments and defense of a position should be supported by evidence and not just statements like "I feel this way because it makes sense." Avoid a writing style that sounds like you are talking, texting, IM'ing or emailing this is not a conversation, but your position on issues.

4. Good luck, please let me know if you have questions!