CONVERGENCE OF IFRS

Convergence of International Financial Reporting Standards

Abstract

This paper has discussed the convergence of the IFRS in the global perspective. Moreover, this paper also has discussed the arguments for and against the world wide convergence of the international financial reporting standards. To support the arguments two companies has been selected from different countries (US and Australia). This paper has evaluated the annual reports of two companies (Harley Davidson and Advanced Engine Components Limited) for the financial year 2012. On the basis of the analysis of these two companies arguments have been made in the favor of the convergence of the International Financial Reporting Standards.

Convergence of International Financial Reporting Standards

Introduction

This paper discuss the arguments in favor or and in against of the global convergence of the IFRS (International Financial Reporting). Moreover, this paper analyzes the accounting policy statement that has been used in the financial reports of the two selected companies. The companies that have been selected for the analysis are from two different stock markets. First company should be listed in the ASX (Australian Securities Exchange) and the other company that has been selected for the analysis is listed in the New York Stock Exchange (NYSE). On the findings of the above mentioned analysis the discussion has been done in favor and in against of the convergence of the IFRS. The critical review has been conducted to support and argue for the global convergence of IFRS. The two companies that have been selected for the research are Harley Davidson and Advanced Engine Components Limited. Harley Davison is listed in the NYSE whereas Advanced Engine Components Limited is listed in ASX.

Harley Davidson

Harley Davidson is an American company involved in the manufacturing of motorcycles. The company faced an intense competition from Japanese competitors. This compels the company to strive towards excellence by heavy customization of bikes through stylish designs and performance. The company enjoys a significant brand name which is well renowned through the world. The issues and challenges faced by Harley Davidson during the great depression are exports. The business experienced turmoil in previous times which affected the profitability of the company. However, Harley Davidson did not suspend their operations. The company has a history of crisis which was eventually overcome with the passage of time and rose to fame by their promotional activities and unique propositions (Annual report 2012 Harley Davidson). Therefore, the company has a considerable amount of recognition around the globe which is praised by public and target market. The company operations have compelled the company to expand aggressively and capture significant market share.

Advanced Engine Components Limited

Advanced Engine Components Limited is an Australian company. The company operates the business of the sales and the commercialization NGVS (Natural Gas Vehicle System), it also sales the engines of the natural gas vehicles, the spare parts and the components. The company has the specialty of the making the EFI engines and engine management technologies so that it enables the engines to run on gas (natural ...