Economic Consequences of Accounting Standards   Term Paper ID:45122 Click to get this paper

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Paper Abstract: This paper discusses the concept of "economic consequences of accounting standards," providing several documented examples and brainstorming some others. Paper Introduction: Economic Consequences of Accounting Standards Accounting standards can have economic consequences According toZeff p \'Economic consequences\' refer to the impact ofaccounting reports on various segments of our economic society as citedby Schroeder Sevin Schauer p The authors point out thatthese economic consequences can be intentional or unintentional giving theFinancial Standards Board Statement No Other Post RetirementBenefits as an example Schroeder Sevin Schauer p This standard had intended economic consequences-the disclosures of costsof future employee health care on an annual estimated basis as Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Economic Consequences of Accounting Standards Accounting standards can have economic consequences. 2). ReferencesDe Jong, A., Cifuentes, M.A.R., Verwijmeren, P. SSRN. (2 6). ERS-2 6- 21-F&A. Journal of Business Finance & Accounting, 13(4), (Winter), 467-488. Applying Economic Consequences Analysis in Accounting Standard Setting: A Tax Incidence Approach. 2). According toZeff (1978, p. Accounting standards that require companiesto reveal information that kept hidden could allow them to save money byusing a different tax classification would also have economic consequences. Wiley InterScience. 1). Retrieved on March 6, 2 9 from: http://www3.interscience.wiley.com/cgi-bin/fulltext/119498231/PDFSTART In addition to these documented examples, there are other potentialeconomic consequences of accounting standards that can be assumed byreason, logic, and common sense. Moreover, the consequences do not stop there. De Jong, Cifuentes, and Verwijmeren(2 6) report on the same phenomenon in accounting in the Netherlands.They note that the impact of an IFRS regulation, IAS 32, is that mostpreference shares lose their classification as equity and become classifiedinstead as liabilities, with the reclassification increasing the reporteddebt ratio by 35% on average (De Jong, Cifuentes, & Verwijmeren, 2 6, p.1). The Economic Consequences of IFRS: The Impact of Ias 32 on Preference Shares in the Netherlands. 468). Retrieved on March 6, 2 9 from: http://www.allbusiness.com/accounting/3996489-1.htmlTaylor, P., Turley, S. The authors found that71% of the firms affected in this manner end up buying back theirpreference shares or alter the specifications of the preference shares insuch a way as to maintain the classification as equity, changing the firms'real capital structure (De Jong, Cifuentes, & Verwijmeren, 2 6, p. As the authors pointout, tax shifting does not necessarily mean that taxes are unpaid to thetax authority but rather that they are paid under the wrong heading andtherefore cause the wrong tax unit to bear the tax burden (Taylor & Turley,1986, p. The authors point out thatthese economic consequences can be intentional or unintentional, giving theFinancial Standards Board Statement No. 15 . An accounting standard that forces abusiness to retool in order to meet the standard is obviously going to costmoney, and one that requires it to hire additional help in order to meetthe standard will do the same. 2).This standard had intended economic consequences-the disclosures of costsof future employee health care on an annual estimated basis, as a currentexpense, but it also had unintended economic consequences when companiesstopped providing those benefits to their employees (Schroeder, Sevin, &Schauer, 2 6, p. Retrieved on March 6, 2 9 from: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=899523Schroeder, R.G., Sevin, S.K., Schauer, D. Another example occurs with reference to taxes; asTaylor and Turley (1986, p. The economic consequences of the Statement of Financial Accounting Standards (SFAS) No. 468). 468) point out, "Tax shifting turns impact intoincidence [and] incidence is where the true economic burden of a taxfalls." This burden may manifest as a reduction in income, consumption,savings, or leisure (Taylor & Turley, 1986, p. The incurring of economic consequences of accounting standards is notrestricted to the United States. (2 6). (1986). ERIM Report Series Reference No. 1 6, "Other Post RetirementBenefits" (1985) as an example (Schroeder, Sevin, & Schauer, 2 6, p. International Advances in Economic Research, (Nov 1). 56), "'Economic consequences' refer to the impact ofaccounting reports on various segments of our economic society" (as citedby Schroeder, Sevin, & Schauer, 2 6, p. Allbusiness. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.

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