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The current state of accounting harmonization: impediments to and benefits from harmonization

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  • V. VANSTEEGER

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Abstract

Although the EU has made progress towards harmonization of accounting law, this cannot hide the fact that the harmonization of the financial accounting information across Europe, through the accounting directives did not reach the intended level of comparability and transparency. Through the adoption of IFRS a higher level of harmonization has been pursued. Up to the present, the implementation of IFRS in many European countries is only required for the consolidated statement of listed companies. To this day, numerous studies have focused on harmonization and convergence of financial accounting information in Europe, addressing impediments to convergence and providing the level of adoption of IFRS in the consolidated statements of listed European companies. However, less attention has been paid to the impact of implementing IFRS in the consolidated accounts of listed companies on the statutory accounting of listed and non-listed companies. In this paper, the pros and cons of complete harmonization, i.e. the implementation of IFRS for the statutory accounts is discussed. In the last part, an illustrative case study compares the position taken by the IASB and the related treatments in Belgian GAAP and the fourth directive. Whether national GAAP is to converge towards IFRS, or IFRS will become mandatory for statutory accounts, it is important to highlight the particular differences between both sets of standards. Although we worked on a spot basis, as we only have treated the differences concerning tangible and intangible assets, this gives a good example of the particular harmonization difficulties most European countries will have to cope with.

Suggested Citation

  • V. Vansteeger, 2005. "The current state of accounting harmonization: impediments to and benefits from harmonization," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/322, Ghent University, Faculty of Economics and Business Administration.
  • Handle: RePEc:rug:rugwps:05/322
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    File URL: http://wps-feb.ugent.be/Papers/wp_05_322.pdf
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    1. W. Bruggeman & P. Everaert & S. R. Anderson & Y. Levant, 2005. "Modeling Logistics Costs using Time-Driven ABC: A Case in a Distribution Company," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/332, Ghent University, Faculty of Economics and Business Administration.
    2. P. Windels & J. Christiaens, 2005. "Management Reform in Flemish Local Authorities: Testing the Institutional Framework," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/331, Ghent University, Faculty of Economics and Business Administration.
    3. Maarten Dossche & Gerdie Everaert, 2005. "Measuring Inflation Persistence: A Structural Time Series Approach," Computing in Economics and Finance 2005 459, Society for Computational Economics.
    4. M. Vanhoucke & B. Maenhout, 2005. "Characterisation and Generation of Nurse Scheduling Problem Instances," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/339, Ghent University, Faculty of Economics and Business Administration.
    5. Jan Lepoutre & Nikolay Dentchev & Aimé Heene, 2007. "Dealing With Uncertainties When Governing CSR Policies," Journal of Business Ethics, Springer, vol. 73(4), pages 391-408, July.
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    7. A. Karas & K. Schoors, 2005. "Heracles or Sisyphus? Finding, cleaning and reconstructing a database of Russian banks," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/327, Ghent University, Faculty of Economics and Business Administration.
    8. N. Geeroms & P. Van Kenhove & W. Verbeke, 2005. "Health Advertising to promote Fruit and Vegetable Intake: Application of need-related Health Audience Segmentation," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/336, Ghent University, Faculty of Economics and Business Administration.
    9. B. Maenhout & M. Vanhoucke, 2005. "New Computational Results for the Nurse Scheduling Problem: A Scatter Search Algorithm," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/341, Ghent University, Faculty of Economics and Business Administration.
    10. J. Albrecht & M. Neyt & T. Verbeke, 2005. "Bureaucratisation and the growth of health care expenditures in Europe," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/335, Ghent University, Faculty of Economics and Business Administration.
    11. L. Pozzi, 2005. "Income Uncertainty and Aggregate Consumption," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/334, Ghent University, Faculty of Economics and Business Administration.
    12. W. Buckinx & D. Van Den Poel, 2005. "Assessing and exploiting the profit function by modeling the net impact of targeted marketing," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/330, Ghent University, Faculty of Economics and Business Administration.
    13. E. Labro & M. Vanhoucke, 2005. "A simulation analysis of interactions between errors in costing system design," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/333, Ghent University, Faculty of Economics and Business Administration.

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    Keywords

    harmonization; IFRS; SME; tangibles; intangibles; fiscal neutrality;

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