The IASC comparability project: A cross-national comparison of financial reporting practices and IASC proposed rules

The International Accounting Standards Board (IASC) issued Exposure Draft 32 in 1989, which led to the revision of 10 international accounting standards (IASs), all of which substantially reduce the amount of choice available to companies when choosing which financial accounting practices to follow. This article assesses the extent to which the current financial reporting practices of 27 IASC member countries agree with the new international accounting standards. The results indicate that while the overall level of agreement with the revised standards is high, there are considerable differences both among issues and among countries. Companies in many countries will have to significantly change their accounting practices in certain areas if they are to comply with the new IASs. This is particularly true of companies in countries with code law-based legal systems and more conservative accounting practices. There is also generally less agreement over issues such as treatment of mergers, accounting for development costs, recognition of revenues on long-term contracts, treatment of differences due to the translation of the income statement at rates other than the closing rate, and changes in the costs of retirement benefits.