Principles of Finance · free preview
Companies in Domestic and Global Markets
Domestic, international, and global organizations differ in where they operate and whose accounting and securities laws govern them, with US domestic firms reporting under GAAP while most global parents report under IFRS, and the SEC's EDGAR system indexing the filings.
1. Why firms cross borders
Why firms cross borders
2. Domestic, international, and global
Domestic, international, and global
3. GAAP versus IFRS
GAAP versus IFRS
4. SEC reporting and EDGAR
SEC reporting and EDGAR
5. Classifying the firm
A US-based company earns most of its revenue abroad, keeps significant investments in a dozen countries, and consolidates foreign subsidiaries under several legal regimes. How is it best classified?
6. GAAP versus IFRS purpose
Which statement about GAAP and IFRS is most accurate?
7. Inventory method consequence
Why does the lesson's inventory example matter when comparing a US firm with a European rival?
8. EDGAR's role
What is EDGAR in the US financial reporting system?
9. Why transparency attracts capital
According to the lesson, why does the openness of the EDGAR system matter to US markets?
10. The international firm's reporting split
A US-based international firm has a German subsidiary. Which reporting pattern fits the lesson's description?
11. The domestic reporting standard
What four-letter abbreviation names the accounting principles under which US domestic companies report? Write the abbreviation.
12. The international standard
What four-letter abbreviation names the international reporting standards most global parent companies use? Write the abbreviation.
13. The filing system
What five-letter name, in uppercase, does the SEC's electronic filing system carry?
14. The hybrid inventory method
What four-letter acronym names the inventory method allowed under GAAP but forbidden under IFRS? Write the acronym.
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