Accounting Reporting Criteria
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Accounting Reporting Criteria
Introduction
In todays global market it’s essential that all businesses maintain accurate and accountable accounting practices. If businesses are in different parts of the globe, questions as to whether its accounting practices are compatible. Team B has chosen to view the account practices of two major car manufacturers; Ford which is based in the United States and Nissan, which is based in Japan. This paper will compare and contrast the accounting reporting criteria for each of these companies. The key elements of Ford and Nissan‘s accounting practices to be reviewed are regularly environment, issues with foreign currencies and differences in how GAAP is applied.
Regulatory Environment
Ford and Nissan face several regulatory issues that are similar and different. Ford has to comply with the requirements of Corporate Average Fuel Economy; this is the sales weighted average fuel economy, expressed in miles per gallon of a manufacturer's fleet of passenger cars or light trucks with a gross vehicle weight rating of 8,500 lbs or less (NHTSA, 2009). These vehicles are manufactured for sale in the US. The authorities to establish CAFÉ standards have been handed over to the Administrator of the National Highway Traffic Safety Administration. Also the financial reporting for both Ford and Nissan must meet the requirements of International Financial Reporting Standards if they want to do business in the European Countries (BERR, 2009). With regards to the regulatory environment both Ford and Nissan must adhere to the CO2 emissions regulations. Ford and Nissan must meet the Block Exemption Regulations in Europe. This regulation governs the competition rules in the EU. The companies must comply with the end of life vehicles regulations 2003 (BERR, 2009). Finally, in the US the automobile companies must meet with the requirements of the Sarbanes Oxley Act. The main offices of Nissan are located in Giriza, Tokyo. Nissan must comply with the Air Pollution Control Law...
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