Foreign Account Research Articles

Comparison of Domestic and Foreign Accounting Regulatory Systems from the Perspective of China

The purpose of this article is to compare the accounting supervision system of China and other countries, to reveal their characteristics, advantages and shortcomings, and to discuss how to use the international experience to improve China's accounting supervision system. This paper summarizes the basic framework of accounting supervision system at home and abroad. Through comparative analysis, it points out the deficiencies of our country's accounting supervision system and the advantages of foreign systems. In addition, the paper also discusses the common challenges facing the accounting supervision system at home and abroad. Based on the results of comparative analysis, this article puts forward countermeasures and suggestions to improve our accounting supervision system. Through these measures, the aim is to build a more efficient, transparent and adaptable accounting supervision system.

Reflection of interest and other expenses on loans and borrowings in accounting (financial) statements: recommendations of state and non-state regulators

The Ministry of Finance of the Russian Federation, as the state regulator of accounting, annually discloses new aspects of improving interest and other expenses related to borrowing in accounting (financial) reporting forms, including by issuing annual recommendations to auditors and audit organizations on verifying the reliability of annual reports. Despite the apparent simplicity of reflecting interest on borrowed funds — either for expenses of the current period or in the value of an investment asset, practitioners do not have fewer questions over time. The non-governmental accounting regulator “Accounting Methodological Center” also in its recommendations sets out its position on the reflection of interest and other expenses mainly in connection with newly emerging types of contractual relations for the presentation of borrowed funds. When conducting research, we used such methods as analysis and synthesis, comparison, grouping method, analogy method, logical approach, systematic approach. As a result of the conducted research, this article, in particular, presents generalized requirements for the formation of information on interest and other expenses related to borrowing, depending on the purpose of use and form of borrowing, as well as part of cash flows from current (operating), investment and financial activities of reporting organizations. In addition, in this paper, proposals are made to improve the accounting standard for reflecting the costs associated with borrowing. The results of this study will be of interest to a wide range of readers studying various problems of modern Russian and foreign accounting, and can also be used in the educational process of higher educational institutions.

The impact of digitalization of accounting and control of the activities of a financial intermediary on the potential of the enterprise

Introduction. Each enterprise has a certain set of resources: material, technical, financial, intellectual and informational. All these resources correspond to certain characteristics, physical and chemical properties, monetary value, etc. Knowledge of such specifics enables management staff to implement them effectively. However, even taking such specifics into account does not guarantee that the company will be competitive on the market. At the same time, the economic and political situation in the state and the world, regulatory acts, the inflation rate, the dynamics of scientific and technological progress, world trends, environmental and social factors significantly affect the business activity of the enterprise. The current war, which has been waged in Ukraine for more than 10 years, exhausts the national economy, disturbs society, creates new needs and guidelines, in particular: there is a rejection of export-import operations with Russia and Belarus, a reorientation of priority needs and production is carried out, there is a need for rapid reconstruction damaged infrastructure. Therefore, construction is one of the priority sectors of the Ukrainian economy. At the legislative level in Ukraine, the basic requirements and sequence of making payments through a financial intermediary are defined. In current practice, the most common methods of settlement are Joint Investment Institutes (CIIs) and the Construction Financing Fund (CFF). However, in our opinion, the procedure for keeping records and control over these methods needs to be improved both at the legislative level and at the level of changes in the company’s accounting policy in terms of documentation and digitization of accounting, economic control and analysis. Taking into account such details will make it possible to make the potential of the enterprise effective and bring it a larger amount of profit. The purpose of the study is to investigate the features of digitalization of accounting and control of the activities of financial intermediaries in the construction industry, to identify the advantages and disadvantages of this activity and to establish its impact on the potential of the enterprise. Methods (methodology). The article uses general scientific and specific methods, in particular, such as: induction and deduction - when researching software, analysis and synthesis - when identifying stages of control over the activities of financial intermediaries, comparison - for different ways of conducting financial transactions by financial intermediaries, tabular - for the formation of the Project of stages of control over financial resources in housing construction by a financial intermediary and their relationship with digitalization. The results. The economic potential of a construction enterprise grows thanks to effective accounting and control over the activity of a financial intermediary, and digitalization improves this process. From this, problematic aspects of the introduction of foreign accounting and analysis software products into the practical activities of construction enterprises and their adaptation are highlighted, which will make it possible to identify the weaknesses of this process and minimize them in practice. Our proposed Project of stages of control over financial resources in housing construction by a financial intermediary and their relationship with digitalization will make it possible to improve the system of control over the activities of a financial intermediary, reduce risks, and contribute to the timely commissioning of construction objects. Prospects. In further scientific research, it would be expedient to reveal in more detail the nature of the origin and mechanisms of interaction of various types of potential of the enterprise, in particular financial, labor, production, investment, innovation, organizational and management. It is also worth investigating in more detail a number of updated accounting, economic control and analysis software products that are most widely used in the world and identify their strengths and weaknesses, implementation prospects and obstacles.

Repair and maintenance of fixed assets

Federal Accounting Standard 26/2020 “Capital investments” has established rules for reflecting the cost of repairing fixed assets — if the repair is of a capital nature, the cost of it increases the cost of the repaired object, i.e. it is capitalized, and in the case when the repair is of a current nature or relates to the ongoing maintenance of fixed assets (when it is carried out with a frequency not exceeding 12 months), the costs of conducting them are not included in capital investments, but are written off as expenses of the current period. The non-governmental accounting regulator “Accounting Methodological Center” in its Recommendations sets out its position on the reflection of repair and maintenance costs. During the research, we used such methods as analysis and synthesis, comparison, grouping method, analogy method, logical approach, systematic approach. As a result of the conducted research, this article, in particular, presents additional proposals clarifying the wording of both the FSB 26/2020 and the Recommendations of the NBU BMC. In addition, in this paper, suggestions are made to improve the content of accounting statements. The results of this study will be of interest to a wide range of readers studying various problems of modern Russian and foreign accounting, and can also be used in the educational process of higher educational institutions.

Disclosure of information on cash flow in accounting (financial) statements

The Ministry of Finance of the Russian Federation, as the state regulator of accounting, annually discloses new aspects of improving the Cash Flow Statement included in the accounting (financial) statements, including by issuing annual recommendations to auditors and audit organizations on verifying the reliability of annual statements. Further recommendations were formulated for reporting for 2023. In the cash flows reflected in the cash flow statements, tax payment flows must be clearly separated, including separately cash flow for the payment of income tax and all other taxes, tax payment flows by the reporting company as a tax agent. Special requirements are established for the disclosure of information on rental payments from the tenant and the landlord. The non-governmental accounting regulator “Accounting Methodological Center” also in its Recommendations sets out its position on the reflection of cash flows for the payment of value added tax by the reporting organization. When conducting research, we used such methods as analysis and synthesis, comparison, grouping method, analogy method, logical approach, systematic approach. As a result of the conducted research, this article, in particular, presents generalized requirements for the formation of information on cash flows for current (operating), investment and financial activities of reporting organizations. In addition, in this paper, proposals are made to improve the accounting standard for the formation of cash flow statements. The results of this study will be of interest to a wide range of readers studying various problems of modern Russian and foreign accounting, and can also be used in the educational process of higher educational institutions.

Современные подходы к измерению финансового результата деятельности организации

The work is devoted to the formation of indicators of the financial performance of an organization and their use for analytical purposes. It examines methods for generating the Financial Results Report and analyzes approaches to the formation of profit indicators in Russian and foreign accounting practice (in accordance with Russian Accounting Standards and International Financial Reporting Standards). In addition, in the practical activities of analysts, additional indicators for assessing financial performance are widespread, which are also reflected in this article. As a result of the analysis, the authors concluded that indicators reflecting the financial results of organizations are incomparable. This fact makes a necessity to develop a single, unified system of profit indicators or analytical purposes.

Current issues in calculating the discount rate in Russian and foreign accounting

Thanks to the new Federal Accounting Standards (FAS), in Russian accounting it is increasingly necessary to determine the present value, which in turn is impossible without calculating the discount rate. The active use of the indicated value and rate is also expected in the IFRS system. At the same time, our research has shown that the calculation of the discount rate is associated with a number of complex issues in both Russian and foreign accounting. These questions are analyzed in this article. When carrying out research, methods such as analysis and synthesis, grouping method, comparison, analogy method, logical approach, systematic approach were used. As a result of the research, this paper presents the author’s view on current issues of calculating the discount rate in Russian and foreign accounting. The results obtained in this article will be useful to a wide range of readers interested in modern problems of Russian and international accounting. In addition, the results presented in this work can be used in the educational process of higher educational institutions, in the practical work of accounting departments, as well as in the development and improvement of relevant domestic and foreign regulatory documents on accounting.

Report on the financial results of public and commercial sector organizations: Preparation particularities and analytical capabilities

Subject. This article examines the particularities of the formation and analytical capabilities of a main form of accounting (financial) reporting, namely the Statement of Financial Results of public and commercial sector organizations, including the applicability of foreign standards, methods of economic analysis, etc. Objectives. The article aims to substantiate recommendations for the development of information and analytical capabilities of the Statement of Financial Results of public and commercial sector organizations based on a critical assessment of the positions of domestic researchers, analysis of Russian and foreign accounting and reporting standards. Methods. For the study, we used the methods of analysis, grouping, comparison and generalization. Results. Based on the review of the main approaches presented in the research of domestic authors on the stated topic, taking into account the provisions of Russian and foreign accounting standards and financial reporting, a comparison of the articles of the Statement of Financial Results and the procedure for their formation by public sector institutions and commercial organizations was carried out. The article presents the author-developed proposals to improve the analyticity of the Statement of Financial Results both for budgetary and autonomous institutions, and for commercial organizations. Conclusions. Differences in the requirements for the formation of information in the Statement of Financial Results contained in the regulatory enactments for the public and commercial sectors can be used to develop recommendations to improve the analytical nature of the information presented in it, ensuring the depth and accuracy of the results of economic analysis.

The Role of High-Skilled Foreign Accounting Labor in Shaping U.S. Startup Outcomes

The Role of High-Skilled Foreign Accounting Labor in Shaping U.S. Startup Outcomes

Critical analysis of the definitions of the category “valuation” in accounting and non-accounting sources

Valuation is undoubtedly the basis of accounting and reporting of any organization. At the same time, as our research have shown, to date, the accounting regulations do not provide a definition of the valuation, and in the scientific and educational literature there is no consensus of scientists on this issue. This article critically analyzes various points of view regarding the interpretation of the category “valuation”, presented in Russian and foreign accounting and non-accounting sources of recent decades. The following research methods were used: analysis and synthesis,comparison, grouping method, logical approach, systematic approach, analogy method. As a result of the research, this paper presents the author’s view of the existing definitions of the category “valuation” in relation to their applicability in modern accounting and reporting. The results reflected in this article will be of interest to a wide range of readers who analyze various problems of Russian and foreign accounting and reporting, including the valuation of accounting objects and reporting elements. In addition, the results obtained in this work can be applied in the educational process of higher educational institutions and in the practical work of accounting departments. In addition, the results of this study can be used in the development and improvement of relevant domestic and foreign regulatory documents on accounting and reporting.

The author’s view on the definition of the category “valuation” in accounting and reporting

Valuation is certainly the main content of modern accounting and reporting. At the same time, there is still no definition of this category in accounting standards. At the same time, various definitions of valuation are given in the scientific and educational literature. These definitions were critically analyzed by us in the previous article. In this article, we present our own view on the definition of the category “valuation” in accounting and reporting. During the research, such methods as analysis and synthesis, logical approach, systematic approach, comparison, grouping method, analogy method were used. As a result of the research, this paper presents a new view on the category of “valuation” in accounting and reporting, which meets the requirements of modern times. In addition, proposals are also made for amending accounting regulations. The results obtained in this article will be useful to a wide range of readers interested in various problems of Russian and foreign accounting and reporting, including the valuation of accounting objects and reporting elements. In addition, the results reflected in this paper can be used in the educational process of higher educational institutions and in the practical work of accounting departments. In addition, the results of our study can be used in the development and improvement of relevant domestic and foreign regulatory documents on accounting and reporting.

Has FATCA succeeded in reducing tax evasion through foreign accounts?

Abstract The Foreign Account Tax Compliance Act (FATCA) spurred an unprecedented increase in the IRS’s ability to obtain information about assets held and income earned by US persons in foreign financial accounts, which were especially prone to illegal tax evasion. We review the evidence on FATCA’s efficacy at reducing tax evasion through foreign accounts and provide additional, longer-term evidence. We then discuss potential avenues for avoiding FATCA reporting. We also highlight other consequences of FATCA and provide exploratory analyses pointing to the use of the United States as a tax haven for foreign investors. We conclude with policy recommendations and suggestions for future research in areas where more analysis is needed.

FINANCE REFLECTED BY FUNHOUSE MIRRORS

Money is money, securities are securities, and banking is banking. Their fundamentals are not changed by whether technology rails are centralized (classic) or pseudo-decentralized (virtual assets) – the song remains the same. As such, this paper does not reinvent the wheel on why we should regulate cryptoasset centralized exchanges (CEXs), as there is enough bibliography from today to the XVII century to go around on that. Instead, we focus on how to regulate the CEXs, which comes into play in a world where their distributed ledger technology (DLT) rails are off-the-grid and hinder regulators from: (i) collecting market data (information asymmetry); and (ii) practical enforcement (technology/operational asymmetry). After revising current regulatory practices from various countries, we identify grounds for a practical approach – we propose that regulators might enforce full trading/financial intermediation obligations on the CEXs by enacting an indirect regulation/gatekeeper scheme, as inspired by the U.S. Foreign Account Tax Compliance Act (FATCA). In this model, regulators would restrict traditional institutions (i.e., banks, broker-dealers, clearings, funds) from transacting with CEXs which do not provide adequate evidence of material compliance with their trading/financial intermediation obligations. On a final remark, we narrate a growing movement which aims to insulate non-compliant crypto from the financial systems altogether, avoiding risks of contagion.

The change in the useful life of an intangible asset: prospectively, retrospectively or otherwise?

Over the past more than a quarter of a century of active reform of Russian accounting in accordance with IFRS, half of this period there was no such thing as a “change in estimated values” in regulatory documents. In accordance with PBU 21/2008 “Changes in estimated values”, changes in estimated values are reflected in accounting and reporting prospectively. As practice shows, not only practitioners, but also some theorists do not always understand this perspective order unambiguously and correctly. In this article, the prospective procedure is considered by the example of changing the useful life of intangible assets. When conducting research, we used such methods as analysis and synthesis, comparison, grouping method, analogy method, logical approach, system approach. As a result of the conducted research, this article, in particular, presents various approaches to making changes to accounting and reporting in connection with the adoption of new accounting standards close to IFRS. In addition, in this paper, proposals are made to improve the accounting standard to reflect the consequences of changes in estimated values. The results of this study will be of interest to a wide range of readers studying various problems of modern Russian and foreign accounting and reporting, and can also be used in the educational process of higher educational institutions.

The Extent to Which Financial Institutions Comply With The US FATCA Law


 
 
 
 
 
 
 
 
 
 This scientific article explores the challenges and risks faced by Iraqi banks in complying with the Foreign Account Tax Compliance Act (FATCA). The study aims to investigate the extent of compliance in Iraqi banks and examine the general framework of FATCA through document analysis and interviews with bank officials. The results reveal that while Iraqi banks encounter various challenges in adhering to FATCA, they are actively taking significant steps to implement the necessary changes. The study highlights the need for continued monitoring of compliance efforts and emphasizes the importance of adapting to the global banking system. The implications of this research underscore the crucial role of FATCA in preventing tax evasion and ensuring tax compliance among US taxpayers utilizing non-US financial institutions and investment vehicles abroad. This research contributes valuable insights for professionals in the field, policymakers, and researchers interested in understanding the impact of FATCA on the banking sector and its implications for global financial regulations.
 Highlights : 
 
 Challenges and risks faced by Iraqi banks in complying with FATCA.
 Active steps taken by Iraqi banks to implement necessary changes for FATCA compliance.
 Implications for preventing tax evasion and ensuring tax compliance in the global financial landscape.
 
 Keywords : FATCA Compliance, Iraqi Banks, Tax Evasion, Global Banking System, Financial Regulations
 
 
 
 
 
 
 
 
 
 

Counteracting offshore tax evasion: Evidence from the foreign account tax compliance act

This paper aims to investigate the effect of the Foreign Account Tax Compliance Act (FATCA) on the deposits held by US global banks through their branches located around the world. Using an unpublished dataset on deposits held by branches of US banks on a geographically unconsolidated basis, we find that the FATCA led to a reduction in deposits held in branches located in tax havens. We find that this effect is more severe in those jurisdictions signing a reciprocal exchange of information agreement. We also advance evidence in support of deposit shifting within the US banking system towards locations without a reciprocal intergovernmental agreement.

Foreign exchange trading and management with the stochastic dual dynamic programming method

We present a novel tool for generating speculative and hedging foreign exchange (FX) trading policies. Our solution provides a schedule that determines trades in each rebalancing period based on future currency prices, net foreign account positions, and incoming (outgoing) flows from business operations. To obtain such policies, we construct a multistage stochastic programming (MSP) model and solve it using the stochastic dual dynamic programming (SDDP) numerical method, which specializes in solving high-dimensional MSP models. We construct our methodology within an open-source SDDP package, avoiding implementing the method from scratch. To measure the performance of our policies, we model FX prices as a mean-reverting stochastic process with random events that incorporate stochastic trends. We calibrate this price model on seven currency pairs, demonstrating that our trading policies not only outperform the benchmarks for each currency, but may also be close to ex-post optimal solutions. We also show how the tool can be used to generate more or less conservative strategies by adjusting the risk tolerance, and how it can be used in a variety of contexts and time scales, ranging from intraday speculative trading to monthly hedging for business operations. Finally, we examine the impact of increasing trade policy uncertainty (TPU) levels on our findings. Our findings show that the volatility of currencies from emerging economies rises in comparison to currencies from developed markets. We discover that an increase in the TPU level has no effect on the average profit obtained by our method. However, the risk exposure of the policies increases (decreases) for the group of currencies from emerging (developed) markets.

Improving the system of measurement objects in Russian accounting and reporting

Currently, the process of reforming Russian accounting and reporting (including healthcare organizations) is going very actively. Every year, the Ministry of Finance of the Russian Federation approves new Federal Standards (FAS) and amends existing accounting regulations. At the same time, the system of accounting objects and elements of financial statements is also subject to significant adjustments. In turn, the basis of accounting and reporting is measurement. In this regard, the above objects and elements can, in our opinion, be called measurement objects in accounting and reporting.Improving the system of these objects, including in view of the ongoing changes in Russian accounting and reporting, is analyzed in this article. As research methods, a systematic approach, a logical approach, analysis and synthesis, the method of analogies, comparison, and the grouping method were used. As a result of the research, this article presents proposals for improving the system of measurement objects in accounting and reporting (including healthcare organizations). The results reflected in this work can be used in the practical work of the accounting departments of modern organizations, in the educational process of higher educational institutions and in the development and reform of relevant regulatory documents on accounting and reporting. In addition, the results presented in this article will be useful to a wide range of readers interested in current issues of Russian and foreign accounting and reporting (including healthcare organizations).

Space heating preferences in households: Nested logit model approach in Turkey

Turkish economy with its robust growth performance over the last few decades has brought on the agenda the energy deficit problem together with ever-rising foreign account deficits. Since almost 80% of the energy demand is met through imported fossil resources. In this perspective, household fuel choice is crucial, since it makes up a substantial part of total energy demand. Furthermore, traditional fuels are important sources of indoor air pollution and related health hazards. For this reason, in this study the cross-sectional data obtained from the Household Budget Survey conducted by the Turkish Statistical Institute, containing a total of 47,573 households, is used. Multinomial Probit and Nested Logit models are utilized to determine the factors affecting Turkish household heating preferences. According to estimations, dwelling characteristics such as type, age, size and heating system of dwellings are generally found to be an important predictors of fuel choice. Moreover, household characteristics, such as income, education level, spending and saving habits, household size, employment status, marital status, and credit card ownership are generally found to be statistically significant factors. Finally, it is suggested that government support is important for a smooth transition from traditional fuels to modern fuels.

FATCA, CRS and Public BO registers: a report on the direction of travel—the next 12 months

Abstract The author represents a number of clients in ongoing litigation against the excessive nature of public registers of beneficial ownership, the US Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS). Cases are pending before the courts in Austria, Germany, Luxembourg and the UK. The question relating to the compatibility of public registers of beneficial ownership with individuals’ fundamental rights to privacy and data protection is currently before the Court of Justice of the European Union (CJEU). The European Union’s Advocate General has already issued his opinion and a judgment is expected in the coming months.