Chapter 7 Differences and the International Accounting Standards Harmonization

CHAPTER 7

DIFFERENCES AND THE INTERNATIONAL ACCOUNTING STANDARDS HARMONIZATION

International Accounting Harmonization

INTRODUCTION

Harmonization is a process to improve the compatibility (suitability) accounting practices by setting limits on how large these practices may vary. Harmonization of standards will be free of conflicts of logic and can improve the comparability (comparability) of financial information from different countries.

Efforts to harmonize accounting standards have been started long before the establishment of the International Accounting Standards Committee in 1973. More recently, a number of companies seeking to raise capital in markets outside the country of origin and the investors who seek to diversify their investments internationally face increasing problems as a result of national differences in terms of accounting disclosure and audit.

Sometimes people use the term harmonization and standardization as if both have the same meaning. However, contrary to the harmonization, standardization generally means the determination of a group of rigid rules and narrow and may even be the application of a single standard or rule in any situation. Standardization does not accommodate the differences between countries, and therefore more difficult to diimplemntasikan internationally. Harmonization is much more flexible and open, do not use one size fits all approach, but to accommodate some of the differences and have experienced great progress internationally in recent years.

DIFFERENCES BETWEEN HARMONIZATION AND STANDARDIZATION

Harmonization

·         The process to improve the compatibility (kesesuian) accounting practices to determine the limits of how much these practices may vary

·         Not using a one size fits all

·         But accommodates be some agreement and has experienced great progress internationally in recent years

·         Hamonisasi much more flexible and open
Standardization

·         Determination of a group of rigid rules and narrow

·         Application of a single standard or rule in any situation

·         Standards do not accommodate the differences between countries

More difficult for the international implementation include the harmonization of accounting harmonization.

1.      Accounting standards (which relates to the measurement and disclosure

2.      Disclosures made by public companies associated with the securities offering and listing on the stock exchange, and

3.       Auditing standards,

Advantages of international harmonization

1.      Languages
Those who use English as their mother may feel fortunate that English be the language that is widely used around the world.

2.      Harmonization of taxation's social security system
Profits. Businesses will experience great benefits cukuo in planning, systems and training costs, and so of harmonization.
Losses. Taxation and social security systems have a strong influence on economic efficiency. Different systems have different effects. The ability to compare how the different approaches in different countries led to the countries capable of increasing their respective systems. Countries competing and competition forced them to adopt an efficient system through the operation of such market power. Approval of the tax system would be like establishing a cartel and would eliminate the potential benefits of interstate competition.

A recent paper also supports the existence of a harmonized global GAAP. The benefits:

1.      Into global capital markets and investment capital can move across the world without hambaran means. High-quality financial reporting standards that are used consistently throughout the world will improve the efficiency of capital allocation.

2.      Investors can make better investment decisions, be more diverse portfolio and reduced financial risk

3.      companies can improve decision making strategies in the areas of mergers and acquisitions

4.      The best ideas arising from the creation of standards activities can be deployed in developing high-quality global standard.

v  Critics on the advice of the International

·         Determination of international standards is a very simple solution for complex problems

·          Some observers argue that the adoption of international accounting standards is essentially a tactic of the accounting firm that provides services to expand its market internationally akuntnasi.

·         Adoption of international standards will lead to an excessive standard.

Reconciliation on the mutual recognition.

 Two approaches are proposed as a possible solution is used to overcome the problems associated with cross-border financial report:

1.      Reconciliation

2.      Mutual recognition ( payoff / reciprocity )

Through reconciliation, foreign companies can set up LK using home country accounting standards, but should provide a reconciliation between the accounting measures that are important in the country of origin and in countries where financial statements in the report. Reconciliation lower cost when compared with the full financial statements based on different accounting principles. However, only present a summary reconciliation, and not the whole picture of the company.

Evaluation
The debate over harmonization may never be fully resolved. Several arguments against harmonizing contain some truth. However, growing evidence suggests that the goal of international harmonization of accounting, disclosure, and audit have been received so extensive that trend leading to the international harmonization will continue or even sooner.
National debate in the underlying factors that lead to differences in accounting, disclosure and audit practices increasingly narrow as the capital and product markets become increasingly international.

Application of international standards

International accounting standards used seagai result of

a)      an international agreement or a political

b)       Compliance is voluntary

c)      The decision by the national accounting standards-making body

The more the number of companies decided that the best interests of companies to use IFRS, although not required. Many countries have allowed firms to base their financial statements in IFRS and some states require.

If the applicable accounting standards through political procedures, laws or regulations, generally mandatory rules that drive this process. Interested parties to determine what the rules are and how these rules should be implemented.Efforts of other international standards in accounting is essentially voluntary. Standards that will diteima or not depends on the people who use the accounting standards. Current international standards and national standards are not the same, do not be a problem, but when the two standards differ, the standards should be the first referral nasional.

OVERVIEW OF INTERNATIONAL ORGANIZATIONS THAT PROMOTE MAJOR ACCOUNTING

HARMONIZATION
Six organizations have become a major player in the determination of the international accounting standards and in promoting international harmonization of accounting:

1.      International Accounting Standards Board (IASB)

2.      Komini European Union (EU)

3.      International Organization of the Capital Market Commission (IOSCO)

4.       International Federation of Accountants (IFAC)

5.      Intergovernmental Working Group of Experts on the United Nations International Standards of Accounting and Reporting, part of the United Nations Conference on trade and Development

6.      Accounting Standards working group within the Organization of Economic cooperation and Development.
International Forum on Accountancy Development (IFAD) held its first meeting in 1999. Its main goal is to build the capacity of accounting and auditing in developing countries.
Also important is the International Federation of Stock Exchanges (FIBV), a trade organization for securities and derivatives markets are organized around the world. FIBV encourage professional development of financial markets business. FIBV goal is to harmonize standards for menetapakan business processes (including financial reporting and disclosure) in cross-border securities trading, including cross-border public offerings.

INTERNATIONAL ACCOUNTING STANDARDS BOARDS ACCOUNTING

Objectives are:

1.      To develop in the public interest, a set of global accounting standards are of high quality, can dipamahi and can be applied which requires high-quality flow of information, transaparan, and can be compared in the financial statements and other financial reporting to help participants in capital markets and other users in making economic decisions.

2.      to encourage the use and application of these standards are strict stnadar

3.      to bring the convergence of national accounting standards and International Accounting Standards and International Financial Reporting Standards in the direction of high-quality solutions.
The core standards of IASC and IOSCO Agreement IASB has sought to develop accounting standards that will be received by the securities regulatory bodies around the world. IASC adopted a work plan for menghasilakn a set of core quality standards are comprehensive.

The new IASB structure In November 1999 the IASC Board unanimously approved a resolution supporting the proposed new structure that intinnya are:

1.      The IASC will be established as an independent organization

2.      The organization will consist of two main bodies, and the Council of Representatives, and the Permanent Committee on Interpretation and Standards Advisory Board

3.      and a representative will appoint board members, conduct surveillance and gather the necessary funds, while the council has responsibility for setting accounting standards
Restructured IASB met for the first time in April 2001. IASB has been reorganized, will include the following agencies:

1.      Guardian Agency. IASB has 19 carers :

·         6 from Nourth America

·         6 of the European

·         4 of the Asia Pacific

·         3 from other regions

2.      Council of IASB

Council to establish and improve standards of financial accounting and reporting efforts.
• Council consists of 14 members appointed by the Mayor to provide the best available combination of technical expertise and background of international business experience and relevant market conditions.

3.      Standards Advisory Council
Standards Advisory Council appointed by the representatives, consisting of:
• 30 or more members who have geographical and professional backgrounds are different, who are appointed to three-year renewable.

4.      International Financial Reporting Interpretation Committee (IFRIC)
• IFRIC comprises 12 members appointed by the trust. IFRIC interpret the application of international accounting standards and international financial reporting standards in the context of the basic framework of the IASB, published a draft interpretation and evaluate the comments above and obtain board approval for the final interpretation.
New Approach to EU and European Financial Integration
Commission announced that the EU needs to bergeraksecara precisely in order to provide a clear signal that companies are trying to do the recording in the U.S. and other world markets will still be able to survive in the EU accounting framework. EC also stressed that the EU strengthens kommimenya of international standard-setting process, which offers the most efficient and quick solutions to problems faced by companies operating on an international scale.
In 2000, the EC adopted a new financial reporting strategy. The interesting thing about this strategy is the proposed rule that all EU companies which tercata the regulated market, including banks, insurance companies and SME (small and medium sized enterprises), feeding the accounts in accordance with IFRS konsolodalis

International Accounting Standards

International Financial Reporting Standards (English: International Financial Reporting Standards (IFRS) is the standard basis, Understanding and Framework (1989) [1] which was adapted by the International Akukntansi Standards Board (English: International Accounting Standards Boards ( IASB )

 A number of standards established as part of IFRS are known by the name of the former International Accounting Standards (IAS). IAS issued between 1973 and 2001 by the International Accounting Standards Committee (English: International Accounting Standards Committee (IASC)). On 1 April 2001, the new IASB took over responsibility for preparing gunan of IASC International Accounting Standards. During the first meeting, the new agency is adapting IAS and SIC that already exist. IASB continues to develop standards and naming the new standards as IFRS.

Structure of IFRS

IFRS are considered as a standard set of "basic principles" which then sets the rules also dictate the implementation of agency_specific implementation.

International Financial Report Standards include :

·         Rules of the International Financial Report Standards (English: International Financial Reporting Standards (IFRS))-issued after 2001
 Rules of the International Accounting Standards (English: International Accounting Standards (IAS))-issued before 2001

·         Interpretation Committee interpretations derived from the International Financial Report (English: International Financial Reporting Interpretations Committee (IFRIC))-dikelularkan after 2001
 Standing Interpretations Committee (SIC)-issued before 2001§

·         Framework for the Preparation and Presentation of Financial Statements (1989) (English: Framework for the Preparation and Presentation of Financial Statements (1989))
In making the judgment described in paragraph 10, management shall refer to, and Consider the applicability of, the sources in descending order Following:

a)      the requirements and guidance in Standards and Interpretations dealing with similar and related issues; and

b)      the definitions, recognition criteria and measurement concepts for assets, liabilities, income and expenses in the Framework.

In making a decision as described in paragraph 10, management shall refer to, and will consider the possibility of applying, the following sources in descending order according to:

a)      the requirements and guidance in Standards and Interpretation in dealing with similar and related terms, and

b)      an explanation, recognition criteria and measurement concepts for assets, liabilities, revenues and expenses in the Framework.

Framework
Framework gunan Preparation and Presentation of Financial Statements [2] present the basic principles of IFRS

IASB and FASB frameworks currently in the process of renewal and perangkuman. Joint Conceptual Framework Project (English: The Joint Conceptual Framework project) [3] aims to update and tidy up the concepts that already exist to describe the changes in the market, business practices and economic environment that has arisen in the past two decades or more since the first concept was formed.

The overall objective is to create a foundation for future accounting standards are principles-based, internally consistent and internationally accepted. Because of this, the (council) IASB and the FASB in the United States carry out joint projects.

The role of framework Deloitte stated :

In the absence of a Standard or an Interpretation That specifically APPLIES to a transaction, management must use its judgment in developing an accounting policy and Applying That results in information That is relevant and reliable. That in making judgments, 8:11 IAS requires management to Consider the definitions, recognition criteria, and measurement concepts for assets, liabilities, income, and expenses in the Framework. This elevation of the importance of the Framework was added in the 2003 revisions to IAS 8.

Objective of financial statements.

A financial report must describe the true and fair view of the efforts of an organization. Because these reports are used by various parties, the report should describe the actual view of the state will finance an organization.

References:
www.wikipedia.com
http://wartawarga.gunadarma.ac.id/2011/05/harmonisasi-akuntansi-internasional-2/

PRO AND CONS OF INTERNATIONAL ACCOUNTING STANDARDS harmonization

Until the present time, western countries are still heavily promoting the need for harmonization of international accounting standards. The main purpose of these efforts is to improve the comparability (comparability) of financial reporting, especially for multinational companies operating in various parts of the world. Not surprisingly, the western side to form a body called the International Accounting Standards Committee (IASC), which has now changed its name to International Accounting Standard Board (IASB). The agency is in charge of producing international accounting standards (International Financial Reporting Standards-IFRS).

The main reason the presentation of financial statements that meet the standards for the survival of the company itself in the future, both in terms of internal and external users penguna. Public recognition will comprehensiveness and transparency of financial statements of a publicly-listed companies increase the pressure of the business sector to provide financial statements in accordance with the standards.

Other reasons to make it easier for investors who want to make their investment activities in other countries, which requires the financial statements of international standard in order to know the satte of the company.

 Although the IASB has no power to require all countries to prepare financial statements under International Financial Reporting Standards, to date the agency can be said to be very influential in the process of harmonization. This is not surprising because the capitalist countries, especially the United States played an important role in producing these standards. In other words, harmonization is the harmonization of international accounting standards are based on Anglo-Saxon accounting model, without notice and consider the system of accounting, environmental, economic, social and cultural rights of other countries (Hoarau 1995). Hoarau further said that the resulting standard is dominated by the accounting concepts practiced in the USA. In other words what is now American hegemonic efforts in the preparation of financial statements by the international accounting standards.

Although the IASB accounting standards resulting discuss the guidelines are less detailed and limited scope when compared with the USA version of the accounting standard (Statement of Financial Accounting Standards), IFRS remains based on the concept and the same accounting approach. As a result, the possibility of much conflict with the IFRS financial reporting purposes and the social environment, economy and culture of other countries, especially those that have different characteristics with the capitalist state. More specifically, the standards produced a lot of conflict with Islamic values. This is due to the economic concepts underlying the capitalist Western world accounting standard setting is much different from the concept of Islamic economics.

The resulting accounting standards of Anglo-Saxon model of accounting that recognizes adopts the time value of money, which produces the concept of interest. Meanwhile, Islam explicitly reject the use of the time value of money in carrying out economic activities. This is because the concept is synonymous with usury, and usury is clearly prohibited in Islam. Riba is prohibited in Islam because it shows the injustice of usury. Capra (1994) mentions that the injustice arises because the distribution of profits based on a fixed amount, can damage the price mechanism and led to the allocation of economic resources that lead to the accumulation of capital is concentrated in a particular group of people.

Prohibition against usury has its own implications for the harmonization of international accounting standards. So far the standards of internationally accepted accounting always consider the interest factor, which is clearly prohibited in Islam (Hamid et al., 1993). Examples of the resulting IASB accounting standards (IASC) is accounting for the lease / lease (IAS 17), Accounting for Pension Funds (IAS 19 and IAS 26), and Cost Accounting Capitalization of Borrowing (IAS 23). The standard is essentially the same as the accounting standards issued by the Financial Accounting Standards American Board (FASB), such as pension fund accounting standards (SFAS 87 and 88), Long-Term Debt Amortization (Accounting Principles Board, APB 12), Interest on Receivables and Payables (APB 21), Leasing (SFAS 12), Resturkturisasi Debt (SFAS 15), Reporting Debt Retirement (SFAS 88) and the repayment of debt (APB 26).
Another issue to consider is the issue relating to the valuation of the assets. In the Anglo-Saxon accounting, valuation of an asset, especially inventories and securities are generally based on the concept of conservatism. This concept recognizes income or loss or reduction of assets despite the decline has not been realized. In contrast, the concept is to delay recognition of revenues or increase in value of assets to income or an increase in the value of these assets are actually realized. The consequences of this concept is the use of the method of inventory valuation and short-term securities based on the lower of cost and market value (lower of cost or market). Meanwhile, for the purposes of calculating zakat, which is one of the purposes of reporting based on the teachings of Islam-Islam assess both types of assets are based on net realizable value or net realizable value (Gambling and Karim 1991). Thus it is clear that Islam does not recognize the concept of the lowest value between cost and market prices, such as those used in capitalist accounting.

The third problem is the application of the concept of sustainability (going concern). Use of this concept memungkinakn use historical cost valuation of assets based on the measurement to demonstrate objectivity. On the basis of historical cost, the value of assets on a particular date (the date of the balance sheet) will be equal to the value of assets on the date the asset was first acquired. The main reason the application of the concept of going concern are: (1) to allow for the classification of assets and liabilities into current and noncurrent group, (2) allows for the matching (matching) between revenue and costs.

From the standpoint of Islam, both of them may be questionable and irrelevant (Gambling and Karim 1991). In Islam, the classification of assets into current and noncurrent basically meant to determine the amount of wealth that will be used in determining the amount of zakat. Current assets are expected to be consumed, or sold to generate cash in the period of time in which the charity will be imposed on such property. While non-current assets, will remain detained or kept in the period beyond the period of zakat (Abdel-Magid 1981). On the basis of this, financial statements must be able to present information about the assets, which can be used as the basis for the imposition of zakat. Thus the zakat assessments will determine the method of valuation of assets.

Appropriate method to assess the assets relevant to the purposes of calculating the net realizable value is the alms or assessment methods suggested by Chambers (1966) that is continuously contemporary accounting (COCOA). On the basis of the method Cocoa assets should be assessed according to market value at balance sheet date. So each asset must be assessed individually, separate from the company's overall wealth. Consequently, in the context of Islam there is no recognition of assets such as goodwill, because goodwill can not see his form and shape can not be individually assessed separately from the company's overall value.
Another thing that is contrary to the teachings of Islam is the use of the concept of economic substance over legal form. Anglo-Saxon accounting model clearly separates the economic substance of a transaction with the legal status of the transaction. On the basis of this concept, if a transaction has economic substance of the terms of the criteria as an element of financial statements (because they meet the definition, can be measured and recognized in the financial statements), the transaction can be recognized in the financial statements even though not legally recognized. The classic example is a machine that was hired by the company through a capital lease contract. If the economic substance meets the criteria as an asset (as stipulated in the standard), then the machine can be recognized as leased property the tenant and reported on the balance sheet as a tenant property. However, from the juridical aspect of the machine remains the property owners rather than renters. This concept, clearly contrary to the concept of ownership in Islam (Karim 1995).

On the basis of different points of view above, it is quite reasonable to say that the accounting should be developed in accordance with the environmental conditions in which the accounting will be practiced. Accounting practices of the capitalist, obviously not everything can be practiced in an environment that Islam breath because the concept is clearly different and many are contradictory.

source:
http://docs.google.com/viewer?a=v&q=cache:skUCWwaA0wIJ:eprints.undip.ac.id/22807/1/SKRIPSI_MEGA.PDF+skripsi+ADOPSI+INTERNATIONAL+FINANCIAL+REPORT+STANDARD:&hl=id&gl=id&pid=bl&srcid=ADGEEShph2PZAKlXiRTLz_7d1xGjdZ_GtWPaieXRvnvWPv17oK5GZAtHDuUC-DuGQxhzzylHrJ24_d6kYzE6d-QGfA4JW_Dwhw6uoKUcp1O28KomvLjW4emCn7NupVz9iOR88-9zTFHY&sig=AHIEtbT3i1pBiKk_4E03uAH5pvrGWf88DA

http://staff.undip.ac.id/akuntansi/anis/2009/05/26/harmonisasi-standar-akuntansi-internasional-analisis-kritis-dari-perspektif-islam/

Reconciliation and mutual recognition (reciprocal) differences in accounting standards.

Two other approaches are proposed as a possible solution is used to solve problems related to the content of cross-border financial statements: (1) reconciliation, and (2) mutual recognition (which is also referred to as "imbalbalik" / reciprocity). Through reconciliation, foreign companies can set laporankeuangan using home country accounting standards, but should menyediakanrekonsiliasi between accounting measures (such as net income and stock ekuitaspemegang) in the country of origin and in countries where the financial statements dilaporkan.Sebagai example, the Capital Market Commission United States (SEC). Recognition occurs when the parties together outside the home country regulator of financial menerimalaporan foreign companies which are based on the principles of state asal.Sebagai example, the London Stock Exchange accept financial statements based on GAAP reporting ASuntuk made by foreign companies.

With line trading capital then hermonisasi be important to the problems associated with the content to the content of cross-border financial reporting.
Approach done by way of reconciliation and mutual recognition.
With a complete harmonization of financial reporting based on different principles.

Sources:
www.fileden.com / ... / overview% 20kuliah% 20akuntansi% 20internasional.ppt
http://www.scribd.com/doc/55239879/HARMONISASI

Promoter Organization of Harmonisation of International Accounting Standards

Harmonization in the International Accounting Standards, which made the organization into an international accounting standard setters.

Six organizations have become a major player in the determination of the international accounting standards and in promoting international harmonization of accounting:

1.      International Accounting Standards Board (IASB)

2.      Commission of the European Union (EU)

3.      International Organization of the Capital Market Commission (IOSCO

4.       International Federation of Accountants (IFAC)

5.      Intergovernmental Working Group of Experts on the United Nations International Standards of Accounting and Reporting (International Standards of Accounting and Reporting - Isar), part of the United Nations Conference in Trade and Development (United Nations Conference on Trade and Development - UNCTAD).

6.      Accounting Standards Working Group in the Organization of Economic Cooperation and Development (OECD Working Group).

INTERNATIONAL ACCOUNTING STANDARDS BOARD

International Accounting Standards Board (IASB), formerly the IASC, the standards-making body that is independent of the private sector which was founded in 1973 by professional accounting organizations in nine countries and restructured in 2001 (reorganization of the IASC to make in an umbrella organization that dibawahnyamengeluarkan 41 Standard International Accounting (IAS) and a Framework for the Preparation and Presentation of Financial Statements. objective the IASB are:

1.      To develop in the public interest, a set of global accounting standards are of high quality, understandable and can be applied which requires high quality information, transparent, and comparable in the financial statements and other financial reporting to help participants in capital markets and other users in making certain decisions.

2.      To encourage the use and application of these standards are ketat.IASB do his job). Before the restructuring, the IASC issued 41 International Accounting Standards (IAS) and a Framework for the Preparation and Presentation of Financial Statements. IASB objectives are:

a)      To develop in the public interest, a set of global accounting standards are of high quality, understandable and can be applied which requires high quality information, transparent, and comparable in the financial statements and other financial reporting to help participants in capital markets and other users in making certain decisions.

b)      To encourage the use and application of these standards are strict.

c)      To bring the convergence of national accounting standards and International Accounting Standards and International Financial Reporting Standards in the direction of high-quality solutions.

The core standards of IASC and IOSCO Agreement
IASB (and formerly IASC) has sought to develop accounting standards that will be received by the securities regulatory bodies around the world. IOSCO Technical his approval to the plan as follows:

Council (IASC) has developed a work plan approved by the Technical Committee which, if successfully completed will result in IAS comprising a comprehensive set of core standards. The completion of this comprehensive standard that is acceptable to the Technical Committee (IOSCO) allows approval of the Technical Committee for the use of IAS in the need to raise capital and cross-border listing of shares across global markets. IOSCO approved IAS 7, Statement of Cash Flows, and has given an indication to the IASC that 14 of the International Accounting Standards that exist now do not require additional improvements, provided that other standards are successfully completed.

Structure of the IASB's New IASB Council established a Working Group on Strategies (Strategy Working Party, SWP), which considers how should the strategy and structure of the IASC after completing the program of work of this standard. Which supports the proposed new structure that essentially are:

1)      The IASC will be established as an independent organization,

2)      the organization will consist of two main bodies, the Trust and the Council, and the Permanent Committee on Interpretation (now known as International Financial Reporting Interpretation Committee) and the Standards Advisory Council, and

3)      the trust will appoint board members, conduct surveillance and gather the necessary funds, while the board has sole responsibility for setting accounting standards. Restructured IASB met for the first time in April 2001.

IASB, after reorganization, will include the following entities.

1.      Guardian Agency. IASB has 19 trustee: six from North America, six from Europe, four from the Asia / Pacific, and three from other regions (depending on the determination of the overall geographical balance).

2.      Council IASB. Council to establish and improve standards of financial accounting and reporting efforts. Responsibilities include "meet the responsibility for all IASB technical issues including the preparation and publication of the International Accounting Standards, International Financial Reporting Standards and Draft Standards ... and final approval of the interpretations issued by the Financial Reporting Interpretation Committee", and approve project proposals and methods and procedures for developing standards. The goal is to build partnerships with national bodies because everything works together to achieve convergence of accounting standards around the world.

3.      Standards Advisory Council. Standards Advisory Board, appointed by the Trustees, consisting of "thirty or more members, who have professional backgrounds and different geographical, appointed for a three-year renewable"

4.       International Financial Reporting Interpretation Committee (IFRIC). IFRIC comprises 12 members appointed by the trust. IFRIC interpret "the application of International Accounting Standards and International Financial Reporting Standards in the context of the IASB Framework," issued a draft interpretation and evaluate the comments above and obtain board approval for the final interpretation.

Recognition and support for the IASB International Financial Reporting Standards have now widely accepted throughout the world. For example, the standards (1) is used by many countries as a basic national accounting terms, (2) is used as an international benchmark in most major industrial countries and emerging market countries to make his own standards, (3) is received by many stock exchanges and regulatory bodies that allow foreign or domestic companies to submit financial statements prepared under IFRS, and (4) is recognized by the European Commission and other supranational bodies.
References:
http://docs.google.com/viewer?a=v&q=cache:mXoZZHuFOygJ:pksm.mercubuana.ac.id/new/elearning/files_modul/32026-9-474219208394.doc+rekonsilisasi+dan+pengakuan+bersama+perbedaan+akuntansi+internasional&hl=id&gl=id&pid=bl&srcid=ADGEESiU_2lWXzKmFWYHpGE8O1jf1v37dd11gzH-0ENN47zrMd9Ejeyr4bw6VDOheHWH-bRc1W0yNAJ50IjwcwUSfcFDrmj5kncnax-2ALCiXbYS3iP_NPutBE2IROqF6iop3X62Ii56&sig=AHIEtbS-6Nnnh6y87YlO2RF0QksdSyaSSA&pli=1

New approach to the EU in the European Money Market Integration

Development Cooperation RI – EU

Development cooperation RI - The EU is one of the main pillars of bilateral relations between Indonesia - the EU. The development of relations between Indonesia - the EU is also reflected in the focus of development cooperation RI - EU that is recipient driven and tailored to the national development program of Indonesia.

The EU underlined the need to build a new relationship more closely with Indonesia through increased development cooperation program that supports the process of democracy, good governance, sustainable economic and social development and poverty erodes.
Good relations RI - is reflected in EU development cooperation set out in the Country Strategy Paper (CSP), which contains a joint strategy to support national development. CSP in 2002-2006 aimed to strengthen democracy and improve good governance through support to economic development, social and environmental.

CSP 2002-2006 National Indicative Programme set out in (NIP) which consists of two annual cooperation program. In the NIP 2005-2006, there are three priorities: education cooperation, law enforcement and security, economic cooperation in particular the management of public funding, with a value of 72 million Euro project.
As a follow-up to the end of the CSP program during the period 2002-2006, the EU has adopted the CSP program period of 2007-2013 which focuses on the education sector, trade and investment, as well as law enforcement and good governance. Komisoner EU Foreign Relations, Ms. Bennita Ferrero Waldner on May 15, 2007 had sent a letter to Foreign Affairs that the

European Commission has approved the preparation of the CSP 2007-2013 for Indonesia as well as the Multi-annual Indicative Programme 2007-2010.
In a statement, Ferrero stated that the European Commission will increase financial aid for development cooperation was 494 million Euro in the CSP program 2007-2013 and 248 million Euro in the Multi-annual Indicative Programme 2007-2010.

CSP 2007-2013 was signed on the visit of European Commission President Jose Manuel Barroso on 23 November 2007 in Jakarta.
The role and importance of Indonesia in the EU
The EU as a form of regional co-operation of Europe with 27 member states, the population of 499 million, GDP of 16.8 billion euros (28% of world GDP) has become a major force of economic and global politics. Currently the EU is the world's largest trading power which controls 20% of global import-export value.

EU member countries consist of Austria, Belgium, Rep. Ceska, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Cyprus, Slovakia, Slovenia, Spain, Sweden, Britain, Bulgaria and Romania.
For Indonesia, the EU is still an important market and one of the main sources of foreign investment in Indonesia. Bilateral trade in 2008 reached USD 28.20 billion and continues to show an increasing trend from year to year.

The EU is Indonesia's export market potential. The EU is the main markets for Indonesia's largest after the United States and Japan. Indonesia's exports to the EU in 2008 stood at 15.45 billion U.S. dollars, while imports from the EU Indonesia in 2008, stood at U.S. $ 10.5 billion U.S. dollars.

Development of bilateral relations between Indonesia and the EU are not apart of the dynamics of developments that occurred in the European Union (EU) and Indonesia. UE has succeed to as a solid regional grouping, continues to carry out consolidation through a process of integration in political and economic fields in order to achieve his ambition to unite all countries in Europe under the EU umbrella.

Similarly, Indonesia's democracy, a stable and recognized by the international community as an important partner in the region, both of which are important actors that continue approached each other to strengthen partnerships in order to be better able to respond to global challenges.

The linkage between the issues and interests of Indonesia and the EU have created a common agenda to strengthen the bilateral cooperative relations of mutual benefit.
EU considers Indonesia as a democratic state with the largest Muslim population in the world, potentially as a catalyst for regional security and stability. EU considers Indonesia has a strategic role for the maintenance of stability and security efforts in the region.
EU's attention to political developments in Indonesia is generally a matter of democracy, good governance and human rights. The EU is also paying attention to and support for Indonesia's efforts to combat terrorism and provide support to the development taking place in Indonesia.

On the other hand, Indonesia to see the EU as a global political and economic power that can be a partner to support the achievement of national interest. EU's increasing role in both global and regional context is the embodiment of one of its formation, which is to affirm the role of Europe in the world.EU's approach to multilateralism while maintaining Indonesia is an important partner in responding to global issues. In terms of external relations with Asia, in recent years the EU showed its ambitions to increase its political role in Southeast Asia by enhancing cooperation with ASEAN in order to create "an international order based on effective Multilateralism".
Indonesia is seen as a country that has a strategic role for the efforts to maintain stability and security in the region. EU relations with Indonesia have been established within the framework of EU cooperation - ASEAN, ARF and ASEM.

Change of leadership and more democratic reformers in Indonesia was welcomed by the EU because it is more an opportunity for the EU to conduct political dialogue with Indonesia.
EU's attention to political developments in Indonesia is generally a matter of democracy and human rights. In addition, with regard to the emergence of terrorism, the EU is also paying attention and support for Indonesia's efforts to combat terrorism.
Especially with regard to security issues and separatism in Aceh, Maluku and Papua, the attitude of the EU and its member states have expressed their support for the Republic of Indonesia and support the peace efforts through dialogues.

EUROPEAN UNION (EUROPEAN UNION - EU)

One goal is to achieve the integration of EU financial markets of Europe.
To achieve this goal, the EC has introduced a directive and take a huge initiative to achieve a single market for:

·         Acquisition of capital within the EU;

·         Creating a common legal framework for securities and derivatives markets are integrate

·         Achieve a single set of accounting standards for companies whose shares are listed.
Directive Fourth, Seventh and Eighth
Fourth EU directive, issued in 1978, is a set of accounting rules in the most extensive and comprehensive framework.

Seventh directive, issued in 1983, addresses issues consolidated financial statements.
Eighth Directive, issued in 1984, discussed various aspects of professional qualifications that are authorized to carry out the audit as required by law (mandatory audit).
Is the EU harmonization efforts have so far? Fourth and Seventh Directives have a dramatic effect on the financial reporting across the EU, namely bringing the accounting in all EU member States to stage a good uniformity and relatively adequate. This directive will harmonize the presentation of profit and loss (income statement) and balance sheet and increase the minimum additional information in the record, specifically the influence of tax rules on disclosure of the reported results. New Approach to EU and European Financial Market Integration Commission announced that the EU needs to move precisely in order to provide a clear signal that companies are trying to do the recording in the United States and other world markets will still be able to survive in the EU accounting framework. EC also stressed that the EU strengthens its commitment to the international standard-setting process, which offers the most efficient and quick solutions to problems faced by companies operating on an international scale.

In 2000, the EC adopted a new financial reporting strategy. The interesting thing about this strategy is the proposed rule that all EU companies listed in regulated markets, including banks, insurance companies and SME (small and medium sized enterprises), prepare accounts according to IFRS konsolidais.

References:
http://www.deplu.go.id/Pages/IFPDisplay.aspx?Name=RegionalCooperation&IDP=15&P=Regional&l=id