The Hmong New Year

`The Hmong New Year is a cultural celebration that occurs annually, in the months of November and December, in areas where large Hmong population exists. In this speech, I am going to share the three main components that make up the celebration of Hmong New Year, such as the culture of the food, tradition clothes, and the activities that are involved. I. There are several activities that are involved at Hmong New Years. A. The game of love â€Å"Pov pob,† or ball toss, involves lines or groups of men and women tossing a ball. 1. The ball is thrown so that the other player can catch it with one hand.If the throw is good and the other player drops or misses the ball, an ornament or a piece of silver or a belt from his or her costume is given to the opposite player in the pair. Ornaments are recovered by singing traditional courting songs to the opposite player. 2. Girls can toss the ball with other girls or boys, but boys cannot toss the ball with boys. It is also taboo to toss the ball to someone of the same clan. Through playing this game, the youngsters get to know each other, forming relationships that may eventually lead to marriage. a. According to Liz Price who wrote the article call The Hmong Game of Love on the webpage thestar. om, she stated, â€Å"Throw the ball and catch a husband. If you see a boy you like, toss the ball to him and hope he returns it. But if you don’t like your potential partner, then drop the ball he throws you. † The next activity is†¦ B. The beauty contest is held every at Hmong New Year. This contest offers young ladies a chance to show off their talent and skills to the whole community. 1. The rules for the contest are that you cannot be married and if you win first place you will be â€Å"Miss Hmong† for one whole year until the next â€Å"Miss Hmong† is chosen. The contest usually runs for three days and is held during the New Year celebration.C. There are also sports tournaments involvi ng soccer, volleyball and kato for men and women. 1. Kato is played by using your feet, body, and head. One of the rules is you were not allowed to use your hands. The winning team gets first prized with a $500 reward. 2. Soccer is a big tournament that takes place during Hmong New Year. Soccer is given the top highest prize money for the winning team. First place gets five thousand dollars. 3. Unlike Soccer and Kato, both male and females play volleyball. Prices are given as well. The winning teams both males and females get five hundred dollars as their winning prize. D.There is the talent show. 1. The talent show consist of multiple groups and sometimes individual performing some kind of traditional performance. a. One of the performances consists a group of girls performing a tradition dance. c. The Hmong flute is called Sao ‘Raj'; it is another intricate part of the talent show. The Sao is a vertical flute pierced with finger holes. The Hmong Sao is a single flute with ha rd and colorful timber; the sound it produces is harsh and sweet. When the Sao flute is being played on stage, the music captures the hearts of the audience and the hearts of young girls. Moving on to the second component†¦..II. The tradition Hmong clothes. A. Hmong New years is presented with many traditional Hmong clothes that consists of bright colors and Hmong jewelries. The dabtshos (pronounced da chaw) is a decorative panel worn in the back of a Hmong woman's traditional blouse. It is a required part of the woman's traditional clothing. If a woman does not wear her dabtshos at New Years, other people would think it’s very strange. The needlework on the dabtshos is used as a way for a young woman to attract a husband. If she is wearing a beautifully decorated panel that shows off her mother's sewing skills, many boys will want to be her artner in the ball toss. B. There is also coins involving in the costume. From my understanding, the coins show that you are rich o r not. The more coins you have on your clothes, the more you are successful. C. A tradition hat is also worn. All the tradition clothes are all hand-made and stitched in multiple patterns. The last component is†¦ III. The food that is offered at Hmong New Years. A. After a long day of enjoying the sports and activities, people go to the booth where they sell different varieties of food, such as bbq pork and chicken. These foods are served with a plate of rice and peppers.Hmong sausage is one of the popular plates within the variety of food. It has a distinct taste of ginger and pepper made with pork. B. Another popular plate is papaya salad. It’s basically made with papaya fruit, tomatoes, lime juice, pepper, and tamarind juice. C. Lastly, there are also multiple fruit drinks and snacks. a. According to Jeff Lindsay on his website webpages. csus. edu, he said that he had talked to many people of different races about this event and many loves it. They agree that it's a o ne of a kind celebration because it brings the community together in various ways and really show what the Hmong culture is about.Conclusion: When people go to any HNY event held around the world they can expect to see a variety of colorful Hmong tradition dresses, expect to enjoy different Hmong traditional foods, and expect to be entertain with traditional Hmong dances, music, pageant, and more. Also, there are activities and games that anyone can participate in, such as the traditional ball toss game. The Hmong people originated in central Asia, and now live spread throughout China, Tibet, Laos and Vietnam. Many Laotian Hmong fought for the United States during the Vietnam war, after which they took refuge in California, Wisconsin and Minnesota.Traditionally, Hmong communities celebrate the new year at the end of the harvest, staggering these dates from August to December to allow communities to enjoy each other's festivities. New year activities vary from community to community and reflect regional influences The only major holiday celebrated by the Hmong each year is the New Year's celebration timed to fall during the full moon at the end of the twelfth lunar calendar month usually around November. In Laos it falls after the rice harvest and also marks the beginning of the r New Yea

As I Walked Out One Evening †W.H.Auden Essay

The poem in study is As I Walked out One Evening by W.H. Auden. His views projected in this poem are suggested to have not varied since the time he composed this piece. Unlike his other poems, this piece was never revised. Here, Auden exposes the two sides of romance through the manipulation of narrative voices, the poet, the lover’s song and the chiming of the clock personified. As I walked out one evening is composed in a traditional ballad form. It’s consists of 15 quatrain stanzas conforming to an â€Å"abcb† rhyme scheme. The masculine end rhyme employed gives more freedom of wording. It is through these settings that exhibits the song-like quality of a ballad and by this lyrical tune, Auden suggests the theme and theories examined in the poem are of childlike logic and knowledge. With reference to the structure of the poem, it comprises of 15 stanzas split into three distinctive voices. The first and last being the narration by the poet himself, framing the Lover’s Song and the menacing voice of the clock. Through the beginning narration by the persona, W.H. Auden sets the essence of nostalgia with a â€Å"walk down Bristol Street†. The mention of Bristol Street creates the tone of reminiscence as it is a venue of Auden’s childhood. The contrast of â€Å"crowds upon the pavement† that use to be â€Å"fields of harvest wheat† showcases the change taken place during time-lapse. Down by the brimming river, the poet hears a lover sing â€Å"love has no ending†. The transition of narrative position from the initial persona to the Love Song takes place through the marking of inverted commas. The rhythm of the poem also changes away from iambic tri-meter when the love song begins. The love song is hyperbolized, injected with imageries and unconventional similes to exaggerate the affections of a naà ¯ve lover. With suggestions of the uncanny ability to love â€Å"till China and Africa meet†, Auden captures their simplistic and unrealistic minds. The silly and lighthearted tone shown through the alliteration of the line â€Å"salmon sing in the street†. In addition to undermining the forces of nature, the lover’s song seem to believe its love to be pure and immune to time, for â€Å"in my arms I hold The  Flower of the Ages, And the first love of the world†. This love is expressed to be ageless, the Flower of the Ages a Biblical reference to the year of maturity in which a woman can marry. In a sense, the song provokes that the incredibility of love is beyond human entity, but of something greater. However, the tone shifts in the 6th stanza, turning to the narration of the clock and time personified. They seem to be rebuking the ideals embodied by the Lover’s Song as they began to â€Å"whirr and chime†, an onomatopoeia that creates the image of violent and unsettling wind. The wind that could break them apart, hit their faces with a chill. The clock conveys the negative perception of naà ¯ve love as it rings out a series of advice to the lovers. The Clock’s advice is like a progression of a 4 session counselling, speaking to us readers as if we are the young lovers. Marked by the phrase â€Å"O†, he begins with a gentle coaxing. â€Å"O let not time deceive you†, the idealism borne by the love song shall break through time’s passing. â€Å"O plunge your hands in the water† as if washing one’s face in the morning. Wake up from the hyperbolized world of love to reality. â€Å"Stare, stare at the basin,† reflect on your past actions and their indications, what you’ve missed. â€Å"O look, look in the mirror† examine your present self. Finally â€Å"O stand, stand at the window†, see your partner through the barrier of glass. Unclouded and unaffected by cruel words of a quarrel, in the peace of one’s own mind, then we shall see that we are all hypocrites in love. The overall tone of the clock is quite dark and Auden uses the technique of contrasting metaphors to develop the negative effects of time in idealism. The â€Å"green valley† and â€Å"appalling snow† signifying the presence of time will eventually break momentary joy. â€Å"The glacier knocks in the cupboard, the desert sighs in the bed†, the consequences of time will invade one’s privacy and comfort, perhaps even home. Until it becomes overwhelming, one should break down, it’ll â€Å"open a lane to the land of the dead† where qualities of life we once known are twisted into a paradoxical world embodied by stanza 12. There is however, a consolation to these negative aspects, that if we â€Å"wake  up† in time, we shall learn to love truly, for life remains a blessing, even when we’re too focused on our distress. Throughout this entire process, the language suggests the lack of presence of the first persona. But this theory is contradicted by the last stanza where the â€Å"poet† narrates. â€Å"It was late, late in the evening†, the repetition a habit picked up from the clock’s speech. The persona was watching the whole time, now knows better, that the overflowing love of the â€Å"brimming river†, actually has a lot more depth. W.H. Auden through the shift of narrative voices explores the different perspective of love. This technique shows us not only one sided opinions but various views. And readers are shown, that perhaps what is right in the minds of one, may vary to the eyes of another. The image of romance is often twisted to extremes by society. As human beings, we have the tendency to form opinions based on our own favours. To an extent, this poem may resemble a satire to society. Humans tend to be hypocrites and very good liars to even our own minds to justify our wrongdoings.

Antivirus Is Protective Software Computer Science Essay

Antivirus Is Protective Software Computer Science Essay Antivirus is protective software designed for protecting your computers system & smart cell phones against Virus, Trojans & Hijackers etc. These all Viruses, Trojans & Win32 etc are called Malicious Software in computer world. All Antivirus software run in the background at all times to protect & defense your computers system & smart cell phones & some antivirus are automatically updated through internet & some antivirus are needs manual updated through internet to protect your systems against Malicious software. Introduction: Antivirus software provides an many essential layer for multitude of the Virus, win32, Trojans & worm etc. The first document removal of the computer viruses was written by â€Å"Bernd Fix†. There are two types antivirus application in the computer world so that the time of the â€Å"Atari ST† platform designed in ‘1987’ & the first one was â€Å"G Data† & second was â€Å"UVK 2000† made by â€Å"Bernd Fix† in â €˜1987’.The word ‘Antivirus’ is come from the word â€Å"Antibiotic† which means implies combat with an invading force of the programs. â€Å"Fred Cohen† designed the strategies relative to an Antivirus software & program in ‘1988’ to solve the virus problems. The old & previews years Antivirus software are not so good because those software only detected the Virus & Spyware etc & remove it from your computers system & damage your some operating system files inside your computers & now AntiVirus software much better than old ones because it detected the virus & remove it without deleting your operating system files inside your computers & it also fight against new malicious software which come from internet network. Well in the preview years Antivirus software are not completely free downloadable on the internet means you could only find some antivirus software with trial version & now Antivirus software are completely free download without trial version . New Antivirus also checked the incoming & outgoing mail, email attachments etc. It also have internet security for internet threats. Advantages and Disadvantages: Antivirus software is very useful in the preventing, controlling, virus & many more viruses program, which can damage the computers components from inside & operating system files to. Antivirus software are used for the methodologies for searching killing Viruses& some of the well knows patterns of computer data & programs. Antivirus programs are very effective against the viruses program, whose is the biggest threat for your computer systems. Antivirus program has some limitations & drawbacks on the other hand, which effect on the computer system performance. In the computer world, inexperienced users can have many problems with the antivirus programs or software such as inabilities to understand, threats of the software & success of the antivirus programs & software are dependent on the ability of the user to understand Or knowing the right kind of balance between the positives & negatives things in the computer world. Antivirus software or programs can cause problems during the installation window in the computer system or upgrade the Windows Service packs in the computer system. Antivirus software can be hampered some few software programs because it used it own firewall to block application to store in the computer system. e.g. True Crypt. Some Antivirus program will not knowing by the policy assessment before make it own policy when it install in the computer system.

Petroleum Engineering Essay Example | Topics and Well Written Essays - 1000 words

Petroleum Engineering - Essay Example In simple terms, the task of engineers is to provide a link between ideas and physical reality (Lyons& Gary 12). Petroleum falls in the category of minerals used by people or humanity for many years. For a couple of decades ago, people used materials or minerals where they referred to them by different names such as oil from rocks, shining water, and sweat of devil. Some of the names have been in place for several years such as naphtha and petros (Lyons& Gary 17). In Greek, Petros stands for rock while in Roman it means oil or petroleum. For many years, surface springs and tar pits have been the only source of oil or petroleum. However, this argument has not been reliable because most people look for petrol beneath the earth’s surface. For instance, during 1859, Drake Edwin struck oil after drilling 69 feet (Lyons& Gary 22). On August 27, the year 1859, United States of America marked the origin of Petroleum and Oil industry (Lyons& Gary 24). Despite the fact that few people h ad participated in commercial sale of oil, Drake was instrumental in proving that production of oil could occur in large scale. Analysis of crude oil shows that the composition of crude oil takes has carbon, hydrogen, oxygen, nitrogen, and sulphur. Carbon and hydrogen forms a big percentage in terms of composition of crude oil than nitrogen and oxygen. In terms of products, crude oil has the following products: hydrocarbon gas, petroleum ether, gasoline, kerosene, light gas, heavy gas and reside. All these products have different uses. For example, hydrocarbon gas finds its use as a natural gas while petroleum ether is a cleaner or solvent (Lyons& Gary 32). Petroleum occurs in rocks that are of three types, namely sedimentary, metamorphic, and igneous rocks. The classification is these rocks are according to origin as shown below. Igneous rocks originate from cooling and solidification process of magma in molten state. Magna results from the interior of the earth following eruption process. These rocks form almost 95% of the earth’s crust. They have a crystalline and hard structure with voids or pore spaces. This category of rocks consists of basalt, granite, serpentines, and andesite (Lyons& Gary 34). Sedimentary rocks forms the second classification of rocks used to produce petroleum. These rocks emanate from deposition of both inorganic and organic matter. Deposition of animal and plant fossils alongside igneous rock occurs in layers or strata. Sedimentary rocks fall further into three types, namely chemical, organic, and clastic sediments. Formation of clastic sediments is through deposition after a series of breakdown and transport. Clastic sediments mostly include breccias, sandstone, sands, gravels, siltstone, and marble. The second type of sedimentary rock is the chemical sediment that has mineral salts such as sulfate and chlorides. Lastly, the formation of organic sediments is through compaction process by wind, ice, snow, or rain (Lyons& Gary 39). Metamorphic rocks forms the last category of rocks that results from tectonic process in an environment that has elevated temperature and pressure. This environment changes the structure and composition of sedimentary and igneous rocks to form metamorphic rocks. These types include shales, marble, and quartzites (Lyons& Gary 40). Two groups of theories explain the actual occurrence

In what ways can 'childhood' and 'youth' be understood as social Essay

In what ways can 'childhood' and 'youth' be understood as social constructions - Essay Example The objective of this essay is to identify the different ways childhood and youth is because of social construction. The essay will mainly use Kehily’s book understanding youths. Kehily is one of the most popular sociologists in the world today. She has researched on many issues relating to childhood, youths, gender and sexuality. In the book Understanding Youths, she has used history and sociocultural approaches to prove that childhood is a social construction. The use of history and sociocultural approaches is important in her book since in part one, she talks about perspective. She has used past researches by other sociologists in trying to show the changes that childhood has undergone based on the time period, culture and the economic activities during the time stated. She has used Aries findings that in the 15th century, children even at the age of 5 years were free to do anything that the adults were doing (Classen, 2005, p. 171). This changed in the 16th century, where children were for economic purposes since they could work to boost the family’s income. During the industrial revolution, childhood changed since the law against child labor was introduced thus children suffered from separation with their parents. In 1950, childhood took another twist and it was the beginning of children being very dependent on their parents (Veerman, 1992, p. 58). The second part of Kehily’s book is self-identity; she has based her argument on the historical findings that childhood is different due to the social status (Kehily, 2007, p. 19). She claims that in the West; whose occupants were wealthy spoilt their children, this is different with the Western region where childhood had no meaning since their parents were poor thus they had to work. The third part of the book covers the activities and that the youths engage in thus gaining experience. She states that

A policy brief Essay Example | Topics and Well Written Essays - 250 words

A policy brief - Essay Example The company has implemented initiatives aimed at conserving environmental policy by reducing waste. The petroleum industry has been under scrutiny by the international community for its contribution to the emission of greenhouse gases. Petroleum products are also non-renewable hence the exploitation of these products could lead to the depletion of resources for future generations. A major environmental risk posed by the company is oil spills into the ocean which results in water pollution and suffocation of sea life. During the fractionation process to manufacture petroleum products, some of the byproducts of the process that are released into the environment such as sulphides and carbon dioxide contribute to the greenhouse effect. The company should develop methods of reducing emission of these wastes into the environment by exploring alternative waste management methods. The implementation of green energy in a petroleum industry can be quite an expensive venture. To mitigate losses due to the increase cost of manufacture of petroleum products would have a direct impact on the price of petroleum products. The company should revise its policies to include reducing the emission of greenhouse gases such as carbon dioxide and chlorofluorocarbon which contribute to the greenhouse effect. They should also consider integrating the use of natural sources of energy such as solar, wind and tides to reduce their reliance on electricity and promote biodiversity. Further, the company should educate its workers on the need to preserve the environment by adopting recycling and techniques of proper management of

Observe particles by using Scanning Electron Microscope (SEM), Energy Essay

Observe particles by using Scanning Electron Microscope (SEM), Energy Dispersive X-ray SEM and Transmission Electron Microscopy - Essay Example Analysis shows that even though the particle size range is from 10 ?m to 160 ?m; however most of the particles are confined in three size ranges: 10 - 20 ?m, 50 – 70 ?m and 110 – 120 ?m. SEM-EDS analysis shows that the bright particle in the silica sample are yttrium oxide. TEM images show two kinds of shape – spherical and cylindrical for TiO2 and faceted equiaxed morphology for Fe2O3 particles. The detailed results and analysis is presented in this report. Introduction Powders play very important role in materials science and industry so much so that one stream of metallurgy is known as powder metallurgy. Besides, ceramics engineering revolved around powders. Consolidation of many materials becomes possible only through powder metallurgy route, which involves filling, compaction and sintering of powders. All these processes depend heavily on powder characteristics like shape, size, size distribution etc. to name a few. Experimental determination of these attrib utes of powder is very important. Some of these attributes like size and size distribution can be determined by indirect methods like laser particle size analysis. However, only a direct method like microscopy gives the confidence in the result. Beside, many attributes like shape and chemistry can be determined only by advance electron microscopy. Electron microscopy involves obtaining high magnification images of the samples using focused beam of accelerated electrons as probe and then forming images by collecting the different signals like backscattered electrons, secondary electrons, transmitted electrons etc [1]. As wavelength of accelerated electrons is much smaller as compared to light; therefore, it can be focused to much finer spots and much higher resolution and magnification is possible in case of electron microscopes as compared to the same in case of optical microscopes. Besides, many signals generated by electron – matter interaction like auger electron, characte ristic X-rays etc. contain information about chemistry of the matter and these signals can be used to determine chemistry of the sample using different detectors like Wavelength Dispersive Spectrometer (WDS), Energy Dispersive Spectrometer etc. Accordingly there are different instruments like Scanning Electron Microscope (SEM), SEM-EDS, Electron Probe Microanalyser (EPMA), Transmission Electron Microscope (TEM), High Resolution Transmission Electron Microscope (HRTEM) etc. A basic description of SEM, SEM-EDS and TEM which were used in these experiments is provided in the subsequent sections. Scanning Electron Microscope (SEM) [2]: As suggested by the name, in this microscope a focused beam of electron is scanned over the sample in a raster using scanning coils. This leads to generation of signals like secondary electrons and backscattered electrons; which are used for image formation on a CRT screen. The image is formed in a pixel by pixel manner and therefore, the raster size corre sponds to the CRT screen size magnification is arrived by dividing the CRT length by the raster length. The magnification can thus be increased gradually by reducing the rater size on the sample as the CRT size is fixed. An SEM consists of an electron source or an electron gun, apertures to block unwanted beam, electromagnetic lenses to focus the beam, different detectors like secondary electron detector and backscattered electron detector for image formati

Canadian Identity Essay Example | Topics and Well Written Essays - 1000 words

Canadian Identity - Essay Example The first step toward solving the problem will be recognizing the identity issue as a national problem. The government and the Canadians should then search for a common solution to the problem. In this paper, I will analyse the issue of Canadian identity from both perspectives. Regionalism is a dominant factor in Canadian social and political framework. As a political ideology, the Canadian regionalism is based on the dominance of one region over the others in national affairs. Regionalism is the main factor that has prevented Canadians from realizing their national identity (Charles 67). Firstly, regionalism has introduced divisions among Canadian citizens. It would be difficult to realize or define a true national identity on a country that is divided between social classes and generation gap. Canadian identity exists and it is responsible for our national prosperity that is based on our regionalism. Canada is divided into six basic regions that are based on geographical and social economic factors in the country. Regionalism is vital for Canadian identity. Regionalism provides a basis for national unity, which is instrumental in defining Canadian identity. ... However, Canada has been experiencing increasing numbers of immigrants from other countries (Charles 67). The existence of people from different cultures has made it impossible to define Canadian culture. Culture is a significant in defining the identity of a country. Thus, Canadians lack a common culture that they can identify themselves with or that associate them with the country. Currently Canada has become the leading country in social diversity. The country is home for people from all over the world including the Americans. As Canadian, we are a multicultural society that is not divided along ethnicity or any racial structures. The intercultural cohesion that exists among Canadians defines them as Canada citizens and people of the modern world (Mathews 98). Lack of a dominant culture or social group in the Canadian society promote national unity and freedom that defines the life of the Canadians and hence their national identity. Canada has a widening generation gap that adds c ontroversy to the issue of the Canadian identity. Since the arrival of the European immigrants, Canadians have been loosening their attachment with their European origin. There has been a continuously increasing variation in societal values across different generations. The association of Canadian citizens with their European countries of origin has been reducing constantly. The first generation of immigrants is completely different from the current generation of Canadian citizens. This trend is increasing constantly resulting into a wide generation gap. This factor is responsible for the lost Canadian identity. For instance how can we define where we are going if we do not acknowledge where we came from. It is a fact that Canadians originated from Europe and

Goal Seek and Solver Essay Example | Topics and Well Written Essays - 1000 words

Goal Seek and Solver - Essay Example The miles per hour are constant, and Excel is goal seeking to determine the number of miles traveled. A data table is a collection of cells that display how changing certain value in worksheet formulas affects the result of those applied formulas. Data tables provide a shortcut for calculating multiple versions in one operation, and a way to view and compare the results of all of the different variations together on one's worksheet. Using the bicycle example again, one could create a table that summarizes the number of miles traveled at different speeds and different elapsed minutes traveled. Excel can save a set of values and substitute them automatically in a worksheet to allow one to forecast the outcome of a worksheet model. One can create and save different scenarios on a worksheet, and then switch to any of these scenarios to view different results. For the bicycle example, one could switch between two or more different number of miles traveled using combinations of different speeds and elapsed minutes traveled. Using solver, one can find an optimal value for a formula in a target worksheet cell. Solver works with a group of cells related to a target cell's formula (Paul 2005, p. xix). Solver changes the values of adjustable cells to produce the desired results one specifies in the target cell formula. One can also apply upper, lower, and exact constraints to restrict the values Solver can choose from to adjust the cells. Using the bicycle example again, one could determine the least and greatest possible number of miles traveled at a given speed and distance. Here's a summary of when one would use each of these tools: Use Goal seeker when one wants to find the correct single input value to achieve the desired single output value. Use Solver to find the best solution to problems that revolve around the manipulation of several changing cells, variables, and constraints (Paul 2005, p. xx). The productivity of electricity is causing profit deterioration. Is electricity being wasted Or is it due to a change in manufacturing process Is it possible to cut down the electric consumption without affecting the production If so, what should be the electricity consumption for it not to affect profitability negatively The answers to some of these questions can be determined by using the "Goal Seeker" and the "Solver" features of Excel. Goal Seeker and Solver features are found in the Tools means of Microsoft Excel. Goal Seeker is the opposite of What-if analysis. Using Goal seeker, we begin with the target value in a dependent cell and determine the correspondent value in the independent cell upon which the target cell is dependent. Goal seeker and solver can change independent cell values, but only Solver can change a range of cells and accept constraints, making it a powerful feature. It can also be used to solve complex optimization problem such as linear programming and integer programming problems. Following is a description of finding answers to some of the questions above: What should be the electricity consumption for it not to affect profitability negatively As shown in figure 2, the company is losing $748 because it is currently using 48,000 kWh of electricity. To reduce this loss to zero, go to Tools menu and choose Goal Seeker, and set cell Q15 (profitability of total energy) to zero, by changing

Vietnam and Iraq Wars Essay Example for Free

Vietnam and Iraq Wars Essay American involvement in Vietnam has roots which preceded the actual deployment of troops, just as the current chapter of the Iraqi War has roots that reach, some would argue, at least as far back as the end of World War II. These two arenas, where America chose to enforce its foreign policy at gunpoint, have many similarities, though ostensibly they appear to be radically different. The two wars began with two very different American presidents telling the Big Lie to the American people and their duly elected representatives, though there are subtle differences in how they came to be told. The Gulf of Tonkin Incident supposedly occurred when two American cruisers, operating within a few miles of the North Vietnamese coast are said to have come under fire by North Vietnamese gunboats. This fabricated incident led Congress to grant Johnson powers to prosecute the war. According to reports released under the Freedom of Information Act it is seriously doubtful as to whether such attacks actually occurred. The 21st century continuation of the Persian Gulf War of the 1990s began with an American president telling the American people and their duly elected representatives another Big Lie. He said, while in possession of reports to the contrary, that the leader of Iraq had amassed weapons of mass destruction, meaning, it was assumed, either nuclear devices or chemical and/or biological weapons. He further stated, knowing it was not likely, that the Iraqi leader was involved in the attack on the twin towers of the World Trade Center. For their own reasons, Lyndon Johnson and George Walker Bush both chose to obfuscate facts in furtherance of their political agenda. In Vietnam the American fighting men never lost an engagement with the enemy. They won every battle, yet lost the war. Some say the war was lost in the streets of America, victim of bad publicity. The French had held the Vietnamese in colonial slavery since the 19th century, and were only driven out by the Japanese in 1941. At the end of World War II the French decided that they had the right to return as feudal lords. The Viet Minh challenged this assertion, and in 1954, at the battle of Dien Bien Phu, they drove home their point. The French commander committed suicide before the garrison fell to the guerillas under command of the brilliant tactician, General Giap. France pulled out once again, but instead of letting Vietnam unify and hold elections, the U. N. partitioned it. This set the stage for North Vietnam’s president Ho Chi Min to begin to unify his nation by force, which the Americans inexplicably chose to challenge, culminating in Lyndon Johnson lying to get his war powers act through Congress. This war, which seemed to be the sole business of the Vietnamese people, became a quagmire to the Americans, and cost Johnson his presidency in the end. It brought shame and disrepute on the United States as Bush’s Iraqi War has done in the 21st century. Bush lied to obtain the needed powers to wage a war in Iraq. The Iraq War began with Americans watching U. S. Military power raining destruction from the air on the people of Iraq. The American president screamed, â€Å"Bring it on! † to taunt the enemy, and after a short time landed on an American carrier ship, greeted by a banner proclaiming, â€Å"Mission Accomplished†. Unfortunately that was another deception. Now Iraq, like Vietnam, is a quagmire and Bush has no more of an exit strategy then did Lyndon Johnson. Of Vietnam, Pete Seeger, the folk singer sang, â€Å"Waist deep in the big muddy, and the big fool said to push on† (Seeger 1967). The big muddy was, naturally, Vietnam, and the big fool giving the order to keep marching was Lyndon Johnson. Few march today in protest of an equally un-winnable war and no one but the loyal opposition calls Bush a big fool. Still the parents of America fatalities know that their sons and daughters are just as dead as those who died in Vietnam, for the same lame reasons, in wars justified by lies. In declassified documents released in late 2005, Robert Hanyok, a National Security Agency Historian said, â€Å"that a second attack, on August 4, 1964, by North Vietnamese torpedo boats on U. S. ships, did not occur despite claims to the contrary by the Johnson administration (Prados 2004). Prados, a NSA archivist has said he believes it is vital to have this information come to light, saying that the Johnson Administration, â€Å"used this claim to support retaliatory air strikes† (ibid). There are disturbing parallels between the lie concerning the Gulf of Tonkin Incident and the ‘manipulated’ intelligence used to justify the Iraqi War, according to the historian. It is only due to public pressure that the secret agency allowed the documents to be declassified some forty years after the fact. The Bush Administration did not want the truth out for the obvious reason of the comparisons that can be made to his untruths concerning Iraq. John W. Dean, former White House counsel to Richard Nixon, said in 2003, that, â€Å"[George W. Bush] made a number of unequivocal statements about the reason the United States needed to pursue the most radical actions any nation can undertake acts of war against another nation. †¦Now it is clear that many of his statements appear to be false† (Dean 2003). Dean posed the rhetorical question of whether lying to start a war is an impeachable offense against a sitting U. S. President. It is only rhetorical because of the fact the lying chief executive’s party had sufficient control of the legislative branch of government. The party apparently believed that lying about sex is impeachable but lying to start war is simply presidential politics. Bush began a series of misstatements, obfuscations, diversions and lies beginning in 2002 as he began to beat his war drum across the United States. In speech after speech he made wilder and wilder claims regarding the Iraqi weapons of mass destruction. Intelligence gathered by this and other governments leaves no doubt that the Iraq regime continues to possess and conceal some of the most lethal weapons ever devised (Bush, G. W. 2003). He even sent his Secretary of Defense, Donald Rumsfeld, on the speech circuit, saying (Rumsfeld) personally knew where these weapons were located. They were never found. They never existed. It was all a lethal charade foisted on America by the Bush/Cheney regime. It was argued that Vietnam was fought in defense of the Domino Theory. It has also been suggested that the Iraq War is being fought for the Haliburton Theory, in which American troops have seized Iraqi oil to increase the profits of an American corporation under the control of the sitting vice-president. What is proven is that the Iraq War, like its predecessor, the Vietnam War, was begun with a Big Lie for which the liar has not been called to account. Intelligence sources’ reports exposed each set of lies for what they are, yet neither Johnson nor Bush has been held accountable. References Bush, G.W. Iraq: Denial and Deception (speech) Mar. 17, 2003     Retrieved 5-10-08 From: http://www.whitehouse.gov/news/releases/2003/03/20030317-7.html Dean, J. 2003   Missing Weapons of Mass Destruction Retrieved 5-  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   11-08 from: http://writ.news.findlaw.com/dean/20030606.html Prados, J. 2004  Ã‚  Ã‚  Ã‚  Ã‚   Tonkin Gulf Intelligence ‘Skewed’ Retrieved   5-10-08 From:

Attitude of Unlisted Companies Towards IFRS

Attitude of Unlisted Companies Towards IFRS SECTION I INTRODUCTION The adoption of international financial reporting standards across the European Union from 1st January 2005 is one of the biggest events in the accounting history. This is especially important after the capital markets were rocked by some big accounting frauds in recent years. In the first phase, 7000-plus listed European companies will have to implement new financial reporting standards from January 2005 (Fuller, Jan 2005). When European Union moved towards one market across Europe, it faced the prospect of different financial reporting regimes across EU participants. To achieve true scale of financial integration, it has become necessary to adopt common financial reporting standards. In June 2002, the European Commission adopted a regulation requiring all listed EU companies in regulated markets to prepare their financial statements in accordance with International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS). The regulation is applicable only on consolidated accounts and companies are free to choose their national GAAPs for subsidiaries and associate companies. The regulation came into force from January 2005. Companies Act 1985 governs the use of UK GAAP by UK based companies. Similarly other EU states have their own laws for accounting standards. The EU states have now modified their national laws to include IFRS regulation to offer a common financial reporting standard. Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004 has extended the application, on a non-compulsory basis, of the EU IFRS regulation to all non-charitable organisations. In the last quarter of previous century, the world economies have moved towards globalisation. Multinational companies are manufacturing and selling across the world and many of these firms are listed at foreign stock exchanges. Globalisation of markets and establishment of multinationals led to increased desire and awareness about international markets. This was soon followed by globalisation of financial markets which increased the value of understanding of international financial results and reporting formats. Rapid improvement in communication technologies and easy access through internet has further spread the profile of international investor. Now a day international investors are not limited to some portfolio managers in big banks. International investors are now as diverse as sophisticated equity manager to a small investor in a remote town. Investors too have diversified their portfolio by international equities and bonds. This rapid globalisation has fuelled the desire to h ave common international standards that could be understood and followed across nations. The ever increasing network of investors has not only opened new financing sources to countries, it has also put some pressure on the financial regulatory authorities to design and improve their financial reporting systems in a manner that is easily understood by wider audiences. The regulatory authorities have on one hand evolve the financial reporting system to match the ever increasing demands of international investors and on the other hand make sure that companies in their countries are not faced with sudden increase in time, resources and knowledge needed to cope with new regulations.   In 1973, 9 countries included UK formed International Accounting Standards Committee (IASC) with an aim to develop common accounting standards. The membership has now grown well over hundred countries with each country, especially bigger economies, bringing in their own perspectives of accounting standards. IASC had to deal with accounting conflictions in coming up with common acceptable accounting standards. One would immediately think whether IASC has been successful in resolving all the conflicts with all member countries and the answer would easily be no. To fully satisfy more than hundred accounting bodies from across the world is almost an impossible task. Yet IASC has done a commendable job and from 1 January 2005, International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS) is applicable in more than 90 countries. In EU, IFRS is compulsory only for listed companies. The standards that UK listed companies will follow are not those issued directly by the International Accounting Standards Board, but are those that have been endorsed by the European Commission. EU has now endorsed IFRS, except for IFRS 6 and some of the IFRIC interpretations, and some changes in IAS 39 relating to the fair value of financial instruments (PwC, 2005a). While the EU regulation is only enforceable on listed companies, it also says that a member state has an option to extend the use of IFRS to unlisted companies within their jurisdiction. Department of Trade and Industry (DTI), the government trade body responsible for company regulation in UK, has said that while there is no mandatory move to IFRS for unlisted companies, the unlisted companies would still be allowed to adopt IFRS over UK GAAP from 2005 onwards. The basic aim of new financial reporting standards is same as that of existing standards – to provide information about financial performance and position of a company to different stakeholders. Internal stakeholders – management – normally have a good grip of what’s going in the business. It is external stakeholders like investors, auditors, suppliers and creditors who need to be informed in a succinct and clear manner about financial implications of business decisions. The IFRS would aim to present a more complete picture of a business by making operating income a more encompassing number. As an example, the financial implications of stock options were kept out of income statements. Companies merely mentioned the number of stock options granted. But now onwards, companies will have to incorporate the fair costs of granting stock options in their income statements. This will allow investors to assess the true costs of executive remuneration. Though the overall aim is same, the differences in implementation and financial reporting do occur due to social, economic and political backgrounds of different nations. Will it be a good policy to allow two different accounting standards in UK – one standard for listed companies and another for unlisted companies. UK’s Accounting Standard Board clearly sees there is no merit in having two separate standards. ASB issued a Discussion Paper in March 2004 highlighting its strategy for convergence with IAS and says that convergence of UK accounting standards to IAS is a foregone conclusion. It has already introduced many changes in recent past to bring UK’s GAAP in line with IFRS. Smaller companies, even listed ones, will find it difficult to cope with extra work due to IFRS. Alternative Investment Market (AIM) realises that most of its companies won’t be in a position to meet IFRS requirements soon. So it changed its regulatory status in October 2004 and is now an â€Å"exchange regulated market† and out of purview of European Commission regulation on regulated markets. Now companies listed on AIM have time until January 2007 to implement IFRS. Accounting Standards Board is also sensitive to the needs placed on business in making a transition from UK accounting standards to IFRS. Big businesses probably have sufficient resources to cope with the change in one year. But the smaller businesses will find it difficult to make all required changes in one year. ASB has proposed a series of changes that would be implemented in 2005 and 2006 which will bring UK financial reporting standards more in line with IFRS. Thereafter ASB will carry out a series of step changes by replacing one or more UK standards. So by the end of 2005-2006, UK standards will almost be in line with IFRS and unlisted companies transition to IFRS in 2007 would be smooth. This research analyses the attitude of unlisted companies towards IFRS. Many research and surveys have been carried out on the acceptance and readiness of listed companies for transition to IFRS. But the issue has not been explored in depth with respect to unlisted companies. The research is based on primary and secondary data. Primary data is collected via interviews and questionnaires with companies and their auditors. A total of [34] interviews – [20] with companies and [14] with their auditors – were conducted to obtain primary data. [52] questionnaire responses by postal survey were also analysed. The results show that there is definitely a much scope in improving International Financial Reporting Standards for unlisted companies. Respondents were concerned about the costs associated with transition to IFRS and also the additional burden that will come with regular enhanced reporting. That IFRS will help in globalisation of capital markets and probably cheaper costs of capital is not of much significance for unlisted companies registered in UK. This research would be useful for institutes and associations framing accounting standards for unlisted companies. Mostly accounting standards have been framed with an eye for listed and large companies. But unlisted companies have much lesser resources to spend on large regulatory requirements and hence should have different reporting requirements that match the benefits obtained from such reporting. The time limitation and resource constraint mean that the primary data via interviews and questionnaire surveys could only be collected through a limited number of respondents. It would be useful to cover a larger data base before implementing the changes. Also more users of data in unlisted companies like banks and creditors should be contacted before policy formulation. The remaining paper is divided in the following sections. Section II is a literature review on justification and applicability of IFRS, and state of readiness in companies. Section III discusses the methodology used in this research. Section IV covers analysis of data obtained through the primary data collection and its interpretation. The paper concludes with section V. SECTION II LITERATURE REVIEW In June 2000, the European Commission proposed a new directive requiring that all publicly traded companies in the member states to adopt International Accounting Standards Board (IASB) standards by no later than January 2005. On 19 July 2002, the European Parliament and the Council approved the IAS regulation (EC) 1606/2002 which said ‘For each financial year starting on or after 1 January 2005, companies governed by the law of a Member State shall prepare their consolidated accounts in conformity with the international accounting standards adopted †¦ if, at their balance sheet date, their securities are admitted to trading on a regulated market of any Member State’ (EU, 2002). Rationale for EU’s adoption of International Financial Reporting Standards The main aim of International Financial reporting Standards is to bring convergence among different national financial reporting standards. Over time, the evolution of different national financial reporting standards has been influenced by local social, political and economic environments. Some of the major reasons for differences in accounting standards are: Political – Capitalist or Communist. Capitalist and communist countries have almost contrasting fundamental economic approach and their accounting standards reflect the same. Stage of economic development. Developed countries generally have better accounting standards in terms of transparency and clarity. Corporate finance – debt or equity. Companies in continental Europe are financed more by debt than the companies in UK. Accounting standards have over time evolved to reflect the importance placed by different sources of financing on different aspects of financial statements. Legal and taxation systems. Convergence will help investors and analysts to compare companies across borders in a better way. But it also implies that either member countries will lose their independence to make national accounting standards that reflect local economic conditions or if they start introducing some changes, IFRS may slowly lose its main strength of common standard. Local, political and economical conditions may force national accounting bodies to introduce variations in IFRS. EU has already introduced some changes in the IAS 39 dealing with financial instruments. It is beyond the scope of this research to see which member countries have introduced variations in IFRS. Convergence between UK GAAP and IFRS ASB has declared its intention to converge UK GAAP with IFRS. It has issued a number of new standards in December 2004 to speed up the convergence of UK GAAP with IFRS. So sooner, even unlisted companies would be following a substantial portion of IFRS due to this convergence. Comparison of UK GAAP and IFRS Similarities The ultimate goal of UK GAAP and IFRS is same – to present information about financial performance and position to all concerned stakeholders. If the aim is same, then should be the main approach adopted by both accounting standards. The UK’s Accounting Standard Board’s Statement of Principles for Financial Reporting is a vital contributor at macro level standard setting. It plays almost same role as International Accounting Standards Committee’s ‘Framework for the Preparation and Presentation of Financial Statements’. ‘It is a description of the fundamental approach that the Accounting Standards Board (ASB) believes should, in principle, underpin the financial statements of profit-oriented entities’ (ASB, 1999). The Statement of Principles has true and fair concept at its core, much like the focal point in International Accounting Standards. Also like IAS, Statement of Principles insists on financial information being relevant and comparable. It is beyond the scope of this research to highlight each and every similarity between UK GAAP and IAS. Differences Though the overall aim is same, the differences in implementation and financial reporting do occur due to social, economic and political backgrounds of different nations. Main concepts behind UK GAAP and IFRS are same, but when we look at micro level, we see many differences at the individual standards level. Following are the main differences between UK GAAP and IFRS: The Statement of Principles allows use of both historical cost and current value approaches in measuring balance sheet categories. The dual use of historical and current value methods is known as modified historical cost basis (ASB, 1999). Under historical cost, the carrying values of assets and liabilities are stated at the lower of cost and recoverable amount. This approach is more conservative as compared to IAS approach which uses fair value method. Also the choice of historical or current value method is based on subjective analysis of a company’s management and hence it is open to some manipulation. Fair value. If we look at global level, both UK GAAP and IFRS have adopted fair value method as the foundation of their accounting standards. IFRS takes fair value adoption even higher when it says that income statement will include the changes in the fair value of items that have not been yet traded like derivatives. The emphasis in new accounting standards is on mark-to-market fair value of assets and liabilities rather than on actual market price based fair values. Now both realised and unrealised changes in fair values would be incorporated in income statements. The first year of transition will see high volatility in earnings and balance sheet statements. Though this brings higher volatility, it will also test the management skills in proper presentation and explanation of changes. It may also change the benchmarks of success for managements. Acquisitions. Acquisition accounting will change under new accounting standards. Under UK GAAP, companies can choose between purchase and merger accounting. Under IFRS, companies will have to account under purchase method only. Goodwill. UK GAAP allowed amortisation of goodwill and companies had the option of not segregating intangible assets from goodwill. Under IFRS, intangible assets have to be separated from goodwill. Goodwill can not be amortised now but companies will have to undertake annual impairment tests to justify the value of goodwill on the balance sheets. BAT’s profits for year 2004 increased by  £454m because it no longer had to amortise goodwill of that amount (AccountancyAge, 2005b). Consolidation of accounts. Under new accounting rules, companies may have to consolidate certain additional subsidiaries into group accounts. On the other hand companies will have to exclude certain subsidiaries or special purpose vehicles which were not included till now. Research and development costs. Under IAS 39, research costs can’t be carried on the balance sheet and would have to write them off as incurred. Companies would still be allowed to capitalise development in line with UK GAAP. Stock options. Internet and share market last boom in late 1990s led to rapid increase in share options as a way to reward employees. The new requirements to record an expense on income statement for the value of share options granted to employees could have a significant impact on earnings. AstraZeneca said in its pro forma 2004 IFRS numbers that new accounting rules on stock options has made it re-consider the use of stock options in rewarding its employees (Tricks, 2005). Distributable profits. Organisations ability to pay dividends is dependent on their distributable profits. Following are some of the major impacts of IFRS on distributable profits Inability to discount deferred tax liabilities, higher provisions for deferred tax when companies move from historical costs to fair value and inclusion of pension deficits in income statement. All of the above will reduce distributable profits. Many companies would have to financially restructure themselves in order to have sufficient distributable profits to meet dividends paid in last year. Deferred tax credit. Deferred tax credit is available under UK GAAP but not under IFRS. GlaxoSmithKline’s restated its 2004 earning per share by (1.9p) due to non-availability of deferred tax credit under IFRS (AccountancyAge, 2005a). Inclusion of business disposals gains in profits from operations. BAT’s profits for year 2004 increased by  £1.3bn after it included gains from disposals to operating profits (AccountancyAge, 2005b). Adding disposal gains to operating profits will make it harder for investors and analysts to separate the earnings from continuing businesses. Derivative contracts. Under IFRS, some derivative contracts will not qualify as hedges as they wont meet the criteria. UK GAAP allowed deferment of such contracts until transaction took place. IFRS won’t allow the deferment of such contract and would impact the profit and loss account even before the transaction took place. It is better in a way that investors will know the current value of the firm as on date rather than historical costs of such instruments, especially if the duration of financial instruments was long. At the same time, it would increase the burden on the company to calculate the fair value of all such transactions. Agricultural. UK GAAP allowed companies to use a cost model for biological assets and all agricultural produce. But under IAS companies would have to use mark to market method for valuing such assets. Now companies would have to use market valuation even for assets in far off countries. Advantages of IFRS over UK GAAP Common financial language. Adopting common financial reporting standards will open up a company to more markets and investors. The growth in telecommunications has made it easier for smaller investors to invest across physical boundaries. Such investors are normally not as financially sophisticated as some big financial institutions. They would also not like to understand more than one accounting standards as they don’t have required resources in hand to do so. With one common accounting standard, more investors would like to explore companies across nations. Acquisitions. IFRS 3 is more open and transparent than UK GAAP on acquisitions. It will allow investors and analysts to judge faster the success of an acquisition. Many of the companies that have relied on acquisition as a key cornerstone for growth would now come under intense scrutiny and may have to develop a new strategy for growing business.    Consolidation. In IFRS, all entities will have to provide a cash flow statement. Additionally there would be more transparency within the group companies and this should make the consolidation process more straight-forward. Securitisation by businesses is likely to be impacted by the new ways governing how companies can show assets and liabilities on their financial statements. Companies have used securitisation to cash in assets like trade receivables sitting on their balance sheets. Securitisation helps companies to slim down their balance sheets and hence allows companies to show higher return on assets at same earnings. And it was one of the reasons why companies went for securitisation. But stringent criteria for moving assets and liabilities off balance sheet will threaten securitisation. Sue Harding, chief accountant at Standard Poor’s in Europe said that new international accounting standards were sweeping a lot of securitised assets back on to balance sheets (Jopson, Feb 2005). This will help investors compare like to like and avoid companies that have used securitisation only to make-up their balance sheets. There is no harm in using securitisation if used in a proper way and not to deceive stakeholders. But we have seen how corporations like Enron had used securitisation to disguise their true financial position. Annual impairment review. Annual impairment review will benefit investors because the companies then won’t like to take big goodwill cuts in one year and not do anything for years. Annual reviews would help investors judging whether the amount paid by companies in acquiring other company was justified or not. Access to cheaper capital. Increase in investor profile diversification would most probably lower the cost of capital for most of the companies. This is especially true for smaller companies which don’t have financial muscles and resources to tap international investors. Expensing research costs gives better information to investors and other stakeholders because at research stage the chances of success are quite uncertain. Investors can only be sure of development costs bringing in some returns in future. Also by segregating research and development costs, external stakeholders will now have a better chance to differentiate the suitability of costs incurred in developing new products. Multiple listings. Many companies now have multiple listings across different countries. Companies need to prepare financial statements as per each local accounting standard to meet listing requirements. With one accounting standard only it will save a lot of botheration for companies with multiple listings. Dividends. Under IFRS dividends are not provided for until the dividend recommended by the Board is approved by shareholders. This move will bring more convergence between accounting profits and cash flows. Disadvantages of IFRS Fair value. While fair value in a way conveys more up to date value of a company as compared to historic costs, it also puts a question mark on the methods used and the reliability of fair value. Derivative instruments which are commonly traded on various stock exchanges can be easily assigned value. So while valuing some of the assets or liabilities may not be difficult, the question still remains what impact such valuations will have on companies’ business models. Many companies use hedging instruments as a strategic tool rather than for intentional gains. Any short-term swings in such instruments may have a significant impact on income statement and probably adverse market reactions may deter companies’ from using such instruments. Then comes the more important issue of valuing assets and liabilities that don’t have a proper market. The companies may use some valuation model, which itself may not be the right way, to value an asset or liability. The model will incorporate some subjective assumptions. An example would be brand value. A same brand can have two different values for two different companies because of its strategic importance. So at one hand, investors and other external stakeholders are getting more objective information about a companies’ assets and liabilities, they are also getting valuation based on more subjective assessments. Only time will tell whether some individuals or companies will use it to manipulate results. An interesting thing to observe would be the treatment and importance given by analysts to unrealised fair value of assets and liabilities. Some investors may try to separate unrealised gains and losses from other operational performance. It may also prompt companies to issue adjusted earnings excluding unrealised gains and losses. An important point to note about fair value principle is that the financial statements should not be seen as perfect prediction of things to come. That depends on the strategic and business decisions management will take in future. Just having a fair value of assets and liabilities doesn’t mean that the company will be able to extract those values in future.    Dividend. New accounting standards promote payment of dividend from distributable reserves. With the inclusion of unrealised gains and losses and pension deficits, the first few years of new accounting standards may not leave enough of distributable reserves for dividend payments. Securitisation. Securitising assets into special purpose vehicles and re-financing them through had also helped companies raise funds at lower costs. The new accounting standards by restricting the use of special purpose vehicles, would diminish some sources of cheap financing. It is question yet to be fully tested in the practical world that since the assets are same, change in financing options shouldn’t change the returns on total assets. By refinancing at lower rates through securitisation should result in higher financing cost for remaining assets such that the overall costs remain same. But examination of this hypothesis is beyond the scope of this dissertation. But what is mostly observed in capital markets is that when companies announce refinancing, the share price rises. How much of the rise is from relief that company will survive and how much from the fact that the overall costs have lowered is not known. Annual impairment tests. Annual impairment tests are easier said than done. Companies would not only have to devote substantial resources to do that first would have to train its personnel to do that. Assessing true value of a goodwill is not easy. If there is a comparable market then companies can easily value it. Even then it may differ from case to case as it would be very unusual to see exactly two similar companies. Goodwill is very different from tangible assets or technologies and depends a lot on market perception and strategy. Companies would have to review the whole process of valuing goodwill and would have to review the valuation process at constant intervals. Net pension liability. The inclusion of net pension liability on the balance sheet may have severe impact on the shareholders funds. Companies will be required to have annual actuarial valuation of their pension liabilities and the same would be reflected in financial statements. Most of the pension funds invest in equity markets, which have been quite volatile in the recent years. So though over a longer period, the movements in pension liabilities may even out but in short to medium term, it may have a dramatic effect on balance sheets and earning statements. Segmental information. IAS 14 requires companies to report information on their business segments and on a scale more detail than UK GAAP. As of date, no agreed accounting practices have emerged on how much should be disclosed because companies may end up revealing sensitive information to its competitors. If companies disclose the turnover, earnings and expenditure for each segment, its profitable operations may come under intense competition. Ian Dilks of PwC said that â€Å"some companies have found they’re giving much more information than they’re comfortable with on sales and the profitability of product areas† (Tricks, 2005) Expensing research costs may result in listed companies focusing more on products in development stage than in research stage. This will keep their balance sheets healthy but may harm long term prospects. Complex and long IFRS compliant reports. PricewaterhouseCoopers estimates that an IFRS compliant financial report for insurance companies could be up to twice as long as those prepared under existing UK GAAP (Finn Zoon, 2004). The requirement for other industry sectors though may not be as intensive as for insurance sector, their IFRS compliant financial may also be longer and resource intensive than under UK GAAP. Any company that has makes an acquisition will have to do annual goodwill impairment analysis and most of them would like to explain the results also. Comparable formats. IAS 1 is less prescriptive than the UK GAAP when it comes to the format of the balance sheet and income statement. It just distinguishes current and non-current assets and liabilities. Investors, when faced with different formats, may find it difficult to compare companies. Modify organisation structures. Meall (2003) suggested that the additional burden of more financial reporting along different segments may force companies to modify their existing organisational structures within their financial systems to collect and analyse data. Impact of IFRS on different industries IFRS will have different impact on different industries. For some, most of the applied UK GAAP is almost same as IFRS and won’t feel the difference. But for some industries, the difference in accounting standards may have a substantial impact. Financial services and insurance companies are among them. Financial services companies would be affected by substantial change in recognition and measurement of financial instruments under IAS 39. UK GAAP has no equivalent to IAS 4 which deals with insurance contracts. Insurance companies would now have to account for this in their financial statements. Under IFRS, insurance companies would have to book financial instruments such as derivatives at market value rather than historical value allowed under UK GAAP. Many insurers have said that this will distort their earnings (Reuters, 2005a). IFRS will put more stringent criteria for classification of insurance products and this may lead to reclassification of some insurance products as investment products. Other industries that might face higher impact are the ones that heavily use hedging instruments in their day to day operations. Mostly companies using commodity materials like oil as a significant part of their input costs use hedging to smooth over the volatile changes in commodity markets. New accounting standards will reduce Tesco’s projected annual profit of  £2,000m by  £30m only, a reduction of 1.5%. But for some companies the impact would be much more. Royal Sun Alliance said that new accounting rules would reduce its net assets by  £400m (Reuters, 2005a). This is a big number by any standards and shareholders Attitude of Unlisted Companies Towards IFRS Attitude of Unlisted Companies Towards IFRS SECTION I INTRODUCTION The adoption of international financial reporting standards across the European Union from 1st January 2005 is one of the biggest events in the accounting history. This is especially important after the capital markets were rocked by some big accounting frauds in recent years. In the first phase, 7000-plus listed European companies will have to implement new financial reporting standards from January 2005 (Fuller, Jan 2005). When European Union moved towards one market across Europe, it faced the prospect of different financial reporting regimes across EU participants. To achieve true scale of financial integration, it has become necessary to adopt common financial reporting standards. In June 2002, the European Commission adopted a regulation requiring all listed EU companies in regulated markets to prepare their financial statements in accordance with International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS). The regulation is applicable only on consolidated accounts and companies are free to choose their national GAAPs for subsidiaries and associate companies. The regulation came into force from January 2005. Companies Act 1985 governs the use of UK GAAP by UK based companies. Similarly other EU states have their own laws for accounting standards. The EU states have now modified their national laws to include IFRS regulation to offer a common financial reporting standard. Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004 has extended the application, on a non-compulsory basis, of the EU IFRS regulation to all non-charitable organisations. In the last quarter of previous century, the world economies have moved towards globalisation. Multinational companies are manufacturing and selling across the world and many of these firms are listed at foreign stock exchanges. Globalisation of markets and establishment of multinationals led to increased desire and awareness about international markets. This was soon followed by globalisation of financial markets which increased the value of understanding of international financial results and reporting formats. Rapid improvement in communication technologies and easy access through internet has further spread the profile of international investor. Now a day international investors are not limited to some portfolio managers in big banks. International investors are now as diverse as sophisticated equity manager to a small investor in a remote town. Investors too have diversified their portfolio by international equities and bonds. This rapid globalisation has fuelled the desire to h ave common international standards that could be understood and followed across nations. The ever increasing network of investors has not only opened new financing sources to countries, it has also put some pressure on the financial regulatory authorities to design and improve their financial reporting systems in a manner that is easily understood by wider audiences. The regulatory authorities have on one hand evolve the financial reporting system to match the ever increasing demands of international investors and on the other hand make sure that companies in their countries are not faced with sudden increase in time, resources and knowledge needed to cope with new regulations.   In 1973, 9 countries included UK formed International Accounting Standards Committee (IASC) with an aim to develop common accounting standards. The membership has now grown well over hundred countries with each country, especially bigger economies, bringing in their own perspectives of accounting standards. IASC had to deal with accounting conflictions in coming up with common acceptable accounting standards. One would immediately think whether IASC has been successful in resolving all the conflicts with all member countries and the answer would easily be no. To fully satisfy more than hundred accounting bodies from across the world is almost an impossible task. Yet IASC has done a commendable job and from 1 January 2005, International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS) is applicable in more than 90 countries. In EU, IFRS is compulsory only for listed companies. The standards that UK listed companies will follow are not those issued directly by the International Accounting Standards Board, but are those that have been endorsed by the European Commission. EU has now endorsed IFRS, except for IFRS 6 and some of the IFRIC interpretations, and some changes in IAS 39 relating to the fair value of financial instruments (PwC, 2005a). While the EU regulation is only enforceable on listed companies, it also says that a member state has an option to extend the use of IFRS to unlisted companies within their jurisdiction. Department of Trade and Industry (DTI), the government trade body responsible for company regulation in UK, has said that while there is no mandatory move to IFRS for unlisted companies, the unlisted companies would still be allowed to adopt IFRS over UK GAAP from 2005 onwards. The basic aim of new financial reporting standards is same as that of existing standards – to provide information about financial performance and position of a company to different stakeholders. Internal stakeholders – management – normally have a good grip of what’s going in the business. It is external stakeholders like investors, auditors, suppliers and creditors who need to be informed in a succinct and clear manner about financial implications of business decisions. The IFRS would aim to present a more complete picture of a business by making operating income a more encompassing number. As an example, the financial implications of stock options were kept out of income statements. Companies merely mentioned the number of stock options granted. But now onwards, companies will have to incorporate the fair costs of granting stock options in their income statements. This will allow investors to assess the true costs of executive remuneration. Though the overall aim is same, the differences in implementation and financial reporting do occur due to social, economic and political backgrounds of different nations. Will it be a good policy to allow two different accounting standards in UK – one standard for listed companies and another for unlisted companies. UK’s Accounting Standard Board clearly sees there is no merit in having two separate standards. ASB issued a Discussion Paper in March 2004 highlighting its strategy for convergence with IAS and says that convergence of UK accounting standards to IAS is a foregone conclusion. It has already introduced many changes in recent past to bring UK’s GAAP in line with IFRS. Smaller companies, even listed ones, will find it difficult to cope with extra work due to IFRS. Alternative Investment Market (AIM) realises that most of its companies won’t be in a position to meet IFRS requirements soon. So it changed its regulatory status in October 2004 and is now an â€Å"exchange regulated market† and out of purview of European Commission regulation on regulated markets. Now companies listed on AIM have time until January 2007 to implement IFRS. Accounting Standards Board is also sensitive to the needs placed on business in making a transition from UK accounting standards to IFRS. Big businesses probably have sufficient resources to cope with the change in one year. But the smaller businesses will find it difficult to make all required changes in one year. ASB has proposed a series of changes that would be implemented in 2005 and 2006 which will bring UK financial reporting standards more in line with IFRS. Thereafter ASB will carry out a series of step changes by replacing one or more UK standards. So by the end of 2005-2006, UK standards will almost be in line with IFRS and unlisted companies transition to IFRS in 2007 would be smooth. This research analyses the attitude of unlisted companies towards IFRS. Many research and surveys have been carried out on the acceptance and readiness of listed companies for transition to IFRS. But the issue has not been explored in depth with respect to unlisted companies. The research is based on primary and secondary data. Primary data is collected via interviews and questionnaires with companies and their auditors. A total of [34] interviews – [20] with companies and [14] with their auditors – were conducted to obtain primary data. [52] questionnaire responses by postal survey were also analysed. The results show that there is definitely a much scope in improving International Financial Reporting Standards for unlisted companies. Respondents were concerned about the costs associated with transition to IFRS and also the additional burden that will come with regular enhanced reporting. That IFRS will help in globalisation of capital markets and probably cheaper costs of capital is not of much significance for unlisted companies registered in UK. This research would be useful for institutes and associations framing accounting standards for unlisted companies. Mostly accounting standards have been framed with an eye for listed and large companies. But unlisted companies have much lesser resources to spend on large regulatory requirements and hence should have different reporting requirements that match the benefits obtained from such reporting. The time limitation and resource constraint mean that the primary data via interviews and questionnaire surveys could only be collected through a limited number of respondents. It would be useful to cover a larger data base before implementing the changes. Also more users of data in unlisted companies like banks and creditors should be contacted before policy formulation. The remaining paper is divided in the following sections. Section II is a literature review on justification and applicability of IFRS, and state of readiness in companies. Section III discusses the methodology used in this research. Section IV covers analysis of data obtained through the primary data collection and its interpretation. The paper concludes with section V. SECTION II LITERATURE REVIEW In June 2000, the European Commission proposed a new directive requiring that all publicly traded companies in the member states to adopt International Accounting Standards Board (IASB) standards by no later than January 2005. On 19 July 2002, the European Parliament and the Council approved the IAS regulation (EC) 1606/2002 which said ‘For each financial year starting on or after 1 January 2005, companies governed by the law of a Member State shall prepare their consolidated accounts in conformity with the international accounting standards adopted †¦ if, at their balance sheet date, their securities are admitted to trading on a regulated market of any Member State’ (EU, 2002). Rationale for EU’s adoption of International Financial Reporting Standards The main aim of International Financial reporting Standards is to bring convergence among different national financial reporting standards. Over time, the evolution of different national financial reporting standards has been influenced by local social, political and economic environments. Some of the major reasons for differences in accounting standards are: Political – Capitalist or Communist. Capitalist and communist countries have almost contrasting fundamental economic approach and their accounting standards reflect the same. Stage of economic development. Developed countries generally have better accounting standards in terms of transparency and clarity. Corporate finance – debt or equity. Companies in continental Europe are financed more by debt than the companies in UK. Accounting standards have over time evolved to reflect the importance placed by different sources of financing on different aspects of financial statements. Legal and taxation systems. Convergence will help investors and analysts to compare companies across borders in a better way. But it also implies that either member countries will lose their independence to make national accounting standards that reflect local economic conditions or if they start introducing some changes, IFRS may slowly lose its main strength of common standard. Local, political and economical conditions may force national accounting bodies to introduce variations in IFRS. EU has already introduced some changes in the IAS 39 dealing with financial instruments. It is beyond the scope of this research to see which member countries have introduced variations in IFRS. Convergence between UK GAAP and IFRS ASB has declared its intention to converge UK GAAP with IFRS. It has issued a number of new standards in December 2004 to speed up the convergence of UK GAAP with IFRS. So sooner, even unlisted companies would be following a substantial portion of IFRS due to this convergence. Comparison of UK GAAP and IFRS Similarities The ultimate goal of UK GAAP and IFRS is same – to present information about financial performance and position to all concerned stakeholders. If the aim is same, then should be the main approach adopted by both accounting standards. The UK’s Accounting Standard Board’s Statement of Principles for Financial Reporting is a vital contributor at macro level standard setting. It plays almost same role as International Accounting Standards Committee’s ‘Framework for the Preparation and Presentation of Financial Statements’. ‘It is a description of the fundamental approach that the Accounting Standards Board (ASB) believes should, in principle, underpin the financial statements of profit-oriented entities’ (ASB, 1999). The Statement of Principles has true and fair concept at its core, much like the focal point in International Accounting Standards. Also like IAS, Statement of Principles insists on financial information being relevant and comparable. It is beyond the scope of this research to highlight each and every similarity between UK GAAP and IAS. Differences Though the overall aim is same, the differences in implementation and financial reporting do occur due to social, economic and political backgrounds of different nations. Main concepts behind UK GAAP and IFRS are same, but when we look at micro level, we see many differences at the individual standards level. Following are the main differences between UK GAAP and IFRS: The Statement of Principles allows use of both historical cost and current value approaches in measuring balance sheet categories. The dual use of historical and current value methods is known as modified historical cost basis (ASB, 1999). Under historical cost, the carrying values of assets and liabilities are stated at the lower of cost and recoverable amount. This approach is more conservative as compared to IAS approach which uses fair value method. Also the choice of historical or current value method is based on subjective analysis of a company’s management and hence it is open to some manipulation. Fair value. If we look at global level, both UK GAAP and IFRS have adopted fair value method as the foundation of their accounting standards. IFRS takes fair value adoption even higher when it says that income statement will include the changes in the fair value of items that have not been yet traded like derivatives. The emphasis in new accounting standards is on mark-to-market fair value of assets and liabilities rather than on actual market price based fair values. Now both realised and unrealised changes in fair values would be incorporated in income statements. The first year of transition will see high volatility in earnings and balance sheet statements. Though this brings higher volatility, it will also test the management skills in proper presentation and explanation of changes. It may also change the benchmarks of success for managements. Acquisitions. Acquisition accounting will change under new accounting standards. Under UK GAAP, companies can choose between purchase and merger accounting. Under IFRS, companies will have to account under purchase method only. Goodwill. UK GAAP allowed amortisation of goodwill and companies had the option of not segregating intangible assets from goodwill. Under IFRS, intangible assets have to be separated from goodwill. Goodwill can not be amortised now but companies will have to undertake annual impairment tests to justify the value of goodwill on the balance sheets. BAT’s profits for year 2004 increased by  £454m because it no longer had to amortise goodwill of that amount (AccountancyAge, 2005b). Consolidation of accounts. Under new accounting rules, companies may have to consolidate certain additional subsidiaries into group accounts. On the other hand companies will have to exclude certain subsidiaries or special purpose vehicles which were not included till now. Research and development costs. Under IAS 39, research costs can’t be carried on the balance sheet and would have to write them off as incurred. Companies would still be allowed to capitalise development in line with UK GAAP. Stock options. Internet and share market last boom in late 1990s led to rapid increase in share options as a way to reward employees. The new requirements to record an expense on income statement for the value of share options granted to employees could have a significant impact on earnings. AstraZeneca said in its pro forma 2004 IFRS numbers that new accounting rules on stock options has made it re-consider the use of stock options in rewarding its employees (Tricks, 2005). Distributable profits. Organisations ability to pay dividends is dependent on their distributable profits. Following are some of the major impacts of IFRS on distributable profits Inability to discount deferred tax liabilities, higher provisions for deferred tax when companies move from historical costs to fair value and inclusion of pension deficits in income statement. All of the above will reduce distributable profits. Many companies would have to financially restructure themselves in order to have sufficient distributable profits to meet dividends paid in last year. Deferred tax credit. Deferred tax credit is available under UK GAAP but not under IFRS. GlaxoSmithKline’s restated its 2004 earning per share by (1.9p) due to non-availability of deferred tax credit under IFRS (AccountancyAge, 2005a). Inclusion of business disposals gains in profits from operations. BAT’s profits for year 2004 increased by  £1.3bn after it included gains from disposals to operating profits (AccountancyAge, 2005b). Adding disposal gains to operating profits will make it harder for investors and analysts to separate the earnings from continuing businesses. Derivative contracts. Under IFRS, some derivative contracts will not qualify as hedges as they wont meet the criteria. UK GAAP allowed deferment of such contracts until transaction took place. IFRS won’t allow the deferment of such contract and would impact the profit and loss account even before the transaction took place. It is better in a way that investors will know the current value of the firm as on date rather than historical costs of such instruments, especially if the duration of financial instruments was long. At the same time, it would increase the burden on the company to calculate the fair value of all such transactions. Agricultural. UK GAAP allowed companies to use a cost model for biological assets and all agricultural produce. But under IAS companies would have to use mark to market method for valuing such assets. Now companies would have to use market valuation even for assets in far off countries. Advantages of IFRS over UK GAAP Common financial language. Adopting common financial reporting standards will open up a company to more markets and investors. The growth in telecommunications has made it easier for smaller investors to invest across physical boundaries. Such investors are normally not as financially sophisticated as some big financial institutions. They would also not like to understand more than one accounting standards as they don’t have required resources in hand to do so. With one common accounting standard, more investors would like to explore companies across nations. Acquisitions. IFRS 3 is more open and transparent than UK GAAP on acquisitions. It will allow investors and analysts to judge faster the success of an acquisition. Many of the companies that have relied on acquisition as a key cornerstone for growth would now come under intense scrutiny and may have to develop a new strategy for growing business.    Consolidation. In IFRS, all entities will have to provide a cash flow statement. Additionally there would be more transparency within the group companies and this should make the consolidation process more straight-forward. Securitisation by businesses is likely to be impacted by the new ways governing how companies can show assets and liabilities on their financial statements. Companies have used securitisation to cash in assets like trade receivables sitting on their balance sheets. Securitisation helps companies to slim down their balance sheets and hence allows companies to show higher return on assets at same earnings. And it was one of the reasons why companies went for securitisation. But stringent criteria for moving assets and liabilities off balance sheet will threaten securitisation. Sue Harding, chief accountant at Standard Poor’s in Europe said that new international accounting standards were sweeping a lot of securitised assets back on to balance sheets (Jopson, Feb 2005). This will help investors compare like to like and avoid companies that have used securitisation only to make-up their balance sheets. There is no harm in using securitisation if used in a proper way and not to deceive stakeholders. But we have seen how corporations like Enron had used securitisation to disguise their true financial position. Annual impairment review. Annual impairment review will benefit investors because the companies then won’t like to take big goodwill cuts in one year and not do anything for years. Annual reviews would help investors judging whether the amount paid by companies in acquiring other company was justified or not. Access to cheaper capital. Increase in investor profile diversification would most probably lower the cost of capital for most of the companies. This is especially true for smaller companies which don’t have financial muscles and resources to tap international investors. Expensing research costs gives better information to investors and other stakeholders because at research stage the chances of success are quite uncertain. Investors can only be sure of development costs bringing in some returns in future. Also by segregating research and development costs, external stakeholders will now have a better chance to differentiate the suitability of costs incurred in developing new products. Multiple listings. Many companies now have multiple listings across different countries. Companies need to prepare financial statements as per each local accounting standard to meet listing requirements. With one accounting standard only it will save a lot of botheration for companies with multiple listings. Dividends. Under IFRS dividends are not provided for until the dividend recommended by the Board is approved by shareholders. This move will bring more convergence between accounting profits and cash flows. Disadvantages of IFRS Fair value. While fair value in a way conveys more up to date value of a company as compared to historic costs, it also puts a question mark on the methods used and the reliability of fair value. Derivative instruments which are commonly traded on various stock exchanges can be easily assigned value. So while valuing some of the assets or liabilities may not be difficult, the question still remains what impact such valuations will have on companies’ business models. Many companies use hedging instruments as a strategic tool rather than for intentional gains. Any short-term swings in such instruments may have a significant impact on income statement and probably adverse market reactions may deter companies’ from using such instruments. Then comes the more important issue of valuing assets and liabilities that don’t have a proper market. The companies may use some valuation model, which itself may not be the right way, to value an asset or liability. The model will incorporate some subjective assumptions. An example would be brand value. A same brand can have two different values for two different companies because of its strategic importance. So at one hand, investors and other external stakeholders are getting more objective information about a companies’ assets and liabilities, they are also getting valuation based on more subjective assessments. Only time will tell whether some individuals or companies will use it to manipulate results. An interesting thing to observe would be the treatment and importance given by analysts to unrealised fair value of assets and liabilities. Some investors may try to separate unrealised gains and losses from other operational performance. It may also prompt companies to issue adjusted earnings excluding unrealised gains and losses. An important point to note about fair value principle is that the financial statements should not be seen as perfect prediction of things to come. That depends on the strategic and business decisions management will take in future. Just having a fair value of assets and liabilities doesn’t mean that the company will be able to extract those values in future.    Dividend. New accounting standards promote payment of dividend from distributable reserves. With the inclusion of unrealised gains and losses and pension deficits, the first few years of new accounting standards may not leave enough of distributable reserves for dividend payments. Securitisation. Securitising assets into special purpose vehicles and re-financing them through had also helped companies raise funds at lower costs. The new accounting standards by restricting the use of special purpose vehicles, would diminish some sources of cheap financing. It is question yet to be fully tested in the practical world that since the assets are same, change in financing options shouldn’t change the returns on total assets. By refinancing at lower rates through securitisation should result in higher financing cost for remaining assets such that the overall costs remain same. But examination of this hypothesis is beyond the scope of this dissertation. But what is mostly observed in capital markets is that when companies announce refinancing, the share price rises. How much of the rise is from relief that company will survive and how much from the fact that the overall costs have lowered is not known. Annual impairment tests. Annual impairment tests are easier said than done. Companies would not only have to devote substantial resources to do that first would have to train its personnel to do that. Assessing true value of a goodwill is not easy. If there is a comparable market then companies can easily value it. Even then it may differ from case to case as it would be very unusual to see exactly two similar companies. Goodwill is very different from tangible assets or technologies and depends a lot on market perception and strategy. Companies would have to review the whole process of valuing goodwill and would have to review the valuation process at constant intervals. Net pension liability. The inclusion of net pension liability on the balance sheet may have severe impact on the shareholders funds. Companies will be required to have annual actuarial valuation of their pension liabilities and the same would be reflected in financial statements. Most of the pension funds invest in equity markets, which have been quite volatile in the recent years. So though over a longer period, the movements in pension liabilities may even out but in short to medium term, it may have a dramatic effect on balance sheets and earning statements. Segmental information. IAS 14 requires companies to report information on their business segments and on a scale more detail than UK GAAP. As of date, no agreed accounting practices have emerged on how much should be disclosed because companies may end up revealing sensitive information to its competitors. If companies disclose the turnover, earnings and expenditure for each segment, its profitable operations may come under intense competition. Ian Dilks of PwC said that â€Å"some companies have found they’re giving much more information than they’re comfortable with on sales and the profitability of product areas† (Tricks, 2005) Expensing research costs may result in listed companies focusing more on products in development stage than in research stage. This will keep their balance sheets healthy but may harm long term prospects. Complex and long IFRS compliant reports. PricewaterhouseCoopers estimates that an IFRS compliant financial report for insurance companies could be up to twice as long as those prepared under existing UK GAAP (Finn Zoon, 2004). The requirement for other industry sectors though may not be as intensive as for insurance sector, their IFRS compliant financial may also be longer and resource intensive than under UK GAAP. Any company that has makes an acquisition will have to do annual goodwill impairment analysis and most of them would like to explain the results also. Comparable formats. IAS 1 is less prescriptive than the UK GAAP when it comes to the format of the balance sheet and income statement. It just distinguishes current and non-current assets and liabilities. Investors, when faced with different formats, may find it difficult to compare companies. Modify organisation structures. Meall (2003) suggested that the additional burden of more financial reporting along different segments may force companies to modify their existing organisational structures within their financial systems to collect and analyse data. Impact of IFRS on different industries IFRS will have different impact on different industries. For some, most of the applied UK GAAP is almost same as IFRS and won’t feel the difference. But for some industries, the difference in accounting standards may have a substantial impact. Financial services and insurance companies are among them. Financial services companies would be affected by substantial change in recognition and measurement of financial instruments under IAS 39. UK GAAP has no equivalent to IAS 4 which deals with insurance contracts. Insurance companies would now have to account for this in their financial statements. Under IFRS, insurance companies would have to book financial instruments such as derivatives at market value rather than historical value allowed under UK GAAP. Many insurers have said that this will distort their earnings (Reuters, 2005a). IFRS will put more stringent criteria for classification of insurance products and this may lead to reclassification of some insurance products as investment products. Other industries that might face higher impact are the ones that heavily use hedging instruments in their day to day operations. Mostly companies using commodity materials like oil as a significant part of their input costs use hedging to smooth over the volatile changes in commodity markets. New accounting standards will reduce Tesco’s projected annual profit of  £2,000m by  £30m only, a reduction of 1.5%. But for some companies the impact would be much more. Royal Sun Alliance said that new accounting rules would reduce its net assets by  £400m (Reuters, 2005a). This is a big number by any standards and shareholders