Finding differences Essay Example | Topics and Well Written Essays - 2500 words - 1

Finding differences - Essay Example This report presents a comprehensive review of financial statements of three companies, which are operating in US, UK and France respectively and follow the financial reporting frameworks applicable in the said countries. Caterpillar Incorporation is a US based company headquartered in Peoria. The company is engaged in the business of manufacturing and selling machinery and equipments related to construction industry (Yahoo Finance, 2013). The three companies considered in this report, as stated earlier, are based in three different countries which have different financial reporting frameworks applicable for financial reporting of corporate entities. In the United States of America, corporate entities are required to report their financial statements in accordance with the principles and guidance presented under U.S. GAAP. The framework provided in U.S. GAAP is thus the primary accounting or financial reporting framework in the US. On the other hand, in the United Kingdom, business entities are required to report their financial statements in accordance with the principles and guidance presented under International Financial Reporting Standards (IFRS). The standards provided under IFRS are collectively regarded as the financial reporting framework to which business entities operating in the UK adhere. Lastly, in France, French GAAP are used by corporate entities to prepare their respective sets of financial statements (Nobes et al., 2008; Radebaugh & Gray, 2008). Due to the difference in financial reporting frameworks of the companies selected in this report, there are a number of differences in their financial statements’ structure and other reporting and valuation related matters. These differences are discussed in the following sections. All three companies have different names for income statement; in Caterpillar’s financial statements, it is named as â€Å"Results of Operations†, in Glaxo