Measuring the degree of international harmony in selected accounting measurement practices

The I-index developed by Van der Tas and chi square tests suggested by Tay and Parker are used to quantify and assess the degree of harmony in selected accounting measurement practices of large companies from France, Germany, Japan, the UK, and the US. The results indicate significant differences in accounting for inventory, fixed assets, and investments among the countries. The 3 sub-topics that exhibited a high degree of harmony were the treatment of gains or losses on the disposal of fixed assets, short-term investments and long-term investments, a reflection of the preference of regulators and companies in the different countries for taking disposal gains and losses to income as they occur. Depreciation and inventory costing methods had the lowest I-index scores respectively, suggesting that the level of international harmony in these 2 basic accounting measurement practices is fairly low. It was found that the disclosure of information on accounting policies, even on fundamental accounting measurement methods such as inventory costing methods, tends to be quite low.