For this week’s interview in Faces, we had the opportunity to speak with Indy van Heijst, a 23-year-old master’s student in Accountancy from the Netherlands. Indy is currently spending a semester abroad at Shenandoah University, a small institution located in Winchester, Virginia, just 1.5 hours from Washington, D.C. Motivated by her curiosity about American universities, Indy decided to add this semester abroad to her program through ISEP, an organization that connects students with global study opportunities. Despite some initial challenges, such as transitioning to online classes and adjusting to the campus culture, Indy is embracing the American experience and looking forward to exploring the U.S. during her stay. Read on as she shares insights into student life in America, cultural differences, and her travel plans. How does university life in the USA differ from what you experienced in the Netherlands? Perhaps due to its size, with approximately 4,000 students, Shenandoah University offers a unique academic environment characterized by small class sizes. All of my classes accommodate a maximum of 15 students, and attendance is mandatory for all lectures. Another change I have experienced is the prevalence of numerous small assignments. While at Tilburg University I typically had one final exam and one group project, at Shenandoah University I have almost weekly quizzes and assignments for each course. Additionally, as previously mentioned, I reside on campus in dormitory accommodations. One notable difference from the Netherlands is that I share a room with another person, which is an integral aspect of the American university experience. Luckily, my roommate is very nice and we have already bonded. I also have a meal plan that includes 18 meals per week, which allows me to enjoy meals in the dining hall or at three small restaurants on campus—Moe’s Southwest Grill, The Spread, and Bento Sushi—where I can order food. What has been your favorite aspect of studying in the USA so far? Especially interesting to see was the official moving-in date. As international students, we arrived on campus earlier than the majority of students due to two additional orientation days that provided information about the university, our visas, and various other topics. On the official move-in day, student-athletes assisted the incoming freshmen with their belongings, creating a welcoming environment. Additionally, the marching band and cheerleaders were present, contributing to a vibrant atmosphere with their performances. How do you find the academic workload compared to your university back home? Thus far, I find the academic difficulty to be lower compared to Tilburg University. While the overall workload may be slightly higher due to the numerous weekly assignments, the complexity of the material is noticeably less challenging. Additionally, I expect that the workload at the end of the semester will be lighter compared to what I experience at home, particularly since not all courses conclude with a final exam. What aspects of American culture have you found most surprising or interesting? Many aspects of American culture have aligned with my expectations. For example, the presence of the marching band and the prominence of athletes on campus are very much part of the experience. Additionally, most students dress quite casually. It’s common to see athletes wearing sports attire or t-shirts representing their respective sports. And don’t be surprised to see people wearing pajamas on campus. Especially in the dining hall when getting food. The most surprising thing is that there is not really a drinking culture at this university. Since the legal drinking age in the U.S. is 21, all university-sponsored activities are alcohol-free. In my opinion, as well as that of a few other European students, this made some of the orientation activities feel somewhat bland or less engaging. This is the downside of studying at a small university, because I would have loved to see and experience how that is. Moreover, there aren’t really any clubs or good bars in this town. Additionally, the town itself lacks vibrant nightlife, with very few clubs or bars available. What challenges have you faced while adapting to life in the USA? The biggest challenge I have encountered is meeting new people. So far, I have primarily connected with other international students, as they tend to be more open and approachable compared to American students. I was also somewhat unfortunate in that all of my classes were transitioned to an online format. Due to low enrollment in the face-to-face versions—typically only two or three students—professors opted to conduct the courses entirely online. This has made it more difficult to engage with others and build connections. However, this issue seems specific to MBA courses, where many students are slightly older and working full-time. For the four other exchange students taking undergraduate courses at the university, all classes are still held on campus. Fortunately, the university organizes several weekly activities, including shopping trips, hiking excursions, yoga, dance classes, and more. These events provide some opportunities to meet new people and foster connections. What skills or lessons have you learned that you didn’t expect to gain from this experience? One thing I’ve come to appreciate more is the public transportation and infrastructure in the Netherlands. In Winchester, commuting is quite challenging. It is evident that America is designed with car ownership in mind. There are few footpaths, and in some areas, they abruptly stop, making it difficult to walk to places like grocery stores or shops. For example, while there is a gas station nearby, the closest grocery store is a 20- to 25-minute walk. Additionally, most stores here are surrounded by large parking lots, which means you have to navigate through several of them when moving from shop to shop. This makes getting around without a car quite inconvenient. Luckily, since I have a meal plan, I don’t really need to buy a lot of things. Have you had any moments of homesickness? How did you cope with that? I did have a brief moment of regret after arriving. This feeling was mainly due
An overview of differences between Dutch Accounting Standards and IFRS
1. Overall Approach There are fundamental differences in the overall approach between sets of accounting standards. The first fundamental difference is whether accounting standards are principles-based. Principles-based accounting standards are developed based on specific principles or objectives that govern financial reporting that is ‘useful’ to decision makers. For instance, the matching principle that expenses be matched with revenues. Rules-based standards are the counterpart of principles-based accounting standards. Although rules-based standards are based on principles, they include more exceptions to these principles and more detailed implementation guidance. Both IFRS and DAS are considered principles-based accounting standards. Perhaps driven by the litigious environment in the USA, USGAAP is believed to be more rules-based. A perceived benefit of rules-based standards is greater comparability of financial statements (Schipper, 2003). Another fundamental difference is the option to deviate from the set of accounting standards. Deviation from a set of accounting standards being applied is commonly referred to as true-and-fair-view-override (TFVO). The essence of accounting standards is providing guidance in a way that reflects economic reality and provides a true and fair view. Under IFRS the TFVO is only permitted in extremely rare circumstances to achieve a true and fair view. IFRS than requires specific disclosures with respect to the TFVO. Departure from DAS is required (!) if necessary to provide a true and fair view and there is no requirement to disclose this departure. Under DAS the TFVO is required whereas under IFRS it is almost forbidden. Absent the requirement to disclose deviation from DAS it is difficult to quantify the use of the TFVO to assess whether this is actual difference between DAS and IFRS (de facto difference) or whether this is merely a difference ‘on paper’ (de jure difference). Early research on the implementation of TFVO across EU member states in Europe shows that only 10 out of 400 listed companies across Europe used TFVA (van Hulle, 1997, p. 716). Research on listed firms reporting under UKGAAP, with a similar TFVO as DAS, substantiates its limited use (Livne and McNickols, 2009). Livne and McNickols (2009) attribute this limited use in part to the high cost involved. For instance, litigation cost, conflict with auditors, and scrutiny by analysts and institutional investors. 2. Strictness Specific accounting standards with a set of accounting standards generally address the following issues: recognition and measurement of transactions, presentation, and disclosure. Recognition/ measurement pertain to when a transaction has to be recognised (derecognised) on (from) the primary overviews. Primary overviews are the statement of financial position (balance sheet), the (comprehensive) income statement, the statement of changes in equity, and the cash flow statement. For instance, IFRS requires that when financial instruments are being recognised on the balance sheet they are measured at fair value. Presentation is where and how transactions need to presented on in the primary overviews. For instance, IFRS requires the comprehensive income statement to minimally consist of a number of defined items. Disclosure requirements are additional disclosures in notes on specific transactions presented on the face of the primary overviews. For instance, IFRS and DAS require a movement schedule of tangible fixed assets that includes investments, divestures, and depreciation. Several detailed comparisons have been made between IFRS and DAS (e.g. Ernst & Young, 2013; Deloitte, 2013). One way of comparing differences between sets of accounting standards is by their strictness. Based upon the Ernst & Young (2013) publication I present an overview of differences in strictness of DAS and IFRS.[1] From this table it follows that IFRS is stricter in 241 requirements compared to 111 requirements were DAS is stricter. In 80 requirements IFRS and DAS are contradictory. These differences will be discussed per topic below. Table 1. Differences between DAS and IFRS Issues IFRSstricter DASstricter IFRS and DAS contradictory Total Presentation 33 53 15 101 Recognition and Measurement 152 30 65 247 Disclosure 56 28 0 84 Total Differences 241 111 80 432 This table is based on the 2013 Ernst & Young publication: Vergelijking IFRS met Nederlandse wet- en regelgeving. 2.1 Presentation Contrasting the notion that IFRS is overall stricter, DAS is stricter with respect to the presentation of primary overviews. This is not surprising. Under DAS there are specifically defined sets of primary overviews. IFRS does not provide specific guidance for the presentation of the primary overviews. IFRS merely states the minimum required items in the primary overviews and includes the requirement that additional items are required when it is relevant to the understanding of the entity’s financial position or performance. Another general difference is that IFRS requires 2 years of comparative information on the statement of financial position. In table 2, I present a breakdown of the differences between IFRS and DAS per topic. The table shows that especially equity and financial instruments are topics with significant differences between DAS and IFRS. Especially presentation of items within equity is strictly defined under DAS. For instance, this refers to legal reserves to restrict dividend pay-out to equity holders of unrealised gains to avoid expropriation of debt holders by equity holders. With respect to the presentation of financial instruments IFRS is stricter and is related to for instance detailed guidance on the classification of a financial instrument as debt or equity. 2.2 Recognition and Measurement Given that most differences between sets of accounting standards are related to recognition and measurement, most professional publications focus thereon. Areas with major differences between IFRS and DAS are fixed assets and impairments, financial instruments, investments and consolidation, and business combinations. Derivative financial instruments under IFRS are in principle measured at fair value whereas under DAS it is a policy choice to measure them either at book value of fair value. With respect to fixed assets there are for instance differences how to account for goodwill. Under IFRS goodwill is not depreciated whereas under DAS it is a policy choice how to account for goodwill (depreciation, recognition in equity, recognition in the profit & loss). Also, goodwill and other intangible assets that are not depreciated have to be tested