\\n\\n
Released this past November, the list is based on data collected from the Web of Science and highlights some of the world’s most influential scientific minds by naming the researchers whose publications over the previous decade have included a high number of Highly Cited Papers placing them among the top 1% most-cited.
\\n\\nWe wish to congratulate all of the researchers named and especially our authors on this amazing accomplishment! We are happy and proud to share in their success!
Note: Edited in March 2021
\\n"}]',published:!0,mainMedia:{caption:"Highly Cited",originalUrl:"/media/original/117"}},components:[{type:"htmlEditorComponent",content:'IntechOpen is proud to announce that 191 of our authors have made the Clarivate™ Highly Cited Researchers List for 2020, ranking them among the top 1% most-cited.
\n\nThroughout the years, the list has named a total of 261 IntechOpen authors as Highly Cited. Of those researchers, 69 have been featured on the list multiple times.
\n\n\n\nReleased this past November, the list is based on data collected from the Web of Science and highlights some of the world’s most influential scientific minds by naming the researchers whose publications over the previous decade have included a high number of Highly Cited Papers placing them among the top 1% most-cited.
\n\nWe wish to congratulate all of the researchers named and especially our authors on this amazing accomplishment! We are happy and proud to share in their success!
Note: Edited in March 2021
\n'}],latestNews:[{slug:"intechopen-supports-asapbio-s-new-initiative-publish-your-reviews-20220729",title:"IntechOpen Supports ASAPbio’s New Initiative Publish Your Reviews"},{slug:"webinar-introduction-to-open-science-wednesday-18-may-1-pm-cest-20220518",title:"Webinar: Introduction to Open Science | Wednesday 18 May, 1 PM CEST"},{slug:"step-in-the-right-direction-intechopen-launches-a-portfolio-of-open-science-journals-20220414",title:"Step in the Right Direction: IntechOpen Launches a Portfolio of Open Science Journals"},{slug:"let-s-meet-at-london-book-fair-5-7-april-2022-olympia-london-20220321",title:"Let’s meet at London Book Fair, 5-7 April 2022, Olympia London"},{slug:"50-books-published-as-part-of-intechopen-and-knowledge-unlatched-ku-collaboration-20220316",title:"50 Books published as part of IntechOpen and Knowledge Unlatched (KU) Collaboration"},{slug:"intechopen-joins-the-united-nations-sustainable-development-goals-publishers-compact-20221702",title:"IntechOpen joins the United Nations Sustainable Development Goals Publishers Compact"},{slug:"intechopen-signs-exclusive-representation-agreement-with-lsr-libros-servicios-y-representaciones-s-a-de-c-v-20211123",title:"IntechOpen Signs Exclusive Representation Agreement with LSR Libros Servicios y Representaciones S.A. de C.V"},{slug:"intechopen-expands-partnership-with-research4life-20211110",title:"IntechOpen Expands Partnership with Research4Life"}]},book:{item:{type:"book",id:"3581",leadTitle:null,fullTitle:"Recent Optical and Photonic Technologies",title:"Recent Optical and Photonic Technologies",subtitle:null,reviewType:"peer-reviewed",abstract:"Research and development in modern optical and photonic technologies have witnessed quite fast growing advancements in various fundamental and application areas due to availability of novel fabrication and measurement techniques, advanced numerical simulation tools and methods, as well as due to the increasing practical demands. The recent advancements have also been accompanied by the appearance of various interdisciplinary topics. \r\n\r\nThe book attempts to put together state-of-the-art research and development in optical and photonic technologies. It consists of 21 chapters that focus on interesting four topics of photonic crystals (first 5 chapters), THz techniques and applications (next 7 chapters), nanoscale optical techniques and applications (next 5 chapters), and optical trapping and manipulation (last 4 chapters), in which a fundamental theory, numerical simulation techniques, measurement techniques and methods, and various application examples are considered. \r\n\r\nThis book deals with recent and advanced research results and comprehensive reviews on optical and photonic technologies covering the aforementioned topics. I believe that the advanced techniques and research described here may also be applicable to other contemporary research areas in optical and photonic technologies. Thus, I hope the readers will be inspired to start or to improve further their own research and technologies and to expand potential applications. I would like to express my sincere gratitude to all the authors for their outstanding contributions to this book.",isbn:null,printIsbn:"978-953-7619-71-8",pdfIsbn:"978-953-51-4568-4",doi:"10.5772/116",price:139,priceEur:155,priceUsd:179,slug:"recent-optical-and-photonic-technologies",numberOfPages:468,isOpenForSubmission:!1,isInWos:1,isInBkci:!0,hash:null,bookSignature:"Ki Young Kim",publishedDate:"January 1st 2010",coverURL:"https://cdn.intechopen.com/books/images_new/3581.jpg",numberOfDownloads:68935,numberOfWosCitations:99,numberOfCrossrefCitations:32,numberOfCrossrefCitationsByBook:2,numberOfDimensionsCitations:81,numberOfDimensionsCitationsByBook:3,hasAltmetrics:0,numberOfTotalCitations:212,isAvailableForWebshopOrdering:!0,dateEndFirstStepPublish:null,dateEndSecondStepPublish:null,dateEndThirdStepPublish:null,dateEndFourthStepPublish:null,dateEndFifthStepPublish:null,currentStepOfPublishingProcess:1,indexedIn:"1,2,3,4,5,6,7,8",editedByType:"Edited by",kuFlag:!1,featuredMarkup:null,editors:[{id:"12009",title:"Dr.",name:"Ki Young",middleName:null,surname:"Kim",slug:"ki-young-kim",fullName:"Ki Young Kim",profilePictureURL:"https://mts.intechopen.com/storage/users/12009/images/system/12009.jpg",biography:"Http://m80.knu.ac.kr/~doors",institutionString:null,position:null,outsideEditionCount:0,totalCites:0,totalAuthoredChapters:"0",totalChapterViews:"0",totalEditedBooks:"4",institution:{name:"National Cheng Kung University",institutionURL:null,country:{name:"Taiwan"}}}],equalEditorOne:null,equalEditorTwo:null,equalEditorThree:null,coeditorOne:null,coeditorTwo:null,coeditorThree:null,coeditorFour:null,coeditorFive:null,topics:[{id:"1226",title:"Optoelectronics",slug:"optics-and-lasers-optoelectronics"}],chapters:[{id:"6522",title:"Dual-Periodic Photonic Crystal Structures",doi:"10.5772/6904",slug:"dual-periodic-photonic-crystal-structures",totalDownloads:2558,totalCrossrefCites:0,totalDimensionsCites:0,hasAltmetrics:0,abstract:null,signatures:"Alexey Yamilov and Mark Herrera",downloadPdfUrl:"/chapter/pdf-download/6522",previewPdfUrl:"/chapter/pdf-preview/6522",authors:[null],corrections:null},{id:"6523",title:"Two-Dimensional Photonic Crystal Micro-Cavities for Chip-Scale Laser Applications",doi:"10.5772/6905",slug:"two-dimensional-photonic-crystal-micro-cavities-for-chip-scale-laser-applications",totalDownloads:2726,totalCrossrefCites:0,totalDimensionsCites:0,hasAltmetrics:0,abstract:null,signatures:"Adam Mock and Ling Lu",downloadPdfUrl:"/chapter/pdf-download/6523",previewPdfUrl:"/chapter/pdf-preview/6523",authors:[null],corrections:null},{id:"6524",title:"Anisotropy of Light Extraction Emission with High Polarization Ratio from GaN-based Photonic Crystal Light-Emitting Diodes",doi:"10.5772/6906",slug:"anisotropy-of-light-extraction-emission-with-high-polarization-ratio-from-gan-based-photonic-crystal",totalDownloads:3111,totalCrossrefCites:0,totalDimensionsCites:0,hasAltmetrics:0,abstract:null,signatures:"Chun-Feng Lai, Chia-Hsin Chao, and Hao-Chung Kuo",downloadPdfUrl:"/chapter/pdf-download/6524",previewPdfUrl:"/chapter/pdf-preview/6524",authors:[null],corrections:null},{id:"6525",title:"Holographic Fabrication of Three-Dimensional Woodpile-Type Photonic Crystal Templates Using Phase Mask Technique",doi:"10.5772/6907",slug:"holographic-fabrication-of-three-dimensional-woodpile-type-photonic-crystal-templates-using-phase-ma",totalDownloads:3052,totalCrossrefCites:2,totalDimensionsCites:3,hasAltmetrics:0,abstract:null,signatures:"Di Xu, Kevin P. 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Unfortunately solutions to differential equations can rarely be expressed by closed formulas and numerical methods are needed to approximate their solutions. There are many numerical methods for approximating the solution to differential equations including the finite difference (FD), finite element (FE), finite volume (FV), spectral, and discontinuous Galerkin (DG) methods. These methods are used when the mathematical equations are too complicated to be solved analytically.
The FE method has become the standard numerical scheme for approximating the solution to many mathematical problems; see [1, 2, 3, 4, 5, 6, 7, 8, 9] and the references therein just to mention a few. In simple words, the FE method is a numerical method to solve differential equations by discretizing the domain into a finite mesh. Numerically speaking, a set of differential equations are converted into a set of algebraic equations to be solved for unknown at the nodes of the mesh. The FE method originated from the need to solve complex elasticity and structural analysis problems in civil and aeronautical engineering. The first development can be traced back to the work by Hrennikoff in 1941 [10] and Courant in 1943 [11]. Although these pioneers used different perspectives in their FE approaches, they each identified the one common and essential characteristic: mesh discretization of a continuous domain into a set of discrete sub-domains, usually called elements. Another fundamental mathematical contribution to the FE method is represented by Gilbert Strang and George Fix [12]. Since then, the FE method has been generalized for the numerical modeling of physical systems in many engineering disciplines including electromagnetism, heat transfer, and fluid dynamics.
The advantages of this method can be summarized as follows:
Numerical efficiency: The discretization of the calculation domain with finite elements yields matrices that are in most cases sparse and symmetric. Therefore, the system matrix, which is obtained after spatial and time discretization, is sparse and symmetric too. Both the storage of the system matrix and the solution of the algebraic system of equations can be performed in a very efficient way.
Treatment of nonlinearities: The modeling of nonlinear material behavior is well established for the FE method (e.g., nonlinear curves, hysteresis).
Complex geometry: By the use of the FE method, any complex domain can be discretized by triangular elements in 2D and by tetrahedra elements in 3D.
Applicable to many field problems: The FE method is suited for structural analysis, heat transfer, electrical/magnetical analysis, fluid and acoustic analysis, multi-physics, etc.
COMSOL Multiphysics (known as FEMLAB before 2005) is a commercial FE software package designed to address a wide range of physical phenomena. It is widely used in science and industry for research and development. It excels at modeling almost any multi-physics problem by solving the governing set of PDEs via the FE method. This software package is able to solve one, two and three-dimensional problems. It comes with a modern graphical user interface to set up simulation models and can be scripted from Matlab or via its native Java API.
In this chapter, we introduce the FE method for several one-dimensional and two-dimensional model problems. Although the FE method has been extensively used in the field of structural mechanics, it has been successfully applied to solve several other types of engineering problems, such as heat conduction, fluid dynamics, seepage flow, and electric and magnetic fields. These applications prompted mathematicians to use this technique for the solution of complicated problems. For illustration, we will use simple one-dimensional and two-dimensional model problems to introduce the FE method.
We first present the FE method as an approximation technique for solving the following first-order initial-value problem (IVP) using piecewise linear polynomials
In order to apply the FE method to solve this problem, we carry out the following process.
Derive a weak form (variational formulation). This can be done by multiplying the ODE in (1) by a test function
Generate a triangulation (also called a mesh) of the computational domain
Define a finite dimensional space over the triangulation: Let the solution
Define the FE space as the set of all continuous piecewise linear polynomials
We remark that any function
Construct a set of basis functions based on the triangulation. Since
A continuous piecewise linear function
There are infinite number of sets of basis functions. We should choose a set of basis functions that are simple, have compact (minimum) support (that is, zero almost everywhere except for a small region), and meet the regularity requirement, that is, they have to be continuous, and differentiable except at nodal points. The simplest ones are the so-called hat functions satisfying
Approximate the exact solution
This type of FE method (with similar trial and test space) is sometimes called a Galerkin method, named after the famous Russian mathematician and engineer Galerkin.
since
A typical hat function
Finally, we solve the linear system for
However, for
Similarly, for
We next calculate
Thus, we obtain the following linear system of equations
The determinant of the above matrix is
Finally, we solve the linear system for
Following the same steps used for the case
Here, we extend the FE method for the nonlinear IVP using piecewise linear polynomials
The FE method consists of finding
Writing
where
Let
Similarly,
Using Simpson’s Rule
However, for
Next, we compute the Jacobian matrix with entries
We already computed the entries
Using Simpson’s Rule, we get
Here, we shall study the derivation and implementation of the FE method for two-point boundary-value problems (BVPs). For easy presentation, we consider the following model problem: Find
where
The model problem (3) can be reformulated into three different forms:
(D)-form: the original differential equation (3).
(V)-form: the variational form or weak form:
(M)-form: the minimization form:
Under some assumptions, the three different forms are equivalent, that is, they have the same solution as will be explained in the following theorem.
(D) is equivalent to (V), (V) is equivalent to (M), and (M) is equivalent to (D).
To solve (3) using the FE method, we carry out the process described below. Usually, a FE method is always derived from the weak or variational formulation of the problem at hand.
since
We want to find
If
Conversely, if
Existence and uniqueness of weak solutions is obtained by the Lax-Milgram Theorem.
We can consider solutions with lower regularity using the weak formulation.
FE method gives an approximation of the weak solution.
From now on, we use the notation
The matrix
It is natural to obtain an approximation
We call
It is easy to show that
Let
The explicit expressions for the hat function
for
We call
It can be shown that (6) is equivalent to the
where
We can use either the weak/variational form (V), or the minimization form (M), to derive a linear system of equations for the coefficients
Substituting (8) into (7) yields
The problem (7) is now equivalent to the following: Find the real numbers
We note that the linear system (9) is equivalent to the system in matrix–vector form
where
and
To obtain the approximate solution we need to solve the linear system for the unknown vector
The Ritz method is one of the earliest FE methods. However, not every problem has a minimization form. The minimization form for the model problem (3) is
As before, we look for an approximate solution of the form (8). If we plug this into the functional form above, we get
which is a multi-variable function of
Exchange the order of integration and the summation, we get
which is exactly the same linear system (9) obtained using the Galerkin method.
It is straightforward to calculate the entries
Furthermore, if
By symmetry, we also have
To obtain
So, we can easily verify that
where
Finally, we obtain the following system:
Finally, we obtain the following system:
which is the same system obtained using the finite difference method, where
Next, we state a general convergence result for the Galerkin method. We first define the following norm and semi-norm: For
where
Next, we study the convergence of
Since
This inequality suggest that the error between
where
If the partition is not uniform then we obtain the same error estimate with
The error is expressed in terms of the exact solution
The norm
In problem (3) we considered a homogeneous Dirichlet boundary conditions. Here, we extend the FE method to boundary conditions of different types. There are three important types of boundary conditions (BCs):
Dirichlet BCs:
Neumann BCs:
Robin BCs:
Note that any combination is possible at the two boundary points.
where
since
Let
It can be shown that (17) is equivalent to the
Expanding
where the coefficients
Substituting (19) into (18) yields
which is a
where
For simplicity we assume the partition is uniform so that
It is straightforward to calculate the entries of the stiffness matrix. For
where we have used that
Changing
Thus the stiffness matrix is
The entries
We note that
where
Multiplying (23) by a function
Since
Hence, the weak or variational form of (23) reads: Given
The FE space
with
Let us consider the following two-point BVP: find
where
Multiplying (26) by a function
We gather all
The FE method consists of finding
which is a
and
Let for simplification
Let
and its subspace
where
with
Figure 3 shows the global shape functions for the space
(left) global shape functions for the space
where
with
The variational formulation of the internal approximation of the Dirichlet BVP (3) consists now in finding
Here, it is convenient to introduce the notation
where
where
and load vector
Since the shape functions
Hence, the shape functions can be reduced to only three basic shape functions (Figure 3):
Their respective derivatives are
This approach consists in considering all computations on an interval
In this case, the elementary contributions of the element
Thus, the problem is reduced to computing the integrals
Consider the following two-point BVP: find
where
Multiplying (29) by a function
Hence, the weak or variational form of (29) reads: Given
Let
The FE method scheme consists of finding
Introduce the notation
where
where
and the load vector
Clearly, the only extra terms are given in the vector with entries
Suppose
Here, we apply the FE method for two-dimensional elliptic problem: Find
where
Let
Let
This means that triangle
The Delaunay algorithm determine a triangulation with the given points as triangle nodes. Delaunay triangulations are optimal in the sense that the angles of all triangles are maximal.
Matlab has a built in toolbox called PDE Toolbox and includes a mesh generation algorithm.
Let
Now let
This is solvable due to
where
Let
Solving the systems, we get
Let
Functions in
Given
in particular
where
Now, we consider the piecewise continuous interpolant
where
Let
The problem of finding
where
Since
The problem can be expressed as a linear system of equations
In general, we use a quadrature rule to approximate integrals. The general form is
where the
The FE method was designed to approximate solutions to complicated equations of elasticity and structural mechanics, usually modeled by elliptic type equations, with complicated geometries. It has been developed for other applications as well.
Consider the following two-dimensional elliptic problem: Find
where
In order to derive the weak formulation, we multiply (31) with
We obtain the weak form: Find
We can formulate the method as in the 1D case by using the weak formulation (32). The FE method in 2D is defined as follows: Find
where
This gives us the system
where
In general we have
Furthermore, we obviously have
where
Given
Consider the following Dirichlet Problem: Find
where
So the weak problem reads: Find
Assume that
Assume that we have
where
Consider the following Neumann Problem: Find
where
Thus, the variational formulation reads: find
In order to guarantee solvability, we note that if
Therefore we need to assume the following compatibility condition
to ensure that a solution can exist. Note that if
which contains only functions with a zero mean value. This is a called a quotient space. This space guarantees a unique weak solution (with weak formulation as usual with test functions in
Now, the FE method takes the form: find
where
Here we describe briefly how Neumann conditions are handled in two-dimensional finite elements. Suppose
where
Multiplying (36) by a test function
since
We now restrict our discussion once more to two-dimensional polygonal domains. To apply the FE method, we must choose an approximating subspace of
A basis for
In a two-dimensional problem, inhomogeneous boundary conditions are handled just as in one dimension. Inhomogeneous Dirichlet conditions are addressed via the method of shifting the data (with a specially chosen piecewise linear function), while inhomogeneous Neumann conditions are taken into account directly when deriving the weak form. Both types of boundary conditions lead to a change in the load vector.
The method of shifting the data can be used to transform an inhomogeneous Dirichlet problem to a homogeneous Dirichlet problem. This technique works just as it did for a one-dimensional problem, although in two dimensions it is more difficult to find a function satisfying the boundary conditions. We consider the BVP
where
Suppose we find a function
and
Finally, the solution
We now describe a method for computing a function
A direct calculation shows that
We then define
We have thus replaced each
Finally, we define
The reader should notice how the second term interpolates between the boundary values on
We can also apply the technique of shifting the data to transform a BVP with inhomogeneous Neumann conditions to a related BVP with homogeneous Neumann conditions. However, the details are somewhat more involved than in the Dirichlet case. Consider the following BVP with the Neumann conditions
where
We make the following observation: If there is a twice-continuously differentiable function
which together imply that
We will assume that (41) holds.
We now explain how to compute a function that satisfies the desired Neumann conditions. The method is similar to that used to shift the data in a Dirichlet problem: we will “interpolate” between the Neumann conditions in each dimension and arrange things so that the two interpolations do not interfere with each other. We use the fact that
The first step is to transform the boundary data
We can satisfy these conditions with a function of the form
If
We can now define
Then
Consider the following Eigenvalue Problem: Find
In order to derive the weak formulation, we multiply (43) with
We obtain the weak form: Find
The FE method in 2D is defined as follows: Find
where
This leads to an algebraic system of the form
Consider the following model Problem: Find
The weak form: Find
The FE approximation is defined as follows: Find
where
This leads to system of the form
Now, let
There are two different kinds of error estimates,
Consider the following convection-diffusion problem: Find
We seek a weak solution
Note that there is no need to apply Green’s formula to
The FE method in 2D is defined as follows: Find
where
This gives us the system
for
Consider the following heat/diffusion problem: Find
We seek a weak solution
The weak form therefore reads: Find
The semi-discrete FE method in 2D is defined as follows: Find
where
This gives us the system of ODEs
where
Finally, the system of ODEs can be solved with
where
Many physical phenomena exhibit wave characteristics. For instance light which is an electromagnetic wave have the ability to disperse and create diffraction patterns, which is typical of waves.
Consider the following wave problem: Find
where
We seek a weak solution
The weak form (variational formulation) therefore reads: Find
Let
This gives us the system
where
Eq. (58) is a semi-discretization of the wave equation in the sense that it does not contain any unknowns with spatial derivatives.
Let
Finally, the system of ODEs can be solved with
where
There are several possible choices of initial data. We can either use
We can also use Crank–Nicolson scheme
In this chapter, we introduced the finite element (FE) method for approximation the solutions to ODEs and PDEs. More specifically, the FE method is presented for first-order initial-value problems for OEDs, second-order boundary-value problems for ODEs, second-order elliptic PDEs, second-order heat and wave equations. The remaining chapters of this textbook are based on the FE method. The derivation of the FE method for other problems is straightforward. In the remaining chapters, the FE method will developed to solve complicated problems in engineering, notably in elasticity and structural mechanics modeling involving elliptic partial differential equations and complicated geometries. For more details, we refer the reader to [1, 2, 3, 4, 6, 7, 8, 9] and the references therein.
National accounting standards have historically been developed by each nation or by a cluster of nations for the entities that reside within their accounting judiciaries [1, 2]. These standards are typically designed to meet specific national needs [3]. However, in the past few decades, there has been a global trend of international harmonization of accounting standards, with many countries having either partially or completely replaced their national accounting standards with the International Financial Reporting Standards (IFRS) [4, 5]. As profiled by the International Accounting Standards Board (IASB) in 2019, over 140 jurisdictions in all major regions in the world (Figure 1) have either required or permitted IFRS usage for their domestic publicly accountable entities [6]. Such a massive adoption of a single set of accounting standards worldwide may represent the most significant accounting regulatory change in recent years [7].
IFRS adoption by region. Source: IFRS Foundation 2019.
The IFRS can be defined as a single set of accounting standards that are intended to be consistently and globally applied—that is, to be used by developed, transitional, and emerging economies alike [8]. The IFRS are intended to provide investors and other users of financial statements with the ability to compare the financial performance of publicly listed companies on a like-for-like basis with the companies’ international peers. Conceptually speaking, adopting a single set of global accounting standards is undeniably appealing. In theory, global standards would remove the barriers that hinder investors when comparing the accounting information of companies from different nations, while simultaneously reducing the transaction costs for firms [9, 10, 11]. Empirical studies have confirmed that IFRS adoption has (to a certain degree) increased the compatibility of financial statements across national borders, and that the IFRS have achieved many of the goals they were intended to reach [1, 7, 12, 13].
However, despite the economic benefits of the IFRS and their apparent support by the great majority of countries, research has shown that national IFRS adoptions are difficult and problematic [14, 15, 16]. One major issue is that countries do not adopt IFRS to the same extent. Nobes and Zeff [17] show that some countries adopt the IFRS as issued by the IASB, while others claim that their own national GAAP are “based on” or “similar to” the IFRS—when, in fact, large differences remain. According to an extensive report compiled by Deloitte [18], it is also common for countries to claim that they have “adopted” the IFRS while choosing to deviate or not to include certain provisions from the IFRS as issued by the IASB. In addition, despite the great number of countries that have adopted IFRS, the three largest economies in the world—the United States, China, and Japan—have not yet fully accepted the IFRS into their national reporting standards, even for listed companies [6].
Thus, it is debatable whether international accounting harmonization is indeed as successful as it seems to be [19]; in fact, it may be just a veneer over continued national differences [15, 20]. Users of financial information should be aware that IFRS do not necessarily carry the same implications throughout the world [16], despite the IASB’s intentions. Some scholars warn that, if the IFRS are not adopted to the same extent around the world, the central purpose of international standards will be compromised, as foreign investors will be unable to be confident when reading financial statements [15, 17]. Uneven IFRS adoption could even be harmful to investors who believe that accounting standards have been converged worldwide—when, in fact, financial reporting differences continue to exist across national borders while being covered under the façade of the IFRS.
IFRS adoption is a complex and multi-level governance process (Figure 2) [2, 21]. After being promulgated by the IASB, IFRS adoption occurs at both the
Multi-tier IFRS adoption.
It is important to recognize that firm-level IFRS adoption is conditional on countries’ decisions to allow or mandate IFRS in an adoption process [23]. Many countries first voluntarily adopt IFRS at the national level, and then write the standards into the local GAAP, which then become mandatory at the firm level. It has been shown that countries have adopted IFRS unevenly [18], so differences in countries’ IFRS adoptions already exist at the national level before trickling down to the firm level [5, 24, 25]. As most domestically listed firms must comply with the national GAAP or regulations, instead of directly complying with IFRS, they may have no choice but to deviate from the IFRS, as issued by the IASB [7, 26, 27, 28].
Financial accounting research is often loaded with special concepts, both technical and theoretical, that bear specific meanings that either clarify for or further confuse readers. This issue is manifested in international accounting due to the scope of diversity in accounting traditions. Some of the important concepts in this field have been unclearly used or defined. Many employ these concepts, but few define them. In addition, certain concepts are often treated as interchangeable, even though they do not represent precisely the same thing. This is perhaps inevitable for a subject as complex as IFRS. Nevertheless, to better understand international accounting harmonization, it is necessary to clarify these embedded meanings, since different usages may tilt discussions in somewhat different directions. It is also important to note that there is no strict “right” or “wrong” definitions of these terms, as important and evolving concepts can hardly be expected to have clear-cut definitions. Rather, the purpose of the effort is to note blurred or unclear definitions and introduce some clarity to the extent that has been identified in IFRS literature.
A dichotomy exists in the accounting literature in regard to what is meant by the term “international accounting system” and how it should be approached. One approach defines “accounting system” at the national level. For example, Gray [29] states that a country’s accounting system constitutes various national characteristics, such as the structure and development of capital markets, legal requirements, professional accounting standards, and tax law. Similarly, Doupnik and Salter [30] believe that the international accounting system resides in national legislature. By contrast, other authors regard an accounting system as a firm-level practice. For instance, Nobes [31] defines an accounting system as “a set of practices used in a published annual report.” Commenting on the difference in the two approaches, Nobes [31] argues that, although there is a formal set of rules or systems at the legislature level, companies sometimes choose to depart from these rules. According to Nobes, the advantage of using the firm-level definition, although it is admittedly narrow, is that this definition can actually have wider empirical implications.
An important conceptual distinction must be understood between the
The terms “convergence” and “adoption” have recently come into use as nations attempt to narrow the gap between their national accounting standards and the IFRS. It is important to note that convergence is not equivalent to adoption [5, 15]. The differences between these two concepts have set off a great deal of debate within the field of international accounting research. Nobes [35] argues that, in order to be called adoption, relevant entities must state that their financial statements are in full compliance with the IFRS as issued by the IASB. Thus, at the country level, “adoption” should mean that the national set of accounting standards is directly replaced by the IFRS as issued by the IASB. This position is taken by the Member States of the EU, which have fully applied the IFRS since 2005. By comparison, “convergence” is the gradual mechanism of changing local accounting standards into IFRS. Although it does not mean full adoption, convergence can indicate only a minimal difference between a nation’s standards and the IFRS [36]. According to the IASB’s position, convergence will not, by definition, lead to a common set of global standards. Nevertheless, convergence has been and will likely remain a useful process to facilitate adoption by narrowing differences. Thus, convergence should be a means of making the transition to the full adoption of IFRS standards, and not an end in itself [37]. By the same token, Zeff and Nobes [38] emphasize that convergence is a dynamic process of consistency with IFRS in accounting principles and substance, which is neither a direct adoption of IFRS nor a word-for-word translation of IFRS. Rather, convergence is the act of moving towards uniformity. Zeff and Nobes use China and Venezuela as examples of countries that use the IFRS as a starting point for drafting national standards, but then diverge significantly from the IFRS as issued by the IASB. Some countries that have “converged” with the IFRS are nonetheless counted by the IFRS Foundation and by others as adopters of the IFRS, which—according to Zeff and Nobes [38]—is misleading.
In the same vein, Ball [15] notes that convergence is “the process of narrowing the differences between IFRS and the accounting standards of countries that retain their own standards.” Convergence is a modified version of adoption in which multiple sets of rules or practices are the same [5]. Therefore, the relation between convergence and adoption is not dichotomous. These two concepts represent the subtleties of the development and diffusion of IFRS at various stages. Following this logic, Nobes [35] states that the word “convergence” is more correct when applied to the joint program of the IASB and the United States’ Financial Accounting Standards Board (FASB), because both have changed particular standards to match each other’s, and the IASB and FASB have run many joint projects. In the case of other countries, however, convergence with the IFRS is a euphemism for the piecemeal adoption of IFRS [35].
Standardization and harmonization are often used interchangeably in IFRS studies. However, the difference between them should not be ignored [39]. Standardization implies a movement towards uniformity, whereas harmonization is a movement away from total diversity [32]. In the context of International Accounting Standards (IAS), McLeay et al. [39] suggest that “whilst international standardization implies a movement towards global uniformity, harmonization implies a movement towards similarity in the choice between alternative accounting treatments.” They define international standardization as a process that constrains choice, ultimately resulting in the adoption of the same accounting method by all firms and all countries. International accounting harmonization, on the other hand, is a process that results in a systematic choice between accounting methods across national borders [39]. Such choices are dependent upon the nature of the nation or firm and its operating environment, but are otherwise independent of the location in which the nation or firm happens to be registered [39]. Similarly, Canibano and Mora [33] argue that harmonization is a more realistic and conciliatory approach than standardization, and is also more attainable and less rigid. However, other scholars disagree. For instance, Arnold [40] believes that harmonization is equivalent to standardization. That is, according to Arnold, accounting harmonization equates to the standardization of financial reporting standards, auditing standards, and/or other accounting-related rules and regulations such as licensing and qualification requirements or ethics rules.
It has been argued that the international harmonization of accounting standards is a result of the economic integration and increasing trading between national borders [41]. In addition, corporate economic scandals have shaken investors’ trust in financial reporting. To regain both inventors’ trust and economic order, it has become necessary to strengthen the comparability and transparency of financial reporting across national borders [8].
Economic globalization and integration form an important context in which national IFRS adoption has become not only necessary, but also urgent [9, 42]. Economic globalization has created a new common ground for businesses to engage in trade and transactions across national borders [41]. In this new “game,” certain common rules must be understood and followed by all participants to ensure a functional trading place. As the vice chairman of IASB, Ian Mackintosh comments:
It is increasingly difficult to see different and often incompatible national accounting standards as anything other than a legacy of a bygone era. They add cost, complexity and translation risk to companies and investors operating in today’s global marketplace [43].
According to the IASB, about one third of all financial investments in the world are international transactions. It is essential for differences in national accounting standards to be eliminated, or at least understood by all players. Thus, it is necessary for national accounting standard-setters to change their existing national accounting systems in order to facilitate international economic changes, assuming that a growing economy is part of the national plan. Global standards are achievable and an inevitable consequence of continued economic globalization. As stated on the IASB website:
This [globalization] evidence indicates that global standards are both desirable, achievable and inevitable. As economic globalization continues apace, so too will the force of the arguments in favor of IFRS adoption within those remaining jurisdictions [44].
In addition to global economic integration, the accounting scandals in the early 2000s that brought down large multinational corporations (MNCs) such as Enron and Arthur Anderson have increased investors’ awareness of the importance of trustworthy accounting standards. Furthermore, in the summer of 2007, accumulating losses on U.S. subprime mortgages triggered widespread disruption to the global financial system. In less than a year, the situation developed into an international financial crisis and eventually resulted in a global economic downturn that further shook investors’ confidence in the stock market. As stated on the IASB website:
Post-crisis, policymakers are all too aware of how every national capital market in the world, even the largest, functions as little more than a satellite of the global financial system [43, 44].
To reestablish confidence in the soundness of markets and financial institutions, as well as to prevent further crises, the G201 summit in Washington on November 15, 2008, produced a thorough analysis and summary of the root causes of these crises and put forward action plans that included improving the IASB’s governance and supporting the IFRS as the single set of high-quality global accounting standards. Both national and international organizations developed recommendations and resources aimed at promoting the IFRS. The G20 called on the IASB and the Financial Accounting Standards Board (FASB) in the US to improve standards on valuation and provisioning and to achieve a single set of accounting standards. The G20 summit in London in April 2009 further required proactive collaboration from member countries on convergence with the IFRS in order to prevent similar financial crises. In the same year, the G20 formed the special Financial Crisis Advisory Group (FCAG). The FCAG supports the IASB in promoting the IFRS to be the single set of global accounting standards in order to reestablish investors’ confidence in accounting information.
However, the G20 has never required countries to fully adopt the IFRS. Instead, it encourages its members to converge with the IFRS. The IASB does not agree with this position and has expressed on multiple occasions that only full adoption of IFRS, not convergence with IFRS, can ensure global financial stability and prevent similar financial crises. According to the IASB, the G20 and its various committees, while pushing the diffusion of IFRS, have frequently focused on national interests, which can create barriers and impediments to economic growth and jeopardize global financial stability. As the chairman of the IASB remarked:
This inability to deliver compatible outcomes with the FASB clearly demonstrates the inherent instability of convergence as a means to achieve a single set of global accounting standards. For this reason, our Trustees wisely concluded that convergence can never be a substitute for adoption of IFRS. Thankfully, throughout the financial crisis, the momentum towards adoption has continued unabated in many countries [44].
Despite this disagreement from the IASB, the G20—which promoted the IFRS in the past due to the financial crisis—has recently been less enthusiastic. Support for the work of the IASB has been decreasing. For example, in the past, the communiqués had always included a paragraph such as this:
We underline the importance of continuing work on accounting standards convergence in order to enhance the resilience of the financial system. We urge the International Accounting Standards Board and the US Financial Accounting Standards Board to complete by the end of 2013 their work on key outstanding projects for achieving a single set of high-quality accounting standards [45].
However, the newest communiqués issued after the meeting of the G20 in 2014 and thereafter no longer contain a call for converged accounting standards.
The formal history of the IASB began with the International Accounting Standards Committee (IASC). In 1973, the IASC was jointly established by professional accounting bodies in Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom, Ireland, and the United States. Between 1973 and 2001, the IASC issued IAS. The IASC was essentially a structure, rather than a committee in the traditional sense of a group of people. The IASC originally had a goal of “harmonization” by reducing differences between accounting standards in major capital markets. By the 1990s, however, the IASC reshaped its goal into “convergence,” which, according to the organization, is a step above harmonization. The convergence concept is to develop a “single set of high-quality, international accounting standards that would be used in at least all major capital markets.” In 1995, The IASC and the International Organization of Securities Commissions (IOSCO) agreed on what constituted a comprehensive set of core standards. The IASC undertook a project to complete those core standards by 1999. The IOSCO agreed that, if it found these core standards acceptable, it would recommend the endorsement of IASC standards for cross-border capital and listing purposes in all capital markets [46]. In May 2000, the IOSCO completed its assessment and accepted the IASC’s core standards. Members of the IOSCO were encouraged to use the IASC standards to prepare their financial reporting for international offerings and listings, supplemented where necessary to address outstanding substantive issues at a national or regional level, or to use waivers of particular aspects of the IASC standards without requiring further reconciliation under exceptional circumstances [47].
In 1997, after nearly 25 years of existence, the IASC concluded that, in order to continue to bring about convergence between national accounting standards and practices and high-quality global accounting standards, it had to find a better way to perform its role effectively. To do so, the IASC saw a need to change its structure. The standard-setting body was thus renamed as the IASB. Formally, the IASB is a private standard-setting organization based in London. It operates under the IASC Foundation, which is more widely known as the IFRS Foundation. The IASB is primarily funded by fundraising activities, which are the responsibility of the IFRS Foundation. The governance, oversight, and standard-setting processes of the IASB are similar to those of the FASB in the United States. The IASB has 14 board members (including a chair and a vice chair) with a variety of functional backgrounds and from different continents. The currently sitting IASB Chair is Andreas Barckow. The primary purpose of the IASB is to promulgate IFRS. It is committed to the mission of developing a single set of high-quality, understandable, and enforceable global accounting standards and working with national standard-setters to achieve accounting standards convergence. The IASB has inherited 25 standards issued by the IASC, covering various issues. Because the IAS standards were essentially distillations of existing accounting practices used around the world, they often allowed alternative treatments for the same transactions. The IASB decided to undertake a comparability and improvement project to reduce the number of allowable alternatives and make the IFRS standards more prescriptive than descriptive [48].
Although IFRS have now been accepted by the majority of countries around the world, their initial acceptance by national accounting standard-setters and firms was not as smooth as many might think. The process began in the 1970s, and it took a long time for the IFRS to gain worldwide recognition.
Prior to the first major wave of IFRS adoption among the European countries in 2005, there was a great deal of debate about the relevance and feasibility of implementing a single set of accounting standards worldwide. During this time, national and international standard-setters tried to understand how the globalization of the economy had influenced countries’ acceptance of IFRS; they also tried to identify key factors or obstacles that could affect a nation’s capacity for adoption and willingness to adopt. In this process, there were concerns that, even if countries or firms chose or were required to adopt IFRS, they might not be ready and might apply IFRS differently, creating a bigger problem than before. The KPMG issued a survey of 149 accounting professionals showing that there was general concern that uncertainty over the applicability of IFRS among EU companies had delayed the voluntary IFRS adoption of many [49]. Similarly, the Institute of Chartered Accountants in England and Wales (ICAEW) raised concerns regarding the lack of preparation for the introduction of IFRS. The ICAEW conducted a survey among its members asking whether they would, if given the choice, move to IAS. Only over a third of the businesses said that they would be likely to move to IAS. The ICAEW concluded that tardy preparation for IFRS adoption by some firms could cause them to receive qualified audit opinions upon IFRS adoption [50].
Another concern was the feasibility of implementing an Anglo-Saxon accounting model into other social contexts. Some observers have regarded international accounting harmonization as predominantly implying compliance with an Anglo-Saxon accounting model [51], and contend that the international accounting standards agenda of the IASB is a means of imposing an Anglo-American hegemony. Such a contention was somewhat evident in the 1990s, when the staffing complement of the IASB was dominated by Anglo-Americans. For example, even though the ASEAN Federation of Accountants (AFA) had sought a greater level of representation and participation by Asian nations in the deliberations of the IASC, prior to 1995, only Malaysia and Singapore out of the ASEAN AFA member countries had been represented on working committees. Setting aside the achievability of global standardization, Dye and Sunder [52] also question whether having a single global set of accounting standards is even desirable. They argue that there were several benefits in allowing firms to follow either IFRS or the U.S. GAAP, and contend that competitions among standard-setters can help to meet the needs of globalization and increase the efficiency of accounting standards.
Despite the skepticism in the early stage of IFRS harmonization, during the push for the internationalization of accounting standards, the accounting differences between IFRS and other major national accounting standards, such as the U.S. GAAP, were narrowing [53]. In the late 1990s, some countries began to allow voluntary adoption of IFRS. For example, in 1998, the law §292a HGB was passed in Germany, permitting German listed companies to prepare consolidated accounts in accordance with the IFRS. In the meantime, many major stock exchanges around the world, including the London, Frankfurt, Zurich, Luxembourg, Bangkok, Hong Kong, Amsterdam, Rome, and Kuala Lumpur stock exchanges, began to accept financial statements from foreign listed companies prepared under the IFRS without reconciliation. In the United States, the SEC also began to allow disclosures based on IFRS. As stated by the SEC, the reasons for accepting such standards in the U.S stock changes were as follows:
Our decision to adopt the International Disclosure Standards was based on our conclusion that the standards were of high quality and that their adoption would provide information comparable to the amount and quality of information that U.S. investors receive today [54].
The FASB decided that the need for international standards was strong enough to warrant more focused activity on its part. The then FASB Chairman, Dennis Beresford, expressed his support for “superior international standards” that would gradually replace national standards, and identified new initiatives to get the FASB more directly involved in the drive to improve international standards [55]. The FASB and the IASC began to undertake concurrent projects to improve their earnings per share standards with the specific objective of eliminating the differences between them.
The large listed European companies that chose early voluntary adoption of IFRS did so because they believed that the use of international standards would enable better communication with information users, especially international investors. For example, KPMG [49] reported in a survey that the reasons for European companies to switch from national standards to international standards included (1) the possibility of increasing the availability of capital and lowering its cost; (2) the perceived high quality of the IFRS; and (3) the preferences of institutional investors and analysts.
Then, in the early 2000s, efforts to internationally harmonize accounting standards finally evolved into a broad worldwide convergence effort at the national level. In 2002, the EU adopted legislation requiring all listed companies to prepare their consolidated financial statements using IFRS starting in 2005, which represented the first major capital market to require IFRS. The regulation states that IFRS adoption is intended to achieve “a high degree of transparency and comparability of financial statements and hence an efficient functioning of the (EU) Community capital market and of the Internal Market.” In the same year, the FASB and the IASB embarked on a partnership to improve and converge the U.S. GAAP and international accounting standards. That partnership is described in the Norwalk Agreement, which was issued after the joint meeting. The Norwalk Agreement set out the shared goal of developing compatible, high-quality accounting standards that could be used for both domestic and cross-border financial reporting [56]. Beginning in November 15, 2007, the U.S. SEC allowed the listing of foreign companies using the IFRS on the NYSE without having to first reconcile their financial statements with the U.S. GAAP. In the meantime, several other jurisdictions such as Hong Kong and Australia also chose to adopt IFRS. Japan and China also formed convergence plans with the IASB. In 2007, China achieved major convergence between the Chinese GAAP and the IFRS.
In addition, there was a continuation of the worldwide planning efforts at the international level. For example, in response to the international financial crisis, the G20 summit in Washington on November 15, 2008 produced a profound analysis and summary of the root causes of the crisis and put forward action plans that included improving the IASB’s governance and establishing a single set of high-quality global accounting standards [57]. The G20 summit in London in April 2009 required proactive collaboration from member countries in converging accounting standards [58]. The IMF routinely provided foreign aid to developing countries or countries in financial trouble with the demand that reform be enacted in the public and private sectors. Such demands were often tied to the demand that IFRS accounting standards be adopted. After the few rounds of major waves of IFRS adoption around the world, the success of IFRS convergence is now apparent. According to the recent IASB report, more than 140 jurisdictions have adopted IFRS with very few modifications, and the few jurisdictions that have made modifications are generally regarded as taking temporary steps in their plans to adopt IFRS.
In more recent years, despite the momentum of IFRS adoption by nations, there have been renewed concerns over the success and legitimacy of IFRS. Notwithstanding the claims by the IASB that modifications to the IFRS are rare, some academic research has shown continued major differences among national financial reporting [15, 59, 60, 61]. Of course, as Nobes and Zeff [17] point out, the most obvious limitation to the scope of the mandatory use of IFRS is that the phrase “all the major countries” does not include the world’s three largest economies: the United States, China, and Japan. They argue that, with the great increase in adoptions of IFRS, warnings about the vague claims are even more relevant, because the population of adopters is now much larger yet still shows considerable variety.
In addition, the speed of IFRS adoption has begun to slow down as the initial enthusiasm fades away. The Chinese GAAP, for example, have remained in a convergence but non-adoption status since 2006. The Chinese Ministry of Finance (MOF) originally set 2011 as the target year for the continuing and full convergence program of the ASBE, making 2010–2011 a critical period for China’s convergence. The MOF planned to initiate the overhaul of its ASBE system in 2010 and finish by 2011. All large and medium-sized enterprises would be required to use the revised standards as of 2012 [62]. This goal, as of 2019, remains in the planning stage without further movement. In the United States, in January 2008, participants in an FASB roundtable predicted that it would take about 5 years to complete the full adoption of IFRS by the United States. More than 12 years have passed since then, yet the United States has not only not adopted the IFRS, but also started to actively resist them.
Even if IFRS could achieve global convergence in the short term, observers have questioned whether these benefits are sustainable. By adopting IFRS, a country essentially allows a foreign entity with no local accountability to dictate its reporting laws and thereby control the economic incentives and activities of its people and businesses [63]. The former chairman of the SEC, Cox, points to this concern as a reason why a full-scale adoption of IFRS is unlikely to occur in the United States. He expressed his frustration and the downgrading of his trust in the IFRS in a keynote speech addressing the SEC:
…when I was SEC Chairman, I worked to ensure that the United States was doing everything necessary to make financial information from companies in different countries both comparable and reliable. But that was several years ago. And a great deal has changed since then. Today, I come to bury IFRS, not to praise them [63].
Cox further argued that the full adoption of IFRS by the United States might once have been possible, but is no longer so [63]. Some of the IFRS-adopting economies have also been requiring a national standard-setter to review and, if needed, modify the IFRS before they become the law of the land. This cherry-picking approach may lead each national regulator to adopt certain standards while rejecting others, thereby causing countries to diverge again in their accounting standards in the long run. On the other side, the IASB, which is facing increasing resistance, has emphasized that it remains committed to the long-term goal of the global adoption of IFRS as developed by the IASB, in their entirety and without modification. The IASB believes that convergence may be an appropriate short-term solution for a particular jurisdiction and may facilitate adoption over a transitional period. Convergence, however, should not be a substitute for adoption. Adoption mechanisms may differ among nations and may require a period of time to implement, but they should enable and require relevant entities to state that their financial statements are in full compliance with IFRS as issued by the IASB [64]. As stated on the IASB’s website:
There is a natural temptation for countries (and stakeholders within those countries) to argue against full adoption of IFRSs, to call for convergence of national standards and IFRSs rather than adoption, or to introduce national exceptions to IFRS rules. The temptation to pursue convergence rather than adoption should be resisted. Full adoption of IFRSs must be the end goal…Having once achieved convergence, standards could well diverge again [64].
To summarize, the most important reasons for the speedy and wide diffusion of IFRS are the growing integration of the world’s economy and a series of financial crises. This combination has increased the demand from international investors for better quality and comparability of financial reporting. As a result, the mission of the IASB has evolved over time. After initial hesitation on the part of nations, followed by fast adoption in many parts of the world, IFRS harmonization has begun to slow down in recent years.
This chapter has provided clarifications of some seemingly exchangeable but different terminologies when examining the complex topic of IFRS. The development and diffusion of IFRS have led a winding road characterized by initial doubts, fast adoption and recent slowdown. This chapter brought forward important insights regarding current development on international accounting harmonization by pointing out the trend of massive adoption of IFRS by country and the simultaneous variations that continue to hinder the efforts by the IASB. After 20 years of diffusion around the world, the IFRS have been widely recognized as high-quality accounting standards that can make it possible for financial information to be compared across national borders [8]. However, this success can only be sustained if the IFRS are adopted and applied properly in practice [20, 60].
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\n\nCSIC affiliated authors can also take advantage of a central Open Access fund (amounting to 10,000 EUR) to cover up to 50% of the rest of the OAPF until it expires. Effective for chapters accepted from January 1, 2020.
\n\nCorresponding authors will receive a 25% discount on their Open Access Publication Fees (OAPF) for Open Access book chapters. A 20% discount for publishing a long-form monographs, 25% for compacts and 23% for short-form monographs.
\n\nCorresponding authors will receive a 25% discount on their Open Access Publication Fees (OAPF) for Open Access book chapters. A 20% discount for publishing a long-form monographs, 25% for compacts and 23% for short-form monographs.
\n\n\n\nCorresponding authors will receive a 25% discount on their Open Access Publication Fees (OAPF) for Open Access book chapters. A 20% discount for publishing a long-form monographs, 25% for compacts and 23% for short-form monographs.
\n\nBook Chapters and Monographs
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