with accounting requirements in those countries.^29 In contrast, only 9 of the 40 French
companies, 2 of the 40 German companies, and none of the 40 Japanese companies
disclosed industry segment revenues, assets, and profits. However, 35 French, 37 Ger-
man, and 32 Japanese companies disclosed sometype of industry segment informa-
tion. A similar pattern was observed for geographic segment disclosures, which were
even less common. For example, only 7 Japanese companies made any type of geo-
graphic segment disclosure apparently due to their sensitive nature.
Exhibit 13.9 presents information on cash flow and funds flow statements in the
annual reports of the 200 companies from the same study. The exhibit shows that all
40 U.K. companies and all 40 U.S. companies presented cash flow statements, in
conformance with U.S. and U.K. accounting standards. In contrast, only 18 French
companies, 5 German companies, and 17 Japanese companies presented cash flow
statements. Even more striking is that 46 of the 120 French, German, and Japanese
companies did not even disclose funds flow information.
Exhibit 13.10 shows dramatic change in disclosures since 1993/94. All six of the
auto companies present segment revenues, assets, and sales, except for Jiangling,
which states that it operates in a single industry segment (automobile manufacturing)
and geographic region (China). All six companies also present cash flow statements.
(As shown in Exhibit 13.10, Jiangling and Volkswagen use International Accounting
Standards [IAS] for their consolidated financial reports, Toyota and Ford both use
U.S. GAAP, Hyundai uses Korean GAAP, and Fiat’s financial statements are pre-
pared in conformance with Italian regulations.)^30
Refer to Exhibit 13.11 for Volkswagen’s Cash Flow Statement. Cash flow disclo-
sures are new for Volkswagen, reflecting its recent adoption of International Ac-
counting Standards. Exhibit 13.12 presents Volkswagen’s Funds Flow statement from
its December 31, 2000, Annual Report based on German accounting standards.
13.7 SPECIAL DISCLOSURES FOR NONDOMESTIC FINANCIAL STATEMENT USERS
AND ACCOUNTING PRINCIPLES USED. Annual reports often include special dis-
closures to accommodate nondomestic financial statement users. Such disclosures in-
clude: convenience restatements of financial information to a nondomestic currency,
limited restatements of financial results and position to a second set of accounting
standards, a complete set of financial statements prepared in conformance with a sec-
ond set of accounting principles, and discussion of differences between accounting
principles used in the primary financial statements and some other set of accounting
principles. Many firms in countries where English is not the primary language also
translate entire annual reports from the home country language to English; such is the
13.7 SPECIAL DISCLOSURES FOR NONDOMESTIC USERS 13 • 19(^29) Companies with no reportable segments do not make these disclosures.
(^30) For convenience, we use the term International Accounting Standards (IAS) to refer to standards
promulgated by the International Accounting Standards Board (IASB) and the Board of the International
Accounting Standards Committee (IASC). More precisely, the IASB publishes its Standards in a series
of pronouncements called International Financial Reporting Standards (IFRS). It has also adopted the
body of Standards issued by the Board of the IASC. Those pronouncements are designated as “Interna-
tional Accounting Standards” (IAS) in this chapter. Refer to the IASB Web site (www.iasb.org.uk) and
Deloitte Touche Tohmatsu’s Web site on International Accounting Standards (IAS Plus, at http://www.ias-
plus.com) for detailed information about IAS. IAS Plus publishes highly useful country updates that re-
port on financial reporting, accounting standards, and related developments.
Volkswagen is required to use German accounting standards for nonconsolidated statutory reports,
however.