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Accounting Complex Measurement System

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Accounting is a complex measurement system, there are multiple languages around the world.

This lack of a common accounting system opens up loopholes that mislead businessmen and investors, as financial statements are different from a country to another and therefore, so is the understanding of a company's performance.

Nowadays, the growth of globalization and the opportunities on the global market are countless, thus, any international competitive company will face some challenges due to the different local regulations for each country ( related to taxation, regulatory frameworks, national cultural influences … ). It can not only impact the accounting model of the company but also its profitability. Consequently,  a company needs to get updated in case of a regulation change to make sure that the financial statements remain in line with the accounting guidelines and legal requirements.

For instance, there are the Generally Accepted Accounting Principles (GAAP) that is also different from a country to another, the financial Accounting Standards Board ( FASB) and the Accounting Standards Board ( IASB), among others.

In fact, there is a current move towards a common accounting standards that is International Financial Reporting Standards ( IFRS), however, it is not global yet.

Therefore, there is still a long way to go before there is a single universally accepted reporting standard.

Taking into consideration all these variables, and as an owner of a moroccan e-commerce company that sells abroad with the aim to expand around the world, it is a duty to understand the differences between the several accounting standards and languages that may differ from those in Morocco.

In order to do so, an insight of moroccan accounting history will be set as a first step to understand the local accounting framework. Then, a comparison between moroccan local accounting standards and those abroad will be detailed. Finally, the accounting challenges in e-commerce are important to be taken into account in the context, and will be by implication enumerated.  


First of all, it is important to know that Morocco was a french protectorate from 1912 and 1956. During this period of time, the country followed the exact same laws and regulations as those in France. Then in 1957, Morocco switched from the french accounting chart to the moroccan one. The footprint of the protectorate has naturally remained in the moroccan accounting standards, however many specifications and adjustments have been added.

This is the timeline of the key milestones that have occured since Morocco's independence.

In 1986 : Creation of the official accounting standards' framework

In 1985 : Establishment of VAT in Morocco ( 20% )

In 1987 : Establishment of the corporate tax and and the income tax

In 1988 : Update of the CGNC « code général de normalisation comptable » which is the the overall code of the accounting standards

In 1995 : Creation of the OEC « organisation des experts comptable » which is the organization of the accountancy profession.

Plus, Morocco is a muslim country and the influence of Islam is clearly present in the foundation of the local accounting standards. Islam is a lifestyle and a worldview with specific ethics that people have to apply in their practices. For instance, in the islamic accounting an asset is measured depending on its saleable value using the market price whereas in conventional accounting it is measured with the highest possible profit and using the historical cost ( as it is profit-oriented ). Also, the islamic accounting is based on ethical law, emanating from the Quran ( shariah), whereas the conventional accounting is based on modern commercial law-permissive. Furthermore, in islamic accounting, interests are forbidden whereas in IFRS financial standards are based on interests products with cash flow actuation.

In addition, in Islamic accounting, there is a full disclosure to satisfy any demand for information accordance with Islamic law to serve the public interest

In conventional accounting though, there is limited disclosure as release of information is subject to public interest.

Comparative analysis between moroccan accounting standards PCGM and IFRS

The PCGM is  the Plan Comptable Général Marocain which is the Moroccan General Accountant Plan (PCGM) and IFRS is International Financial Recording Standards. There are many divergences as follows :

  • The Moroccan PCGM include two standards : one for the parent company financial statements and another one for the consolidated financial statements. Sometimes, the application of these two reference systems in Morocco is difficult to understand and can lead to surprising discrepancies. In contrast, the IFRS standards contain only one standard that must be applied in its entirety. It doesn't allow to make any differentiation between social and consolidated accounts.
  • Moroccan standards regulate the accounting law of companies and merchants, whereas IFRS standards are applied to the sphere of financial reporting in general. IFRSs are used for broader application.
  • The PCGM prioritizes accounting with a chart of accounts and account numbers, accounting rules, and has gradually expanded its prerogatives to states of restitution of information. In contrast, IFRS is more oriented towards investors. It addresses financial reporting by communicating with shareholders, markets and third parties before defining standardized rules for content and judgment.
  • The IFRSs are decided by private organizations that are independent from the public and political authorities, while The PCGM comes directly from the Moroccan public authorities.
  • Concerning tax rules, particularly taxes related to profits ( corporate income tax), the rules for determining the bases of the tax on profits still govern the accounting regulations and the methods used in Moroccan companies, as the PCGM authorize certain exceptions where tax rules require certain postings at the risk of being deprived of rights to deduct expenses. The IFRS approach is completely different from the tax rules because they are treated separately. The calculation of the tax on profits is done outside the financial statements and the accounts.

Also, there are also other differences as follows :


Moroccan Standards

Intangible assets

Amortization of some intangible assets

Mandatory amortization of all intangible assets

Depreciation of property, plant and equipment

Amortization method not specified

Method linear or declining mode


Unauthorized depreciation

Linear depreciation method.

Maximum duration of 20 years (useful life of the asset in Morocco). The general accounting plan obligates that goodwill is amortized during this period of time without exception

Revaluation of property, plant and equipment

It is permitted, not taxed and always practiced

It is permitted, taxed and rarely practiced

Treatment of receivables

Revenue recognition is based on the reality of the transaction : the percentage of completion method is mandatory for service.

Revenue recognition is based on the legal form of the contract : the percentage of completion method is an option


The discounting of provisions is mandatory:

There is a precision for estimating future flows, discounting and information

to provide.

Supplies for major repairs are not allowed by the standards


The discounting provisions is not mandatory :

There is an absence of express provision concerning the valuation of provisions.It is generally made with approximations

Plus, a provision for major repairs is mandatorily constituted if it is intended to cover important expenses which do not have an annual nature and can not be related to routine maintenance and repair costs.



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