Accounting in a business
Added on -2020-07-22
TASK 1 The primary users of financial reporting are potential investors, creditors, lenders who are using this information’s so that they can make decision about selling, buying or holding equity for a specific period of time. Information which are collected by users are showing relevance and it influence the economic decision which help to operator in evaluating past, present and future events and can be predict in simple way.This information must be reliable and should be free from error or bias which represent faithful representation of data (
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Accounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1TASK 2............................................................................................................................................2CONCLUSION................................................................................................................................3REFERENCES................................................................................................................................4
INTRODUCTIONAccounting is systematic and comprehensive recording of financial transaction inpertaining a business. It is considered as one of the key function for all entities so that they cansummarise, analyse the transactions which are done by them (Barth, 2013). Readers are awareabout that all listed companies who are regulated in European market are required to consolidatetheir accounts according to International Accounting Standards since 2005. In this essay,International Accounting Standard Board (IASB) framework is discussed. Further in this report,benefits of financial reporting have been discussed which help to users in marinating accounts.At last, different concepts has been discussed which help to organisation in making short termdecision. TASK 1The primary users of financial reporting are potential investors, creditors, lenders who areusing this information’s so that they can make decision about selling, buying or holding equityfor a specific period of time. The framework regarding IASB had set out the concept that shapethe preparation and presentation of making financial statement for their external users (Gordonand et.al., 2015). This framework assists with in promoting the harmonisation of regulations,procedures and accounting standard which is related with presentation of financial statement andprovide basis for reducing number of alternative accounting treatment. This framework comprises with several section which covers many areas such as;elements of financial statement, qualitative characteristics of monetary information, underlyingassumptions, concept of capital maintenance. All this will help to users in maintaining theiraccounts in reliable. Framework identifies two fundamental qualitative characteristics which are useful infinancial information; relevancy and faithful representation (Jackling, 2013). There is anothercharacteristic which enhancing qualitative; verifiability, timeless, understand ability andcomparability. However, this agenda acknowledges that information which may not possess allenhancing characteristics but still it may be useful for users. These attributes are providing usefuland reliable information to their users in maintaining authenticate report on financial statement. A primary characteristic of financial information is that it should be willingly (readily)understandable by users. This assumes that users are having knowledge regarding their business;1
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