ACCT20074 Contemporary Accounting Theory | Assignment
Added on 2020-03-23
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ACCT20074 Final AssignmentTerm 2, 2017Student ID:..................................... Student name..............................................................Marker’s overall comments:The markers may include any final comments here.Overall Mark (Total) out of 50:0
Question 1: The main objective of GPFR the provision of useful financial information (FI) to such users like creditors, lenders as well asinvestors. Such info are vital in helping the users to make rational decisions as outlined in Conceptual Framework (CF), OB2. Amazonmust provide useful FI to the current alongside potential investors, lenders and creditors. This is information is helpful to the Companyitself and valuable to each user of FI. Meeting this requirement remains the basis upon which Amazon’s financial performance (FP),financial position (FP) as well as cash-flow management is accessed by various users. The FI users shall subsequently reach atdecisions on whether the company is solvent or not. To lenders, such a decision is an imperative element when extending services toAmazon. To other users of FI for instance, investors, it remains clear from the story that they are very worried. This is because Amazonis trapped under fire because of its inability to produce adequate profits. An Amazon investor shall have an effortless time whenassessing the Amazon’s potential ambitious strategies to provide ROI if the investor chooses to buy, sell or hold equities. For thecurrent shareholders, providing such useful FI remains a vital role as well as important element of how they are able to track the
position, performance and cash alongside cash equivalent production and succeeding expenditure by Amazon. This is important since itmakes the investors certain that Amazon solely involve in strategies for growth that shall trigger sales. Thus, leading to betterprofitability which subsequently leads to increased dividends earnings. The investors and shareholder have to utilize such a FI to judgewhether to purchase shares, sell shares or hold equity of Amazon or instrument of debt. Where Amazon fails to comply with this objective it will lead to serious repercussion. This is because FI users will be thinkingthat Amazon is holding vital info. Therefore, users of FI will lose confidence in Amazon. The creditors and lenders need suchinformation because they need to track the Amazon’s ability to pay for its liabilities alongside additional credit forms. In the absence ofthis vital information, it will be increasingly difficult for lenders as well as creditors to be confidence in Amazon. This is because userswill be uncertain of liquidity or solvency of Amazon (Draft, 2015). Lenders are solely willing to extend lending service if the Companyis credit worth and companies that meet all obligation financially. The lenders need the Amazon’s FI to track how the Companyreceived cash. They also need to track how these receipts are spent to help in gauging Amazon’s desirability for lending. The above objective is hence applicable best to Amazon’s financial reporting (FR). This is due to company being under fire andhence all users of FI require such information to restore their confidence (Deegan, 2013). The Company has to disclose all informationit possess to make sure investors alongside shareholders are not misled into purchasing, selling, or holding its equities alongside debtinstruments. Amazon further needs to meet this particular objective to back up the Jeff’s ambitious strategies by explaining to potential
investors that they can invest as they will get ROI eventually. As things are right now, it will be foolhardy for any user of FI to blindlybelieve Jeff’s strategies as the profits are never realized enough putting the company financial position at a compromising situation. References:Deegan, C. (2013). Financial accounting theory. McGraw-Hill Education Australia.Draft, I. E. (2015). Conceptual Framework for Financial Reporting. 2015-05-01)[2015-07-20]. http://kjs. mof. gov.cn/zhengwuxinxi/gongzuotongzhi/201506 P.Marker’s Comments: The marker will provide feedback here.Mark (10):0Question 2:
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