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Advanced Financial Accounting and Reporting (PDF)

   

Added on  2021-05-31

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ADVANCE FINANCIAL ACCOUTING1Advanced Financial AccountingStudent NameUniversity Name
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ADVANCE FINANCIAL ACCOUTING2Table of ContentsAssessment Part A...........................................................................................................................3Assessment Part B...........................................................................................................................4PUBLIC INTEREST THEORY......................................................................................................4CAPTURE THEORY......................................................................................................................6ECONOMIC INTEREST GROUP THEORY OF REGULATION...............................................7Assessment Part C...........................................................................................................................7Assessment Part D...........................................................................................................................8Part A: Motivation behind not revaluing the assets.........................................................................8Part B: Effects the decision not to revalue the assets in financial statements.................................9Part C: Effect on the wealth of the shareholders.............................................................................9References......................................................................................................................................11
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ADVANCE FINANCIAL ACCOUTING3Assessment Part AIn the article “Unwieldy rules useless for investors”, the financial accounting standards and IFRShas been criticized and there are various reasons behind it. There are several objective offinancial reporting (Weil, Schipper and Francis 2013). These are as follows:-Providing useful information in making investing decisionsFuture cash flows can be assessed with the help of these decisionsAny changes in the business structure can also be assessed.The qualitative characteristics of conceptual framework are as follows:-Relevancy- There needs to be relevant information which can change or influence theinvestment decisions of the investors. Relevancy is a key to financial reporting. Comparability- The given information needs to be comparable with similar entities withrespect to same financial year. This characteristics will help users to evaluate similaritiesand differences among various items (Weygandt, Kimmel and Kieso 2015). Faithful representation-It is important to provide faithful information to all thestakeholders of financial statements. Faithful representation needs to be in terms of errorfree, completeness and neutrality. Apart from this, there needs to be prudence as wellwhile making judgments at times of uncertainty. Timeliness- The given information should be available in time so that the investors cantake timely decisions as per their needs and requirements.
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ADVANCE FINANCIAL ACCOUTING4Understandability- The information needs to be understandable for the users. It shouldnot be misleading to the users. Otherwise, the purpose of financial reporting will gowrong. However, in the given article, the given individuals quoted that the above qualitativecharacteristics of financial reporting do not appear to be satisfied by current reporting practicespursuant to IFRS. In the article, it has been mentioned that IFRS adjustments are not relevant,faithful and it is often misleading for the investors. In addition to this, the investors are not beingable to compare different companies while making investments (Deegan 2013). However, these views are consistent with the view that corporate financial reports satisfy thecentral objective of financial reporting as identified in the Conceptual Framework. Theobjectives of financial reports is to provide relevant information regarding the assets, liabilitiesincome, expenses, equity of the respective organization to all stakeholders (Scott 2015). Corporate financial reports needs to satisfy all the above mentioned characteristics of ConceptualFramework, in order to meet the needs and requirements of all the stakeholders of financialstatements (Weygandt, Kimmel and Kieso 2015). Assessment Part BThe given question deals with the amendments of Corporation Act to meet social andenvironmental responsibilities of the organizations.
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