Financial Reporting: Definition, Importance, and Concepts

Financial Reporting

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1.Reporting entity – Definition, Description, Discussion & Identification.....................................1
Definition....................................................................................................................................1
Description .................................................................................................................................2
Discussion & Identification........................................................................................................3
2. Fundamental Qualitative Characteristic - Understanding of Relevance and Representational
faithfulness.......................................................................................................................................3
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Financial reporting deals with communicating the financial information such as the
financial statements to the users such as creditors or investors. Financial reporting is been viewed
mainly as the companies issuing the financial statements. Main financial statements are income
statement, balance sheet and cash flow statement. Financial reporting has very broad area and not
just limited with reporting statements. Financial reports communicates all the information from
the businesses to the outside users. Anything that is being conveyed as financial information to
outside users can be termed as financial reporting. Financial reports are prepared in accordance
with reporting frameworks given by the accounting authorities and regulatory bodies. Present
report will provide about the concept of reporting entity and the essential of reportig entity. The
annual reports of Domino Pizza of year 2019. Report will also provide for relevance and
representational faithfulness of the useful information given in financial statements.
MAIN BODY
1.Reporting entity – Definition, Description, Discussion & Identification.
Reporting Entity
Definition
''Reporting entities are described as circumscribed area of the business activities for
interest of potential and present investors or other capital providers. ''
Reporting entity is defined as an entity, where it could be adequately expected that users
are there who are dependent over GPFR (General Purpose Financial Report) for gaining the
understanding about the financial performance and position of company. Also are dependent for
making decisions that are taken on the financial informations and the other relevant information
that is controlled within the financial reports. The users are employees, members, shareholders,
lenders, creditors, or the potential investors (Tan and Low, 2017). It requires that reporting entity
not to be over the business activities which are incorporated as legal entity – therefore
partnerships, sole proprietorship, associations & the group entities would be falling within the
description.
Definition of reporting entity is primarily based over notion of the financial
accountability. Primary governments are primary accountable for organisations making up legal
entity. On the other hand a non reporting entity can be defined as an entity where it has been
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