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FINANCIAL REPORTING INTRODUCTION 1 MAIN BODY1 1. Context and purpose of financial reporting

   

Added on  2020-12-09

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FINANCIAL REPORTING
FINANCIAL REPORTING INTRODUCTION 1 MAIN BODY1 1. Context and purpose of financial reporting_1
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................11. Context and purpose of financial reporting.............................................................................12. Analysis of regulatory and conceptual framework and key principles and qualitativecharacteristics..............................................................................................................................23. Main stakeholders of organisation and benefits from financial information..........................34. Importance of financial reporting for meeting entity's growth and objectives.......................45. Formation of financial statements as per IAS 1......................................................................46. Interpretation of last two year's financial statement of company............................................57. Differences between IFRS and IAS........................................................................................68. Benefits of IFRS......................................................................................................................79. Degree of compliance with IFRS by organisation across the world and with in the nation...8CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9APPENDIX....................................................................................................................................10Balance sheet ............................................................................................................................10Income statement......................................................................................................................11Cash flow statement .................................................................................................................12
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INTRODUCTIONIn modern world, financial reporting can be considered as a form through whichsummarising of data related to finance of a business company. With the help of this, analysationcan be done of areas that requires improvement (Brusca, and et. al., 2016). Using financialreporting, effective solutions can be made considering various standards related to finance. Forthe purpose of better knowledge related to standards of international financial reporting, juniorauditor have developed this report for line manager. This assignment is going to be enclosed withregulatory framework, purpose and principles that consists with characteristics of financial data.Away with this. Assignment will also include interpretation of H&M's financial statements forthe last two years so that performance of this organisation can easily be examined. Lastly, degreerelated to compliance have also been presented that consists of activities along with a planconsidering significant examples. MAIN BODY1. Context and purpose of financial reportingFinancial Reporting In present time, financial reporting can easily be defined as an approach which is beingutilised by a company when it comes to measure the financial position or to analyse the data aswell (Che Azmi and Hanifa, 2015). According to International Accounting Standard Board(IASB), main objective of developing financial report is that, data can be rendered for analysingthe current financial position so, that effective alterations can be made for the purpose ofenhancing the position of the company. This tool is majorly being used by extended users thatconsists with a purpose (interest) within a company like H&M. It has been analysed that,financial reporting consists with a procedure which could aid in tracking that data which isrelated to finance so that effective management or control can be done of exchange of finance orfunding capacity of a company.Apart from this, it is being found that IASB mainly shows that H&M needs to developstatements of financial so that right data related to funds can be provided to stakeholders. Thiseventually pulls out or it shows authentic position of H&M in finance so that it could aid inattracting new investor's or develop interest of existing investors. On the other hand, it isrequired for analysts of H&M to focus on fractional data so that execution could take place. It is1
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being found that stakeholders needs every single information related to financial status of acompany before investing and the financial reporting may also aid managers of H&M indeveloping financial plans which could aid them in reducing expenses and enhancing profitmargins.Purpose of financial reporting To evaluate or gather right and authenticated data related to both financial position andprofit rations and this could be submitted to stakeholders along with investors. To deliver information or the data to BOD of organisation H&M so that they could easilydevelop accurate plans or strategies related to finance.To improve or enhance data that needs to be used by a company related to its diverseassets. To keep control over resources related to finance of a company.2. Analysis of regulatory and conceptual framework and key principles and qualitativecharacteristicsConceptual and regulatory framework-Conceptual and regulatory framework is a set of policies and processes which deals withsubjective as ell as quantitative issues (Fradeani, Panizzolo and Metushi, 2016). This is aregulatory framework structure used by H&M which helps a business concern to deal with majorfinancial issues. It contains all basic information regarding financial data with substantial limits.It helps in analysing estimates for efficiency in execution of financial policies as well ashelps to achieve better financial control. H&M adopts these policies and procedures under IFRS.Requirements laid down by IFRS are as follows:It supplies with effective ideas which can be used for identifying required amount ofcapital support.It helps in developing and controlling existence standards with help of accountingconcepts.It helps in improving business position by enhancing growth and developingopportunities. The qualitative characteristics that makes financial information more reliableInternational Financial Reporting Standards (IFRS) could easily be an effective toolwhich aid a firm in developing or maintaining international financial reporting standards (Siew,2
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