Assignment on International Financial Reporting
Added on 2020-10-23
18 Pages5292 Words135 Views
International FinancialReporting
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................11. Context and purpose of financial reporting.............................................................................12. Conceptual and regulatory framework and their requirement, purpose and key principles...23. Main stakeholders of an organisation and the way in which they get benefited with the helpof financial information...............................................................................................................44. Value of financial reporting in meeting organisational objective and growth........................55. Main financial statement of the organisation..........................................................................66. Financial statements of the organisation that are used to interpret and communicatefinancial performance..................................................................................................................97. Difference between IAS and IFRS..........................................................................................98. Evaluation of benefits of IFRS..............................................................................................11International Financial Reporting Standards:............................................................................119. Varying degrees of compliance with IFRS...........................................................................12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14APPENDIX....................................................................................................................................15
INTRODUCTIONFinancial reporting is the process of formulating financial statements that are required toanalyse organisational performance and market position. It guides internal and externalstakeholders to determine that organisation is in good condition or not. It is essential for thecompanies to conduct financial reporting regularly so that a good market image can beestablished (Abata, 2015). While shareholders and investors are wiling to analyse that theirmoney is properly used by the company or not, in this situation they may get appropriate statusof their funds from financial statements. Junior auditor of an accountancy firm is going toconduct financial reporting for Marks and Spencer. Various topics are discussed under this reportthat are financial reporting and its purpose, conceptual and regulatory framework and theirrequirement, purpose and key principles, main stakeholders of the organisation and they way inwhich they get benefits form financial information, value of financial reporting in meetingorganisational objective and growth, formulation of main financial statements, differencebetween IFRS and IAS. Benefits of IFRS and varying degrees of compliance with IFRS havealso been discussed under this report.MAIN BODY1. Context and purpose of financial reporting Financial reporting: It is a process in which accountants of an organisation formulatefinancial statements so that financial status and market position of the company can be analysed.Three different types of statements are formulated under financial reporting these are income andcash flow statement, balance sheet. All of them presented in front of stakeholders so that theymay analyse financial strength of the company. In Marks and Spencer financial statements arecreated so that managers may get exact information of the company and also make effectivedecisions according to organisational situation (Alali and Foote, 2012).It is very important for all the companies to generate financial statements so that exactstatus of the organisation can be analysed. Mainly financial reporting is done annually todetermine all the incomes, expenses, profits, revenues, losses, assets and liabilities that areacquired or faced by a business entity in a specific time period. It is the main source for externalstakeholders to evaluate financial strength of a business and its operations. Top management ofMarks and Spencer is liable for the proper formulation of financial statements in which1
appropriate information is recorded. Appropriate financial reports help auditors to audit therecords and then give their opinion company's performance and appropriateness of the datawhich is recorded in final accounts.Purpose of financial reporting:Main purpose of financial reporting is to provide appropriate information of financialstatus of the organisation to the stakeholders so that they may analyse actual status oftheir money which has been invested by them in the company.Another purpose of financial reporting is to attract foreign investment by keeping a goodfinancial position in the market.Financial reporting is a technique which is very beneficial for every organisation and helpto enhance investment by providing transparent financial information to the investors. If Marksand Spencer is not able to attract large number of investors than it is not possible for theorganisation to operate business activities because funds that are acquired by investors are usedfor business operations. As Marks and Spencer is executing business in multiple countries henceforeign investment is required for the company which can be gathered with the help of largenumber of investors (Aletkin, 2014).2. Conceptual and regulatory framework and their requirement, purpose and key principlesConceptual framework: It is an logical tool with respective fluctuation and context. It ismainly used for make abstracted differentiation and coordinate opinions. In other words it can bedefined as combination of assumptions, principles, rules and regulations that are formed byregulatory authorities in order to guide organisations while formulating financial statements. It isvital for Marks and Spencer to follow all the relevant principles that are imposed by government.Regulatory framework: It can be defined as a set of regulations that are published bygovernment for the purpose of regulating and supervising organisations while recording financialinformation in final accounts. For Marks and Spencer it is very important to follow all theregulations so that business can be executed appropriately with no government interference. IASB (international Accounting Standards Board) and IASC (International AccountingStandards Committee) are the two regulatory bodies who are liable to impose differentaccounting and financial reporting standards. It is essential for the organisations who are willingto operate business globally to follow all the standards. IFRS (International Financial AccountingStandards) are the principles of regulatory and conceptual framework and launched by IASB.2
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
International Financial Reporting Assignment (Doc)lg...
|15
|4171
|440
Financial Reporting System - Sample Assignmentlg...
|18
|5522
|498
Financial Reporting - Marks & Spencerlg...
|15
|4225
|381
Financial Reporting Assignment - Mark and Spenserlg...
|13
|3702
|51
Purpose of Financial Reporting - Doclg...
|16
|3312
|175
International Financial Reporting (IFRS) INTRODUCTION 1 MAIN BODY 1lg...
|15
|3886
|166