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14 FINANCIAL REPORTING Financial Reporting

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Added on  2020-03-16

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Financial Reporting: Primary Users, Qualitative Features: Primary Users: As discussed above the investors, the creditors and also the lenders are the ones whose decisions regarding investments an d borrowing, investing n equities and other risky assets depend on the effective information that they receive and analyze from the financial reports. Qualitative Features: Current Framework: The primary features of a robust financial report are as follows: a) Relevance: Relevance of the financial information provided in these types of reports are of utmost importance as much

14 FINANCIAL REPORTING Financial Reporting

   Added on 2020-03-16

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Running head: FINANCIAL REPORTING Financial Reporting Name of the StudentName of the UniversityAuthor Note
14 FINANCIAL REPORTING Financial Reporting_1
1FINANCIAL REPORTING Executive SummaryIn the concerned business report the general purpose and the primary objectives of the financialreporting are discussed along with the characteristics (mainly qualitative) of this type ofreporting. The satisfaction of the discourse requirement of the enterprise as well as the primaryuser is also analyzed in this assignment. The reporting not being comprehensive, a fewsuggestive measures are recommended at the later sections of the report.
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2FINANCIAL REPORTING Introduction: Financial Reporting: Purpose: The primary purpose of this kind of reporting is to provide financial statements which reflectsthe overall performances and changes in the financial dynamics of the individual or enterpriseconcerned. Project Structure: The primary users of financial reports are mainly the investors (both existing and potential), thecreditors and the lenders whose economic decision making depends significantly on the analysisof these reports. The fundamental features of these kind of reports are mainly trustworthyrepresentation of data and the relevance. Timeliness, ease to understand, compare and verify arethe added qualitative features of a good financial report. It is needed to see whether theserequirements are satisfied in the latest financial report of BHP Billiton. Financial Reporting: Primary Users, Qualitative Features: Primary Users: As discussed above the investors, the creditors and also the lenders are the ones whose decisionsregarding investments an d borrowing, investing n equities and other risky assets depend on theeffective information that they receive and analyze from the financial reports. The reports, notonly reflects the financial prospects of the concerned enterprises or individuals but also indirectlyshows the condition and efficiency in how the same manages its financial operations and howaccountable these enterprises are. The reports are also sources of vital information for themanaging bodies of firms, the shareholders and the public in general though they are notconsidered primary users as such.
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3FINANCIAL REPORTING Qualitative Features: Current Framework: The primary features of a robust financial report are as follows: a) Relevance: Relevance of the financial information provided in these types of reports are of utmostimportance as much of the decisions of the primary as well as non-primary users and theoutcomes of such financial decisions depend on the viability of such information. Thisinformation are often used to forecast the future financial conditions due to the presence of theirpredictive and confirmatory values. Therefore, the information needs to be relevant in order topredict the future outcomes correctly and take appropriate decisions. b) Robust faithful representation: The reports should be represented in such a manner that it provides a complete and unbiasedview of the entire financial condition prevailing and the error is minimized. The completeness of the report helps the users to get a clear and wholesome picture of thecurrent and future situations. Unbiased reporting indicates the absence of hidden and unequally weighted information,which if present may distort the result. An error if present in the reporting can have serious adverse implications for the primaryusers and therefore, a good report works towards zero error. Adding qualitative features: a) Comparability- this helps the users in comparing the performances of different units in thesame aspects or for reviewing the performances of same unit in different time spans.
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