Elements in Preparing Financial Statements

   

Added on  2020-10-22

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Financial Reporting
Elements in Preparing Financial Statements_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Conceptual Framework................................................................................................................1TASK 2............................................................................................................................................2Elements in preparing financial statements.................................................................................2CONCLUSION................................................................................................................................3REFERENCES................................................................................................................................4
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INTRODUCTIONIn business scenario, the term financial reporting is defined as the process of effectivecommunication of important fiscal information such as annual statements to different stakeholderso that current status and strength can be viewed by them to make meaningful decision (Ball,2013). In general, anything that could be convey financial information to the number ofshareholder is considered to be a kind of financial reporting. TASK 1Conceptual FrameworkThe International Accounting Standard Board has published conceptual framework tomake accuracy in financial reporting that includes the exact and authentic definition of liabilityand assets it also provide the new guidelines on measurement, presentation, recognition anddisclosure. These framework conform to make sure that different accounting standard consist ofvarious approaches that can be used to resolve the problems that are not being addressed directlywithin a standard. It assists the IASB for the better development of consistent and coherentaccounting standard that further support to prepare valuable financial statements so that user areable to understand the purpose, concept and limitation of financial reporting. The framework hasto consider that is meant by the usefulness of information which consist the both relevance suchas user are capable to make a differences in the decision and the truthfulness in the presentationof accounting information i.e must be complete, free from any type of error and neutral. Basic objective of financial reporting: The main objective of financial reporting aredescribed below:It provide faithful information about the overall companies cash flows with the exact timeand other uncertainty of cash inflows and outflows. This is one of the main informationas it help in ascertaining the actual liquidity of a firm so that it can continue as a goingconcern (Arouri, and et.al, 2012). The main objective is to provide valuable information to the user of report. So theseinformation could be used for number of purpose like to deliver credit facilities to clients,either to lend monetary terms and the most important either to invest in company or not. 1
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