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Finance Reporting Assignment Sample

   

Added on  2020-09-08

11 Pages3263 Words923 Views
FINANCE REPORTING1

ContentsINTRODUCTION.....................................................................................................................................31. Outline Purpose of Financial Reporting...............................................................................................32. Examine regulatory and conceptual framework...................................................................................33. Identification of key stakeholders and their benefits............................................................................44. Value of financial reporting for meeting firm’s growth and objective.................................................55. Financial Analysis...............................................................................................................................56. Interpretation of Financial Statement and ratio....................................................................................77. Comparison between IAS and IFRS....................................................................................................98. Benefits of IFRS..................................................................................................................................99. Degree of IFRS Compliance by company all over the world.............................................................10CONCLUSION........................................................................................................................................10REFEENCES...........................................................................................................................................112

INTRODUCTION Financial Reporting refers to the process of creating statements that reveals financial status or position of business enterprise to investors, government, stakeholders and management. These reports are mainly published by organization at the end of accounting or financial year (Council, 2010). It generally disclose the financial position of a particular company for a specified time period. It is essential for every enterprise and considered as a main part of Corporate Governance. For listed companies, it mainly prepared on quarterly & annual basis. It mainly consist of balance sheet, profit and loss, cash flow, company’s prospectus, management analysis and discussion. It basically provides information related to company’s growth and revenue as compared to its competitors. This report is based on ROB PLC. This report also covers the purpose of financial statement, conceptual and regulatory framework, how stakeholders get benefit from financial report, benefit of IFRS, analysis of financial performance and degree of compliance in relation with IFRS. 1. Outline Purpose of Financial Reporting Financial Reports mainly describes the financial position of the company in terms if figures. It provides useful information to investors, stakeholders and management. This report depicts whether the company has yield profit in a year or loss. It also valued their assets and liabilities. At the end of every year, it is important for business concern to set off their accounts and figures. They usually prepare profit and loss, cash flow and balance sheet statement. It is mainly prepared when accounting or financial period or year ends. Following are the purpose of Financial Reporting: Providing necessary and useful information to stakeholders, investors and management ofbusiness enterprise that further use is for planning, benchmarking, forecasting, analysis and decision making. Providing information to promoters, creditors and debt payer which assist them in making prudent decision related to credit, investment etc. Renders information to government bodies, public and shareholders at large that depicts various aspect of organization in terms of its financial figures. Provides information related to procurement and utilization of resources. Delivers information to stakeholders in terms of financial performance of company and its management as how ethically they are performing its responsibilities and duties. Provides assistance to auditors by giving them information related to company’s financialratios, statement and accounts. It also provides competitive advantage to company over their rivals in context of its position in the market place. Describes how company has arranged its funding for managing its day to day operations and working capital (Beyer and Cohen and Walther, 2010). 2. Examine regulatory and conceptual framework It is essential for ever business enterprise to follow and practice guidelines in order to attain better results or outcome. Accounts manager of firm interpret their financials and numbers 3

and draw a conclusion that depicts its performance. Basically it provide presentation, disclosure and measurement of financial statements in terms of material aspects. It is mainly classified into two framework: Conceptual Framework: This framework helps in preparing financial statement or report of thecompany that depicts its performance throughout the year in order to accomplish its goals and objectives (Deegan, 2013). Basically it deals with issues related to financial reporting in terms ofachieving goals, making financial information useful, components of financial statements etc. Under this framework, information has been gathered for external users regarding the company’sassets, liabilities, income, equity, expense etc. and the concept for recording it financial statement. BenefitsUseful for external users as it provides information related to company’s income, expense, and profit for a particular accounting year. Provides guidance and direction at the time of analyzing and reviewing financial regulation and figures. Implementing accounting standards at internal level of company. Regulatory Framework: It deals with regulations and rules prepared by government bodies in order to record various accounting & financial transaction. Every entry or transaction has been recorded in its own way. There is defined pattern according to which transactions are being recorded in the books of accounts. It also involves theories, concepts and principles according to which entries have been recorded in books. It mainly includes going concern concept, matching principle. Dual concept etc. Every organization is following this and they record their entries on the basis of chronological order that includes journal, ledger, subsidiary books, profit and loss and balance sheet. It eventually help the manager to take strategic decision related to company’s growth and success. Benefits Assist in anticipating future needs related to fund. Assist in making effective decision concerning firm’s profitability and performance in themarketplace. 3. Identification of key stakeholders and their benefitsStakeholder are generally parties, person, authorities and bodies that has specify interest towards the organization. They are the one who directly or indirectly affects the firm’s performance, objectives, goals and policies. Some one of the example of stakeholder are government, investors, directors, suppliers, debtors, shareholders and creditors. They all contributes in different manner towards accomplishing firm’s goals. Customers are also considered as an important stakeholder but their contribution is limited to some extent. Stakeholder basically determines the result or consequence of business decision (Li, 2010). Theycan be employees, can be business partner or anyone who possess or holds stake in the company.Following are the benefits of different stakeholders: 4

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