Financial Accounting: Significance of Financial Statements and Accounting Disclosures

Running head: FINANCIAL ACCOUNTING
Financial Accounting
Name of the Student:
Name of the University:
Author Note:

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FINANCIAL ACCOUNTING
Table of Contents
Part A.........................................................................................................................................2
Part B..........................................................................................................................................4
Part C..........................................................................................................................................5
Question a...............................................................................................................................5
Question b..............................................................................................................................6
Question c...............................................................................................................................7
Question d..............................................................................................................................7
Question e...............................................................................................................................7
Question f...............................................................................................................................8
Question g..............................................................................................................................8
Reference List............................................................................................................................9

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FINANCIAL ACCOUNTING
Part A
In this given case study, certain issue had been highlighted and this is about
significance of the financial statements as it is prepared by the administration of Business
Corporation. The financial statement prepared by companies contains important accounting
information that is needed by the third-party investors and own management of the Business
Corporation (Schaltegger & Burritt, 2017). However, it can be seen that the accounting report
of company plays major role in rendering appropriate information to the investors and
thereby the report should be prepared in an effective way.
In this case, the first point mentioned refers to the fact where it is known that financial
statements consists of information that are already being obtained or will be taking place in
the future years (Williams, 2014). It is essential to prepare the financial statements of any
company in a fair way as it shows the fair image of any business enterprise. It is the
responsibility of the financial report preparers to prepare the financial statement in a way so
that it can convey a sense of clarity as well as conciseness that will become easy to be
understood by third party or investors in that case. In one of the Accounting Standard AASB
101, the above statement is properly being illustrated to avoid any further confusion. In this
standard, it explain the purpose of financial statements where financial statements need to be
prepared by the business enterprises. In addition to that, accounting statement shows a proper
representation as it help in predicting the financial position or in that case financial
performance of business enterprise. In this given standard, it is properly highlighted that the
accounting reports of any company had been prepared for meeting the objectives and giving
our relevant information (Warren & Jones, 2018). The information is relating to assets,
liabilities, expenses, income, equity as well as cash flows. It even include the contributions of
the owners for given company.

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FINANCIAL ACCOUNTING
In the accounting report of any company, information are mentioned about the
accounting statement as it is prepared by the management of the company and further should
not be including factors such as any types of financial elements that have not at all taken
place in reality (Henderson et al., 2015). In addition to that, the financial elements or in that
case components should not be fictitious by nature. In the Accounting Standard 101, it was
mentioned that preparation of financial statements had been done to describe the aspect based
on the performance of financials as well as cash flows generated by Business Corporation.
The accounting statements prepared by any business entity should represent fair value and it
need faithful representation in regard to the effect of the transactions where other conditions
and events are present and even properly carried out based on different criteria if recognition,
explanation of assets, liabilities, income, expenses and equity as it is properly explained in
the framework.
It is important to understand the fact that accounting statement prepared by the
companies where financial statements are present need to comply with the International
Financial Reporting Standards and it will further result in the unreserved as well as explicit
statements and shown in the compliance in the notes section (Beatty & Liao, 2014). Company
should present the financial statement in a fair way that complies with the standards as
mentioned in AASB 108 and maintains the level of hierarchy of authoritative guidance where
the management need to understand about the absence of Australian Accounting Standard. As
far as provisions are concerned, it involves additional disclosures that relates with compliance
with the specific requirements that have been included in the Australian Accounting
Standards.
From the above discussion, it is concluded that the preparation of financial statements
should be in such a way that should reflect a fair image of the Business Corporation. In
addition to that, AASB 101 as well as 108 need to be adopted by company at the time of