Financial Accounting: Conceptual Framework, Objectives of Financial Reporting, and Globally Accepted Accounting Standards

FINANCIAL
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
(a). Conceptual Framework and Its major purposes:...................................................................3
(b). Objectives of Financial Reporting:.......................................................................................3
(c). Globally accepted set of accounting standards and their benefits & limitations:.................5
TASK 2............................................................................................................................................6
Computation of Ratios of Tesco Plc for Two recent years and analysis of computed ratios:.....6
Critical Evaluation and Comments:.............................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Financial accounting term implies to specialise accounting division that maintains
records of the corporation 's financial activities. Using structured criteria, transactions are
documented, listed and reported in fiscal reports or financial statements, like P&L, balance sheet
etc (Schroeder, Clark and Cathey, 2019). The study consists of 2 major task, first covers
comprehensive discussion about conceptual-framework and its purposes, key aims of financial
reporting and, benefits & limitations of GAAP. While Second task covers thorough evaluation of
Ratios and comment on performance of Tesco Plc, UK based top supermarket-chain.
TASK 1
(a). Conceptual Framework and Its major purposes:
Conceptual framework in context of financial reporting relates to system of concepts and
goals which give rise to systematic consistent series of principles or standards for
effective financial reporting (Dennis, 2018).
Purpose of Conceptual Framework:
The vital purposes for the development of the accepted conceptual framework for
the financial reporting are that it establishes a mechanism for the interpretation of accounting
standards, basis for the settlement of accounting conflicts, basic concepts which further
shouldn't be replicated in specified accounting standards.
The another purpose of Framework is to support regulatory bodies and governing bodies
which are responsible for issuing accounting standards, in the formulation and revision of
accounting standard based on common concepts, to support preparers establish standardized
accounting policies with regards to areas not addressed by standards or where selection of
accounting policies is made, and to enable all relevant parties and entities to comprehend and
interpret standards.
(b). Objectives of Financial Reporting:
The primary objective or aim of the financial reporting process is to control , evaluate
and reporting or documenting the incomes/profits of a corporation. The aim of different reports
used in financial reporting is to evaluate key usage of capital-funds, cash flows, market results
and financial stability of corporations. This lets business and its investors to make informed