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Report on Financial Reporting and Its Significance

   

Added on  2020-06-04

10 Pages3155 Words58 Views
FINANCIAL REPORTING

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Context and purpose of financial reporting.....................................................................................1Conceptual and regulatory framework as well as their requirements and key principles...............1Main stakeholders of company and way in which they benefit from financial information...........2Value of financial reporting for meeting organization objectives and growth................................3Format of income statement and balance sheet as per IAS 1..........................................................3Uses of company financial statements to meausre company performance.....................................5Difference between IAS and IFRS..................................................................................................6Benefits of using IFRS.....................................................................................................................6Compliance of IFRS and factors in nation that may affect its compliance.....................................7CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8Table 1Income statement.................................................................................................................3Table 2Balance sheet.......................................................................................................................4Table 3Ratio analysis of Tesco........................................................................................................5

INTRODUCTIONFinancial reporting is give due importance by the firms in their busines. This is because itassist them in making busines decisions more accurately. In the current report detail discussion iscarried out on financial reporting and in this regard its significence is discussed. Apart from this,varied benefits of adopting IFRS are discussed in the report. By making changes in trial balanceincome statement and balance sheet is prepared in the report. At end of the research study,conclusion section is prepared and in this way research study is carried out. Context and purpose of financial reportingFinancial reporting refers to the reports that are generated quarterly and annually for thestakeholders and buisness firms. In financial reporting varied statements are prepared likeincome statement, balance sheet and cash flow statement. All these statements have dueimportance for the firms and their stakeholders because these statements reflect the currentcondition of the busines firm and its strong as well as weak points. It is very important to workon all these areas because by doing so weak point can be converted in to strong one (Beyer andet.al., 2010). Financial reporting help managers in spoting areas where they must work and assistshareholders in deciding whether they must make investment further in the firm or exit fromsame. Main purpose of financial reporting is to keep informed managers and other stakeholdersabout company condition and to assist them in making strategic business decisions. On basis ofidentified weak point managers can determine strategic direction in which business need to betaken so that maximum profit can be earned and loss can be minimized in the business. It can besaid that there is huge significence of financial reporting for the business firms. Conceptual and regulatory framework as well as their requirements and keyprinciplesConceptual and regulatory framework is prepared because they determine that in whichmanner different elements need to be reported in the company accounts like income statementand balanced. Rules that need to be followed to prepare these statements is also determined andthis ensured that computation is done in accurate manner and comparison can be made betweenfirms fairly as well as their performance can be measured accurately. Thus, there is hugesignificence of conceptual and regulatory framework. Qualitative characteristics make financialinformation reliable in nature. It can be observed that there are some of qualitative characteristics1 | P a g e

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