Financial Reporting Assignment - Primax Electronics Limited
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Added on 2020-11-12
Financial Reporting Assignment - Primax Electronics Limited
Added on 2020-11-12
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FINANCIAL REPORTING
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................11. Outlining the purpose and context of financial reporting.......................................................12. Explaining regulatory and conceptual framework with its purpose, key principles andqualitative characteristics............................................................................................................13. Determining stakeholders with their benefit through financial information...........................34. Importance of financial reporting for accomplishing organizational growth and objectives.45. Reflecting financial statements...............................................................................................5a. Statement of Profit and loss....................................................................................................56. Explaining and interpreting financial performance of Primax Electronics Ltd......................87. Difference among IFRS and IAS..........................................................................................108. Evaluating advantages of IFRS.............................................................................................109. Identifying degree of compliance with context of IFRS along with factors which impactcompliance................................................................................................................................11CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13
INTRODUCTIONFinancial reporting is disclosure of financial outcome and information to stakeholdersand management. It gives vital information on basis of financial activities and health oforganization to its stakeholders such as potential investors, government regulators, shareholdersand consumers. The present report will give brief discussion with reference to conceptual andregulatory framework and interpreting financial performance of Primax Electronics Limited.1. Outlining the purpose and context of financial reportingFinancial reporting are referred as records and documents which are collaborated fortracking and reviewing about money to make business. The main objective of financial reportingis to delivering information about share owners and lenders of business. It is a contributing asessential contract among business as investors and lenders will be gaining right to know aboutmoney spent or not. In the present economy, financial reporting has very huge role andcontributes to corporate governance. It serves for two primary objective as it provides help tomanagement for involving in effective decision making concerning to objectives of businessentity along with overall strategies. There will be appropriate disclosure in reports for helpingmanagement to discern with its weaknesses and strength of business entity and overall health aswell. In the similar aspect it is referred as mode for purpose of ensuring that business isoperating in efficient manner or not. In case, company is traded publicly then it is subject formultiple strict regulations as they are enforced through Securities and exchange Commission. Inorder for acquiring needs of users of its financial statements, organizations have to implementsystem of accounting for giving the required information. It is very important for regulatedsystem for purpose of ensuring required information to its particular users in specific format. It isvery useful on basis of informational requirement as it is attained via framework of financialreporting on basis of conceptual framework (Chen, Zhang and Zhou, 2018).2. Explaining regulatory and conceptual framework with its purpose, key principles andqualitative characteristicsThe auditors, shareholders and directors are referred as main party with context oftraditional corporate model. The regulatory framework helps in setting regulations and rules foraccounting and at international level, IAS board provides very wide regulatory framework onbasis of International accounting standards. It will directly imply to each European listed1
organization especially companies of UK as there are two main sources such as accountingstandards and Companies act. The International accounting standards has directly issuedconceptual framework along with sets of financial reporting concepts as it sets out its objective,describing reporting entity and with its boundary whereas qualitative characteristics of usefulfinancial information. This would be defining liability, asset, income, expenses and equity. Thecriteria for considering liabilities and asset in recognition or financial statements and guidancefor ridding de-recognition. This will be measuring guidance and bases with the application alongwith guidance and concepts on disclosure and presentation. Its principles are stated below:Information given through financial statements must be reliable and relevant where itschoice exists among approaches which are relevant and reliable which is mutuallyexclusive.If information has capability for purpose of influencing economic decisions of users isgiven on time for influencing those decisions. It could be reliable as it is dependent on users for representing it faithfully and showssubstance of transactions along with other undertaken events.Information could be comparable, understandable although it must be included infinancial statements in simple manner with its users (Amiram and et.al., 2018).2
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