The Importance Of Financial Reporting

   

Added on  2021-02-20

14 Pages4502 Words173 Views
Financial Reporting
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Table of ContentsINTRODUCTION ..........................................................................................................................1QUESTION .....................................................................................................................................11. Context and purpose of financial reporting.............................................................................12. Conceptual, regulatory framework, key principle and qualitative characteristics. ................23. Main stakeholder and benefit to financial information...........................................................34. Value of financial reporting to meet objective and growth.....................................................45. Main Financial statements.......................................................................................................56. Interpretation and communication of financial performance..................................................77. Difference among IAS and IFRS............................................................................................78. Benefits of International financial reporting system...............................................................79. Degree of compliance with IFRS............................................................................................8CONCLUSION..............................................................................................................................10REFERENCES .............................................................................................................................11
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INTRODUCTION In every type of businesses there are different department that are responsible to performday to day operation in profitable manner in order to attain the organisational goals (Financialreporting, 2019). So functioning of these section are interdependent to each other and are mainlylinked with accounting and finance department which provide useful resources to perform allkind of activities. The concept of financial reporting is associated with disclosure of meaningfulfinancial information to respectful stakeholder so that they can analyse overall performance andposition of company over a specific time period. The end process of accounting is related withfinancial reporting that have some typical elements such as financial statements, quarter andannual reports, prospectus and management analysis and decision. To better understand theconcept of financial reporting KPMG one of the largest financial accounting organisation whichprovide various useful financial services is selected. In this report, purpose, benefits to stakeholder, conceptual and regulatory frameworks andvalue of financial reporting for company is discussed. Additionally, the difference between IASand IFRS, benefits of IFRS and degree of compliance are discussed in this report. Differentfinancial statements like balance sheet, statements of equity and income statements are preparedwith the help of financial information. QUESTION 1. Context and purpose of financial reporting.In present time, financial reporting have a major role in world economy as it provideauthentic and reliable information to owner of company so that they might make effectivedecision for improving the entire economy by raising profit margin. Company owner are entitledto receive the yearly statements that summarise the real performance of various operation andemployees and also disclose the position which support in further assessment of most profitableinvestment during the reporting period (Bigus and Hillebrand, 2017). It is observed that financialstatements are required to meet the requirement of uses so KPMG implement authenticaccounting system which enable to deliver best information that is needed to make futureinvestment decision. Financial-reporting have some major purpose that are as follows: It deliver advantageous information to interested share-owner, investor and lender tomake associated decision. 1
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This support in different perspectives such as information related to credit to customer,lend of borrower and either to invest in respective business or to move to differentoption. Financial reports gives necessary information related with net inflows and outflows ofcash within company that include accurate time and unprofitable activities so that actualliquidity can be determined. It also shows the total obligation and economic available resources within company sothat upcoming cash flows can be properly determined. In case if there are number of subsection or partner working within main organisationthen financial reporting must be act as a main part of crucial agreement among thesedepartment which makes easy for the stakeholder and investor to have enoughknowledge about their money. In respective company, the concept of financial reporting is significant for its entireoperation and support to satisfy the actual need of common public thus it meet therevealing requirement. 2. Conceptual, regulatory framework, key principle and qualitative characteristics. Conceptual and Regulatory frameworks: The entire concept of financial-reporting is related with revelation of financial reportsthat involves valuable financial statements that ease the decision making for future improvement.There are number of stakeholder those are deeply involved with annual financial position andstatus of company such as investor, financial institutions, creditor and general public those wantsto be part of business sharing (Breuer, Hombach and Müller, 2017). Regulatory frameworksbenefit in making valuable prediction for increasing efficiency of financial standards andprinciples which provide further support in attaining the financial control. In respective companythere are some meaningful procedures and principles that followed under IFRS these are asfollows: These reports helps to give valuable ideas that support to ascertain the actual requirementof total amount that is needed to run the operations in profitable manner.It benefits in creating and managing the already implemented with aid of the accountingstandard. 2
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