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Financial Reporting Introduction 3

   

Added on  2020-12-23

11 Pages2877 Words264 Views
FINANCIAL REPORTING
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Table of ContentsINTRODUCTION.......................................................................................................................................3MAIN BODY..............................................................................................................................................31. Purpose and concept of financial reporting..........................................................................................32. Conceptual and regulatory framework of financial reporting.............................................................33. Key stakeholders of organization and their need of using financial reports.........................................44. Value of financial reporting for meeting organizational objectives and growth.................................55. International accounting standard and international financial reporting standard with their benefits...56. Evaluation of financial reporting through application of theories and models.....................................67. Differences in financial reporting across the world............................................................................88. Degree of compliance with IFRS across the world.............................................................................8CONCLUSION...........................................................................................................................................9REFERENCES..........................................................................................................................................10
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INTRODUCTIONFinancial reporting refers to the system of recording the financial information in form of statement in order to provide information to the stakeholders regarding the financial position and performance of firm. In this study, Marks and Spencer will be consider which is involved in fashion industry and provide clothing for men, women and kids. This assignment will include the concept and purpose of financial reporting. Moreover, It will provide understanding about theconceptual and regulatory framework of financial reporting. Also, it will contain information about IFRS and IAS.MAIN BODY1. Purpose and concept of financial reporting Financial Reporting is related to recording of financial information which assist in providing useful information to the stakeholders for their decision making. The main purpose offinancial reporting is to provide accurate and useful information to the stakeholders. The purposeof financial reporting is to record the various operations of business in the statement form. Thereare different financial reporting statements which provide different information to the users. It consists of income statement, balance sheet and cash flow statement.The income statement consists of income and expenditure for a specified period which provides understanding about the profitability of the firm by comparing the incomes with that of expenses to identify the net income or loss for a period. Balance sheet is the statement which is prepared to identify the financial position of the firm through use of the assets and liabilities to identify the liquidity position of the company (Leuz and Wysocki, 2016 ). Cash flow statement records the information n about the cash inflow and outflow for a period to identify the future cash requirement of business. The purpose and concept of financial reporting is to provide accurate information to the investors and other stakeholders to get understanding about the company’s profitability and position for various decisions making. 2. Conceptual and regulatory framework of financial reportingThe conceptual framework of financial reporting is the set of fundamental concepts which are used for reporting of information in the report formats. It assists in developing accounting policies for companies. The conceptual framework provides the understanding about objective of general purpose of financial reporting (Williams and Dobelman, 2017). Moreover, itdefines the qualitative characteristics of useful financial information. It defines the elements of the various statement such as assets, liabilities, income, expense equity etc. Also, it defines concepts regarding capital and capital maintenance. The regulatory framework of financial reporting gives information about the regulatory standards which are made for the compliance of International financial reporting framework. It means the financial reporting are regulated on the
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