Financial Reporting: Assignment

FINANCIAL
REPORTING

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Regulatory frameworks and governance of financial accounting..........................................3
P2 The purpose of the financial reporting for meeting the organisational development,
objectives and growth..................................................................................................................4
TASK 2............................................................................................................................................6
P3 Interpretation of profit & loss, balance sheet and cash flows.................................................6
P4 Financial ratios for organisational performance and investment...........................................7
TASK 3............................................................................................................................................8
P5 Benefits of international financial reporting standards (IFRS) and international accounting
standard (IAS)..............................................................................................................................8
P6 Models of financial reporting and auditing............................................................................9
TASK 4..........................................................................................................................................11
P7 Differences and importance of the financial reporting across the countries........................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
APPENDIX....................................................................................................................................16

INTRODUCTION
Financial reporting is the presentation of financial result of the organisations in a
particular format (Jung and Weber, 2014). Eventually, financial reporting states about the
financial performance of the companies for a particular time period as well as it is necessary to
the companies to prepare the financial reports not only for the own purpose but also for external
parties. Herein, the project report, the objectives and regulatory frameworks of the financial
reporting are mentioned. As well as benefits of IFRS (international financial reporting standards)
and IAS (international accounting standards) are described in the report. In this report Lloyd
banking group Ltd company is selected to understand in detail about the financial reporting and
company's financial statements are also described.
TASK 1.
P1 Regulatory frameworks and governance of financial accounting.
Financial reporting: It is a combination or discloser of financial results which include
the various information which help the internal as well as external stakeholders to take their
decision on the basis of these financial reports (Ryan, 2012). It plays very crucial role in the
world's economy and it's main purpose is to provide relevant information to their users such as
owners. Division between the ownership or control over the company and it occurs in the public
limited company. Where shares are sold to the general public through share market. At the time
of preparing reports, shareholders are not interfere in the management decision that's why they
appoint directors. Important decision taken by the directors to the interest of shareholders. Owner
of the company get the final report which include the summary and financial reports which
shows the financial position of the company. It further helps in taking decision regarding further
investment and strategies.
Regulatory framework: It is a set of accounting practices which include the various
standards and it also contain some rules and principle to handle companies accounts. Purpose of
this framework is to prepare financial statements and it is important to fulfil the requirement.
Lloyd banking limited company follow the International Financial Reporting Standards (IFRS)
to produce their financial statement.
International Financial Reporting Standards (IFRS): It is a set of accounting
standards which is develop by the non- profit organisation and it also called International

Accounting Standards Board (IASB). Lloyd banking limited company follow IFRS regulatory
framework to identify how public or private organisation disclose their financial reports. This
framework provide the general guidelines which is required by the business at the time of
preparing their financial statements. Their are various standards followed by the Lloyd banking
limited company but some of it discussed below:
IFRS-2 (Share based payment): Organisation need to specify this standard if they
undertake a share based payment which include the issue of share options (Martínez‐Ferrero,
Garcia‐Sanchez, Cuadrado‐Ballesteros, 2015). Lloyd banking limited company required to
include these things in the financial statements.
IFRS-3 (Business Combination): It include 3 principles which define that how business
combination acquire. Firstly recognise their financial statements in terms of assets or liability of
the company and how much they acquire interest from other parties. Secondly acquire the
goodwill at the time of combining business. Last one is to determine that, what information
required to be disclose for their users.
IFRS-4 (Insurance Contract): In this accounting standard, organisation need to specify
some aspects for the financial reporting regarding insurance contract. It will be issued when this
contract not applied in the IFRS-17. Insurance contract means, when one party accept the
insurance risk from another party and it also important that front party agree to be compensate
for this.
IFRS-7 (Discloser of Financial Instruments): This accounting standard include the
discloser of financial instrument in the financial statement. So internal as well as external users
can evaluate the performances and financial position of the company (Albu and Albu, 2012). It
also include the information regarding risk which occur through financial statements. These are
the quantitative discloser but it also include the qualitative discloser too. Such as management
objective, aim of the organisation, different policies and process to reduce risk.
P2 The purpose of the financial reporting for meeting the organisational development, objectives
and growth.
Financial reports shows the actual image of the companies with the help of different
financial statements like balance sheet, profit & loss etc. In broad sense, the financial reports are
beneficial for the development and growth of the companies. Herein, the aspect of the project
report the Lloyd banking limited company prepares different kind of financial reports like