Financial Reporting: Assignment Sample
Added on 2020-12-24
6 Pages1464 Words186 Views
FINANCIAL REPORTING
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11. Assessment of every concept and assumptions that might be listed in fundamental andenhancing qualitative characteristics...........................................................................................1TASK 2............................................................................................................................................22. Illustrating application of every concept and assumption that might be applied in financialstatements for offering quality information to stakeholders.......................................................2CONCLUSION................................................................................................................................3REFERENCES................................................................................................................................4
INTRODUCTIONFinancial reporting is known as communication of financial information such as financialstatements to its users such as investors, suppliers and shareholders. The present report will givecritical assessment of every concept and assumption in financial reporting with reference tofinancial statements with their illustration.TASK 11. Assessment of every concept and assumptions that might be listed in fundamental andenhancing qualitative characteristicsThe conceptual framework is not known as standards as its objective is to assist board fordeveloping IASB standards and provide help to preparers for developing numerous consistentaccounting policies where is absence of applicable standard in place and assisting every party forinterpreting and understanding standards (Dumay, La Torre and Farneti, 2019). It helps in settinginformation to users for purpose of assessing prospects of future net cash flows of entity. Thesetype of information are required for giving information which is useful for forming decisionsrelated to resources to firm which attains objective of financial reporting. With context to itsfundamental concepts such as recognition, measurement and presentation IASB publishes revisedConceptual Framework, 2019). Recognitions in known as process to capture and inclusion onbalance sheet or income statement with item that accomplish criteria of asset, liability, income,equity and expenses. The multiple bases of measurement could give useful information to its users in variouscircumstances as it is categorised in two basis such as historical cost and current valuemeasurement bases. Historical cost gives information related to elements derived historical priceof particular transaction or event that gave increase to item considered for measurement. Thecurrent value measures gives monetary information related to elements using updatedinformation to show conditions at measurement date. Simultaneously, outreach performed byboard indicated about effective communication of information in financial statements that makerelevant information and contributes for faithful representation of financial position of entity.The concepts listed in fundamental quality are relevance, faithful representation andenhancing qualities. The relevance of information given through basis of measurement and isimpacted through features of asset or liability and directly contribute to future cash flows. Thefaithful representation of information offered through a measurement basis is impacted through1
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