Financial Reporting Assignment: TESCO
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Added on 2020-06-06
Financial Reporting Assignment: TESCO
Added on 2020-06-06
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Financial Reporting
Table of ContentsINTRODUCTION...........................................................................................................................1Q.1 Context and purpose of financial reporting..........................................................................1Q2. Conceptual framework using in financial reporting.............................................................3Q3: Identification of main stakeholders of TESCO and its benefits...........................................4Q4: Interest of financial reporting in organisation .....................................................................5Q5: Main financial statements....................................................................................................6Q6: Interpretation of financial performance of TESCO.............................................................8Q7: Comparison between IFRS and IAS..................................................................................10Q9: Determine various degree of compliance...........................................................................11Q8: Benefits of IFRS.................................................................................................................11Q.9 Degree of compliance of with IFRS by organisation across the world ............................12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
INTRODUCTIONFinancial position of an organisation can only be determined by evaluating the financialstatements and reports. These reports are published in the end of the year when final accounts aremade and set off (Nobes, 2014). This report is framed to explain the meaning of financialreporting and its important as decision making and strategic planning. Conceptual and regulatoryframework is defined with the purpose and principles. Effectiveness of qualitative characteristicis evaluated subject to make financial information reliable. Importance of stakeholders aredefined in respect of defining financial information of company. Financial statements of TESCOare interpreted to explain the importance of finance reporting. Meaning of IAS and IFRS withdifference are defined in this context. Degree of compliance with IFRS explained in this reportand benefits of IFRS also elaborated in financial reporting. Q.1 Context and purpose of financial reportingPurpose of financial reporting in TESCOFinancial reports of given organisation discloses present position information of a firmwhich is of great importance for its different stakeholders and investors. Typical components offinancial reporting are financial statements, prospectus, quarterly and annual reports (Rajgopaland Venkatachalam, 2011). Main objectives of this document is to provide information aboutfinancial position and changes in the same of an enterprises. Purpose of preparing financialreports in TESCO is explained below.It has two purpose of itself. First is within the organisation and second is for outside theorganisation. Financial report requirement within the organisation:-Help in taking effective decision regarding companies objectives and overall strategies.Maintaining financial health of the organisation. Good Financial health is necessary for referredenterprise for survive in competitive market.Financial reports of cited organisation include cash-flow, fund flow, balance sheet etc. whichhelp in easily knowing about the financial, operational activities and also shows the inflowand outflow of funds (Rensburg and Botha, 2014).It help TISCO in knowing their market position.In organisation employs need this to discuss their ranking, promotion and compensation.1
Owner and manager also need this to take important decision that effect continuous operations. It also shows income statements of TISCO which provides profit and loss, revenues, expenses ofa particular financial year.Another use of same statement of the organisation is for stakeholders and investors thatare present outside.Financial report requirement for outsider :-It help investors in taking decision regarding investment. Report of TESCO is basicallyused by different parties to take their investment decision.Stakeholders make use of report to asses the assets and liabilities of enterpriseIt provide information to stakeholders about financial health and activities related tofinance.It includes balance sheet and it assist in identifying that from what all resources companyis raising its funds.Helps in making money by providing financial reports to shareholders. Importance and significance of financial reporting to TESCO:-Financial transparency- It is very necessary for the company to know actual financialposition of company. Assets never having same value at the time of purchasing and selling.Evaluate tax liability- Help in knowing the tax liabilities of given organisation to bepaid. Tax rate of this firm is high.Mitigate errors- Accurate financial report are required to reduce costly errors. It help inremoving mistakes and errors.Build trust- Accurate report build trust in the eyes of investors and stakeholders. Theyonly need a sign of accuracy to but their money in TESCO.Improved payment cycles- In payment mode accounts payable, accounts receivable andaccurate financial report play a wide role.Better decision making, planning and forecasting- Financial report is necessary whendecision in TESCO needs to be made. Planning and forecasting can be done after seeing theassets and liabilities of the company.Q2. Conceptual framework using in financial reportingEvery business organisation need to follow some guideline in order to get betteroutcomes during the year. For this purpose, accounts managers used to analyse various financial2
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