Financial Reporting Assignment - IASB
Added on 2020-10-22
7 Pages1610 Words355 Views
Financial reporting
Table of ContentsINRODUCTION..............................................................................................................................31. Critically assessing the concepts/assumptions listed under the fundamental and enhancingQualitative Characteristics..........................................................................................................32. Illustrating how the concepts/assumptions may be applied to the financial statements toprovide quality information.........................................................................................................4CONCLUSION................................................................................................................................6REFRENCES...................................................................................................................................7
INRODUCTIONThe main purpose of financial reporting is to provide high-quality financial reportinginformation that are useful foe the external users of that reporting. IASB has framed a conceptualframework guidelines on the qualitative characteristics and concepts, which help in making thefinancial statement of a company. The present report will help in understanding the differentcharacteristics of conceptual framework for financial reporting. A brief discussion on the conceptand assumptions that are applied to the financial statements are present in the report.1. Critically assessing the concepts/assumptions listed under the fundamental and enhancingQualitative Characteristics.A theory in accounting that is prepared by a standard body through which practicalproblems can be tested objectively. Under the financial reporting, such theory are calledConceptual framework (Bauer, O'Brien and Saeed, 2014). Such frameworks helps in dealingwith the fundamental financial reporting issues such as the users of financial statements,objectives of preparing it. According to IASB, the general objectives of financial reporting is toprovide financial information of a company's financial performance to the users of the financialstatements like investors, lenders, shareholders and other creditors.The IASB bases its financial reporting standards on the conceptual framework that makesthe basic concepts and principles that act as a foundation of preparing and presenting thefinancial statement by a company. IASB framework help in addressing the objective of financialstatements, underlying assumptions of the statements which helps in establishing elements,recognition of elements, measurements of the financial statements.The qualitative characteristics of financial reporting helps in identifying the informationthat are most likely to be useful to the users of the financial statements of a company (Caruanaand Farrugia, 2018). As per IASB, The fundamental qualitative characteristics of a financialstatements are:Relevance: the relevant information in financial statements in capable of changing the decisionof financial user of that information a relevance of financial statement can be termed as makingthe financial information on the relevant data that has both predictive value and confirmatoryvalue. The financial information with predictive value have the inputs of the process of
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