Financial Reporting Assignment PDF - Marks and Spencer

Financial Reporting

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1.context and purpose of financial reporting..........................................................................1
2.conceptual and regulatory framework, purpose and key principle, and the factors by which
qualitative characteristics makes the financial statements more reliable...............................2
3.stakeholders of the organisation and their benefits in financial information......................3
4.importance of financial reporting to achieve organisational growth...................................4
5.information of main financial statements as per IAS 1.......................................................5
6. Interpreting financial performance for Marks and Spencer (2017 and 2018)....................9
7.difference between International accounting standards and international financial reporting
standards...............................................................................................................................10
8.benefits of IFRS.................................................................................................................11
9.degrees of compliance with IFRS in organisation across the world and the factors which
impact compliance................................................................................................................12
Conclusion.....................................................................................................................................13
REFERENCES .............................................................................................................................14

INTRODUCTION
To measure business performance of the year financial reporting is the essential element
of business enterprise. In this present report explanation is given on purpose of financial
reporting. Chosen organisation in this report is Marks and Spencer. An explanation is provided
on legal and regulatory framework, their requirements to make financial information more
reliable. Further, main stakeholders of organisation and their contribution to make financial
statements more reliable is to be discussed with the value of financial reporting meeting
organisation objectives. Further, main financial statements are to be provided in this report.
Statement is also provided by comparing last two years financial statements to measure
company's overall performance. Further, benefits of IFRS and degrees of compliance with IFRS
and difference between IFRS and IAS is to be explained.
MAIN BODY
1.context and purpose of financial reporting
Financial reporting plays an important role in the business organisation. It is used to
measure the amount of money (in and out) from organisation(Bushee, Goodman and
Sunder,2018). Primary motive to make financial report is to provide correct information to
owners and shareholders of the organisation about the overall performance of the company.
Financial reporting or statements provides an information regarding results of business
operations that is there financial position, and information regarding cash flows of organisation.
Certain points which shows importance of financial potions are as follows- Credit decision- financial reporting is mainly important for the creditors, and also to
lenders as they are the only one which wants entire set of business operations. By
analysing these informations they will be able to decide whether to invest more in
company or to stop doing investing in organisation.
 For investment decision- financial reporting is also important for investors of the
organisation. They analyse financial information just to decide their decision of
investment is business was correct or not and also to analyse market per share so that they
will able to decide price at which they want to invest. Taxation decision- government also analyse financial statements of the organisation just
to decide amount of tax to charge on the business enterprise which is according to their
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assets or income of the organisation. This related information will only generated by
analysing their overall financial statements(Chen and et.al., 2018).
 Union bargaining decisions- unions of the organisation will also analyse financial
reporting of the organisation because based upon that information union will able to
decide their bargaining position and the ability of organisation to pay their demands.
These are the elements or user which analyse financial reporting of organisation just to
decide the overall performance of the organisation.
2.conceptual and regulatory framework, purpose and key principle, and the factors by which
qualitative characteristics makes the financial statements more reliable
Conceptual framework to prepare financial reporting is most important process for an
organisation which underline a particular concept for the preparation and presentation of
financial statements. This reporting is made with particular presentation because it provides a
necessary information to external users of the organisation by which they will able to decide
their amount of investment which they want to invest in company. Main elements which covered
by financial reporting are objectives of company, their underline assumptions, qualitative
characteristics, company's capital and capital maintenance etc. important key elements of the
financial reporting are assets, liabilities, equity, income and expenses. Regulatory framework of
financial reporting provides an effective procedure to prepare financial reporting.
Regulatory framework
Relevance- it provides a relevancy in preparing financial statements of the company so that users
of the company will able to understand financial statements easily.
Faithful presentation- it is a type of framework by which company will able to prepare faithful
presentation. Statements are prepared with proper analysis of data by which effective and
accurate results will appear on financial statements of the company.
Assumption on which this reporting is developed- mainly two fundamental assumptions are there
to prepare financial report that is accrual basis of accounting and going concern concept. Under
accrual concept of accounting entity record transactions when they occur and undergoing
concern concept to prepare financial statements company assumes its operations will continue in
future as well (Chychyla and et.al., 2018).
Qualitative characteristics which makes financial statements more reliable
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