(PDF) Financial Reporting - Assignment Sample
Added on 2020-12-10
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Financial Reporting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK...............................................................................................................................................11. Explaining qualitative characteristic of concepts for financial reporting...........................12. Concept applied while preparing the financial statements.................................................2CONCLUSION................................................................................................................................3REFERENCES................................................................................................................................4
INTRODUCTIONFinancial reporting is the representation of the formal record of the financial activities of aperson, entities or other businesses. It implies for the process of identifying the strength andweaknesses of the enterprise in monetary terms by setting up strategic relationship between theelements of income and balance sheet statement. The present study describes the conceptualframework and objectives of the financial reporting. Furthermore, it explains about thequalitative characteristics of the reporting and the assumptions that are taken into account whilepreparing the financial statements.TASK1. Explaining qualitative characteristic of concepts for financial reporting.The conceptual framework addresses the objectives of the financial reporting and thequalitative characteristics of the financial information. The framework also includes therecognition, measurement and disclosures (Satsuk and et.al., 2018). The primary purpose offinancial reporting is to provide information to the internal and the external users like investors,creditors, managers, owners, government etc. Fundamental qualitative characteristics-Relevance- the confirmatory value and the predictive value are interrelated to each otherand makes the financial information more relevant (Dou and et.al., 2018). It is veryimportant the financial information must contain a high relevance so that users can makea difference in their decision making. Information that fulfils the material concept isaccounted as more relevant. Faithful representation- It means the representation of the economic phenomenon innumber or words in the financial reports rather than just representing only the legal form.A useful information is one which is not only relevant but also faithfully represent thepurpose for which it is framed. This qualitative feature seeks to maximization of theunderlying quality such as neutrality, error free and completeness.There are few characteristics which enhances the quality of financial reporting and arementioned as follows:Comparability- Information about the entity's reporting becomes more useful when it canbe compared with the information of the other entities (Amiram and et.al., 2018). It
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