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Financial Reporting Assignment Solution (Doc)

   

Added on  2020-10-05

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FINANCIAL REPORTING
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TABLE OF CONTENTSINTRODUCTION...........................................................................................................................11. Ascertaining the concept and objective of financial reporting................................................12. Identifying the conceptual and regulatory framework which highlights the purpose and keyprinciples......................................................................................................................................23. Determining the key stakeholder in an organisation and benefits of them in the organisation.....................................................................................................................................................24. Determination of the value of financial reporting for meeting industrial growth andobjectives.....................................................................................................................................35. Preparation of financial statements..........................................................................................36. Interpretation of ratios of FTSE 100 index companies............................................................77. Difference between IAS (International Accounting Standards) and IFRS (InternationalFinancial Reporting Standards)...................................................................................................98. Explaining IFRS benefits.........................................................................................................99. Varying degree of compliance with IFRS by world organisations and how they impact onnation.........................................................................................................................................10CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11
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INTRODUCTIONTo determine the operational performance and the business objectives here will be necessityof making adequate financial reports. Thus, these are consisting of various information such asincome, expenditures, assets and liabilities of firm in a particular period. Thus, such informationhas been addressed in various accounts which were later being summarized and analysed by theaccounting professionals. In the present report there will be preparation of various accountsalong with the analysis over the importance of such reporting techniques in meeting theindustrial objectives. Moreover, there will be analysis over the financial performance of theFTSE listed organisation over the period of 2 years.1. Ascertaining the concept and objective of financial reportingFinancial disclosure consists with preparation of various financial accounts which includesincome statement, balance sheet, cash flows and statement of change in equity. Thus, preparationof such accounts will be helpful to communicate the business performance among the externalparties (Johnston and Petacchi, 2017). Stakeholders will have appropriate analysis over the database on which they can make investments decisions. Along with this, the internal management ofoperations will also become soothing and adequate to the professionals in terms of analysing thecost reduction opportunities.Objectives behind preparing the financial reports:To communicate the business information among internal as well as external stakeholderwith a motive to retaining the adequate growth and brand value in the external market. It mustsbe consists of clear and transparent information which are to be disclosed among theprofessionals with a motive to have appropriate analysis over the data base (Bonsall IV and et.al.,2017). Moreover, there are various objectives to the financial reporting such as:Investment decision-making: The main objective of the financial reports is for decisionmaking, analysing profitability, liquidity and efficiency of the firm. Users of such informationare basically keen to know the dividend pay-out ratio and the profits retained by the firm in ayear. Therefore, they analyse the organisation on the basis of amount of return is being payableby them in the business.Cash flow management: The influences of financial reporting have been enacted inmeasuring the performance of the organisation. There will be appropriate ascertainment of1
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transactional activities (Cohen, Krishnamoorthy and Wright, 2017). The inflows, outflows ofoperating activities will bring outcomes to manage the cash flows of organisation.Stabilising the financial health: Reporting plays main role in managing the financialhealth of the organisation which can have appropriate management and execution of theoperational analysis that will be helpful in meeting the gains of the business. It consists of allinformation tat will be helpful to the managers in stabilising the capital structure of theorganisation.2. Identifying the conceptual and regulatory framework which highlights the purpose and keyprinciplesThe influences of various elements in financial reporting system which in turn will have impactson managing the financial stability in the business. Therefore, it can be analysed as:Conceptual framework: The framework and funnelling agent which helps accountingprofessionals in preparing the statements are basically derived from IFRS. There has beenanalysis over transactional data base which can bring accurate information among external users(Đurković, Dmitrović-Šaponja and Đurković, 2017).Principles: The accounting and reporting techniques which have been impacted byvarious boards and institution to guide the professionals in recoding the transactions at the rightplace. It includes guidelines generated by GAAP, IASB, IAS and IFRS which are consisted ofinternationally accepted accounting principles and guidelines to manage the operations.Qualitative characteristics: The method of recording transaction and analysing them tohave accurate outcomes which will help businesses in decision making and bringing reforms inthe performance. Comparability, verifiability, understandability and timeliness of disclosing thefinancial information among the users are the prime objectives behind preparing financialreports.3. Determining the key stakeholder in an organisation and benefits of them in the organisationThere are various stakeholders which are being associated with the business and areattentive towards obtaining the information relevant with progress, profitability, liquidity andefficiency of the firm (Ge and et.al., 2018). However, the main users of the financial informationare:Owner: The owner in an organisation have full rights to know the financial conditions ofthe firm. They make investment in the various operations as well as plans for the business2
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