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Financial Reporting Analyses

Added on - 29 Dec 2020

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Financial Reporting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11. Analyse the context and purpose of financial reporting........................................................12. Conceptual and regulatory framework and qualitative characteristics of financialinformation..................................................................................................................................23. Stakeholders of an organisation and its benefits from financial information.........................24) Importance of financial reporting in context of organisational objectives and growth..........35. Analysis of financial statement of organisation......................................................................46. Two years financial statement analysis of Marks & Spencer................................................57. Difference between International Financial reporting standards and InternationalAccounting system.....................................................................................................................68. Benefits of international financial reporting standards..........................................................79. Degrees of compliance with IFRS and its factors which influence company.........................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10.......................................................................................................................................................10
INTRODUCTIONFinancial reporting provides the finance related information to an organisation. Throughit position of a corporation can be understand and which help the business to take effectivedecisions. In the report chosen company is Mark & Spencer which is British Multinationalretailer from United Kingdom. It main aim of this is to analyse the financial statement oforganisation. It covers the following topics such as: context, purpose and objectives of financialreporting, regulatory framework & key principles, benefits and statement of profit & lossaccount, changes in equity and balance sheet. Apart from this it discuss about the differencebetween IAS and IFRS.TASK 11. Analyse the context and purpose of financial reportingFinancial reporting helps the company to get financial results of its business related to aparticular period of time. It involves statement of cash flow, balance sheet and profit and lossaccount. It helps the business to know its position through which an organisation can understandit is in profit making or loss making situation.Financial reporting provides useful information and data to corporation which helps it totake important decisions related to money related matters. It gives appropriate and realisticfinancial information to the stakeholders of company and on the basis of this they takeinvestment related decisions. Management of Mark & Spencer can make planning and strategieson the basis of financial information.Purpose of financial reporting are as follows:To provide accurate information related to profits and financial position of corporation.To gives data to the management for planning and strategic decisions.It provides required information regarding obtaining and managing assets of the business.To effectively control financial resources with in the company (Shivakumar, 2013).The main objective is to analyse the current status related to financial matters for aspecific time period of time.It helps to an organisation in making essential decisions so that it can expand its businessand make effective investment as a result Mark & Spencer can generates more returns. So
financial reporting is very important for a corporation through which management canknow about its financial position.2. Conceptual and regulatory framework and qualitative characteristics of financial informationConceptual and regulatory frameworkConceptual framework incorporates regarding the quantitative and subjective issues. Thestructure can be followed by various disciplines but it particularly accompanying to financialreporting, a regulatory and conceptual framework which is provided by IASB. It provides betterinformation and financial data so that Mark & Spencer can take better decisions and effectivelycontrol its operational activities. It helps to develop relevant ideas to evaluate essential capitalsupport. Organisation can use regulatory and conceptual framework to control its unnecessaryfinancial activities and follows the rules and regulations as per the guidelines of IASB. Theseguidelines are forced as IFRS. Necessity of IFRS are as follows:Fundamental accounting concepts are set and controlled by International financialreporting standards. IFRS can be use by companies for better control and it improves accountingcontrols and the standards (Kim and Zhou, 2014).Qualitative characteristics which makes financial information realistic:International financial reporting standards are extensively used by companies so that itcan it can set its standards as per the rules and regulations of IFRS. It is essential at internationallevel so that financial information can be get more accurately and reliable. International financialreporting standards are recognised by the international Organisation of Securities Commissionfor the purpose of utilization IFRS for effective management and control in the company. SoMark & Spencer can apply this concept and improves it financial management system (Jung,and Weber, 2014).3. Stakeholders of an organisation and its benefits from financial informationStakeholdersStakeholders are the group of persons who have interest in the company. From thedecisions and actions of an organisation they can get influenced and their interest has affected. Itinvolves directors, employees, suppliers, creditors, government, shareholders etc. These are theauthorise persons which associated with investment and other organisational decisions. Businessof Mark & Spencer can affect the stakeholders in both positive and negative way.Internal stakeholders of Mark & Spencer and its benefits from financial information
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