The difference between IAS and IFRS
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Added on 2021-02-20
The difference between IAS and IFRS
Added on 2021-02-20
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Financial Reporting
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1LO1..................................................................................................................................................1P1 Financial reporting concept and purpose................................................................................1P2 Conceptual and regulatory framework and the qualitative characteristics of financialinformation...................................................................................................................................2P3 Key Stakeholders or users of Tesco and how they take benefits from financial information ......................................................................................................................................................3P4 Value of Financial Reporting:................................................................................................4LO2..................................................................................................................................................5P5 financial statements of Golwin plc. Company........................................................................5P6 Ratio Analysis.........................................................................................................................7LO3..................................................................................................................................................9P7 Difference between IAS and IFRS.........................................................................................9P8 Benefits of IFRS...................................................................................................................11LO 4...............................................................................................................................................12P9 Varying degree of compliance of IFRS across the world.....................................................12CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13
INTRODUCTIONFinancial reporting is the process of presenting financial statements to the variety ofstakeholders and directors to take the useful decision regarding the company. As a junioraccountant of Grant Thornton, which is a large accountancy firm; various issues and componentof financial reporting are identified such as the regulatory and conceptual framework, internaland external stakeholders etc. Tesco is a British multinational company whose headquarters arein England, UK. The financial reporting helps Tesco to regulate the financial transaction andstatements. The report highlights the concept and purpose of financial reporting and the differentstakeholders who use this information. It explains various regulatory and conceptual frameworkto provide guideline for the presentation of financial reports. Report also explains the usage offinancial reporting obligating companies aims and objectives. It presents the financialinformation of Godwin Plc. Company by income statements and balance sheet. It also highlightsthe usage of various accounting standard such as IFRS and IAS and their benefits to thecompany.MAIN BODYLO1P1 Financial reporting concept and purposeFinancial reporting: The presentation of financial data and information to the differentstakeholders such as customer, creditors, suppliers, shareholders, employees etc. is known asfinancial reporting. It helps to take useful decision regarding the improvement in financialperformance of company. Different stakeholders and investors use the financial reporting data totake decision regarding the investment.Purpose of financial reportingProvide financial information: The main purpose of financial reporting is to provide theinformation regarding the financial statements to the different stakeholders and help them to takethe decision that whether they have to invest in the company or not (Clatworthy and Peel, 2016).The financial statements content the information regarding the growth of the company, profit,sales, cash flow etc. in particular accounting period.Track cash flow: The aim of financial reporting is to track the cash flow of particularaccounting period and identify that whether the company is capable to accomplish the aim and1
objective or not. It also used to pay the current debt and day to day expenses of the organizationon the given time. It helps to track the cash inflow and outflow of the Tesco company.Reliability and accuracy: The purpose of financial reporting is to regulate the reliabilityand accuracy of the data and identified that all the practices used by Tesco to prepare financialinformation are legal. It helps to build up the trust of the investor that the presented informationin the annual report or published source are accurate and free from manipulation.P2 Conceptual and regulatory framework and the qualitative characteristics of financialinformationConceptual framework: It refers to the guideline or framework which provide the basicdetails regarding the financial information and statements to develop the understanding of theusers. It is developed by international accounting standard Boards to measure and regulate theuniformity of accounting methods across the borders. Requirement of conceptual frameworkThey are required to provide a set of guideline to prepare and present the accountinginformation.It helps the user to compare and interpret the data to take useful decisions.It is required to regulate the accounting methods at international level.The conceptual framework principles say that the use of general accepted accountingprinciples and accounting standard are useful for the company to accomplish aims andobjectives.Regulatory framework: It helps to regulate the financial information, practices andmethods. Regulatory framework is used to ensure that company follow the accounting standardin prescribed rules and regulation. Requirement of regulatory frameworkIt helps to identify that the need and requirement of financial users are fulfilled by thefinancial statements or not.Regulatory framework is required to regulate the behaviour of companies and theirdirectors towards in the various investors (The regulatory framework, 2012).Regulatory framework is used to ensure that the information is reliable, comparable andconsistent. It helps to gain the global investment from the market.2
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