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Financial Reporting Solved Assignment - Doc

   

Added on  2021-02-19

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FINANCIALREPORTING

Table of ContentsINTRODUCTION...........................................................................................................................3QUESTIONS...................................................................................................................................31. Context and purpose of financial reporting.............................................................................32. Conceptual, regulatory framework, key principle and qualitative characteristics. ................43. Main stakeholders of organisations and benefits of financial information for them.............64. Value of financial reporting for meeting the organisational objectives and growth...............75. Presentation of financial statements as per IAS 1...................................................................86. Interpretation and communication of financial performance of listed company in the FTSE100.............................................................................................................................................107. Difference between international accounting standard and international financial reportingstandard.....................................................................................................................................128. Evaluation of advantage of international financial reporting system....................................139. Degree of compliance with the international financial reporting standards..........................13CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15

INTRODUCTIONThe financial reporting can be defined as a process of presenting the financial statementsand information to the managers and external stakeholders (Pelger, 2016). The main purpose ofthese reports is to aware stakeholders about financial performance of a company during aspecific period of time. In the context of organisations, there are a wide range of operations andactivities which are being performed by different departments. Herein, it is essential to knowabout the performance of all the activities in the terms of profit and this is done with the help offinancial reports. Eventually, the financial reports are prepared and presented at the end of anaccounting period. To understand in broad sense about term financial reporting, Deloittecompany is selected which provides financial services to wide range of customers. Herein, the project report, conceptual and regulatory framework of the financial reports ismentioned. As well as benefit to the stakeholder of these reports is also discussed. Apart from it,variation between the international accounting standard and international financial-reportingstandard is included in the report. Along with, various type of financial reports and statementssuch as P&L account, balance sheet etc. are prepared on the basis of given information and data.QUESTIONS1. Context and purpose of financial reporting.Financial reporting:It is concerned with the disclosure of company's financial statements to the managementand the owners i.e. the shareholders for the purpose of disclosing the financial health of theorganisation (Perera and Chand, 2015). It is the analysis of financial statements prepared in anorganisation which majorly consists of income & expenditure statement, cash flow statement andbalance sheet. It is a legal onus on the firm to disclose what its current financial health is to itsshareholders and promoters . The meeting of financial reporting standards by the organisationensures the stakeholders most importantly the shareholders that their stakes are duly taken careof. It is a vital part of sustainable corporate governance. Disclosing timely financial statements topublic and government helps organisation in building a compliance rapport along withestablishing market reliance. Purpose of financial reporting:

It helps the management to take profound strategic decisions about the future goals byrelying on the financial data provided by statements which discloses the current position.This information helps the managers in creating a base index of for future projections.The relevancy of information paves a way for emancipating future business strategies.The second most prominent purpose of financial reporting is it discloses the key successfactors and loss factors to the investors who have provided additional capital to thebusiness. It is a mandatory as well as ethical norm to do so. To safeguard the interests ofinvestors from fraudulent practices related to insider trading, financial scams etc., everynation has devised certain corporate laws requiring companies to disclose data to publicand government. Meeting financial reporting standards facilitates the statutory audit by providing wellcrafted documents to assist audit. Since it bores a good name to the company hencemakes it easy for it to gather capital from international and national sources easily ascompared to non compliant organisations. 2. Conceptual, regulatory framework, key principle and qualitative characteristics. Conceptual & Regulatory framework :Conceptual framework for reporting is promulgated by International accountingstandards board (IASB) which is the regulatory body for IFRS (Krishnan and Zhang, 2014). Theframework is very crucial in designing standards for different industries functioning in aneconomy. It drafts the fundamental concepts for financial reporting in designing standards andensure that standards are conceptually in consistency with the norms. Conceptual frameworkhelps companies in formulating accounting policies where IFRS standards doesn't apply to anindividual , at the same time makes it easier for the stakeholders to easily understand thestandards. Regulatory framework is necessary for financial reporting to control the ways toreport the statements. It creates scope for the companies, rectifies any errors and timely updatesthe standards. It ensures steady and full implementation of standards. The regulatory structureconsists of National financial standards, national law, market regulations, security exchangerules. UK has accounting standards board As its own financial reporting authority. It isauthorised by companies act 2006. There are other legislations like Sarbanes Oxley act whichaffects the accountability in UK.

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