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Financial Reporting - TaxCom Assignment

   

Added on  2021-02-20

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Financial Reporting

Like theTable of ContentsINTRODUCTION...........................................................................................................................1QUESTION .....................................................................................................................................11. Context and purpose of financial reporting........................................................................12. Qualitative features of financial information.....................................................................23. Main Stakeholder and benefit to financial information......................................................44. Value of financial reporting to meet objective and growth................................................55. Main Financial Statements.................................................................................................66. Interpretation and communication of financial performance.............................................87. Differences between IAS and IFRS.................................................................................118. Advantages of International financial reporting system...................................................119. Degree of compliance with IFRS.....................................................................................12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14

INTRODUCTIONThe concept of financial reporting mainly focuses on the accounting process and standardin establishing and reporting company financial statements (Financial reporting, 2019). It isrelated to the financial results of company which are prepared and presented to general publicand interested parties. The primary idea of financial reporting is related to the transparency ofsignificant financial data presented before stakeholders. Based on this data, in a specified periodof frame, they can examine the general performance and current business condition. In addition,it present few typical factors of financial reporting such as annual report, crucial listing ofcompany, financial statements and essential decision related. In this report The TaxComAccountants have been selected in order to better understand the concept of financial reporting. In this report, context and purpose of financial reporting, qualitative characteristics whichmakes the financial information more reliable, main stakeholder of company and their benefitfrom financial information, value of financial-reporting are discussed in this report. In addition,income statements, statements of change in equity and statements of financial position have beenprepared. Apart from the difference between IAS and IFRS and its benefits with degree ofcompliances are discussed. QUESTION 1. Context and purpose of financial reporting.In business world, it has been observed that financial reporting have a major role to beplayed in developing and establishing world economy. The main objective is to make sure thatuser have the effective and meaningful information so that important decision are made in orderto increase efficiency of business. Managers obtain an annual statement summarizing theirbusiness's efficiency and situation to evaluate how often their business has been accomplishedover the accounting era (Belal, 2016). With the support of financial statements such as incomestatement, balance sheet and equity change declaration, the crucial economic data is available.They analyse general efficiency on the grounds of these accounts and then make efficient choicesto enhance profitability. There is a systematic manner to prepare these accounts such as financialstatement are produced annually and summarize the actual efficiency of several activities andmembers of company. Financial reporting comprises of transparency of financial results to topmanager within an organisation organization over a particular span of moment. 1

In addition, it is stated that it help in making valuable decision regarding most profitableinvestment which ensure to make more profit in order to attain the desired results. It gets thatfinancial statements significant for The TaxCom Accountants to fulfil the requirement thencomply with a suitable management system (Burton and Jermakowicz, 2015). It provides thecorrect data to create a potential investment judgement that is crucial. There are number of usefulpurpose of financial reporting that are defined below: Financial reporting have the primary aim relates to efficient decision-making andcompany goal and general policies.It will assist to provide accurate and relevant data to certain stakeholders who have beenattached to the business and assist in the method of decision making. This aid in multiple appearances such as credit-related data to a client, borrower lendingand either investing in a specific company or moving to a different option.A company's financial reports include significant data that has been linked through anorganisation to total net inflows and outflows. It includes adequate time and uneconomicoperations to assess a company's liquidity.Financial information assist leadership to acknowledge corporate achievements and faultsas well as general economic health. If there is a range of subdivisions or partners operating within the parent company thenfinancial reporting has to be the primary component of a key contract between different segmentsthat makes it simple for stakeholders and investors to have sufficient understanding of cash(Weil, Schipper and Francis, 2013).2. Qualitative features of financial information.Conceptual and Regulatory framework:In business era, the main user of general financial reporting are different current andpotential capitalist, creditor and other lender. They acquire the collected information in concernto make useful decision in context to buy, sell or preserve equity or any debt instruments. Ithelps to offer or balance debts or other types of credit that might influence the actions ofexecutives affecting the need for financial assets within organization during an accounting year(Che Azmi and Hanifa, 2015). The concept or idea of financial reporting is linked to annualreports which describe the various economic kinds of accounts that contribute to potentialenhancement in judgement making processes. In context of making useful prediction which2

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