(Doc) Financial Reporting Sample Assignment
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Added on 2021-02-20
(Doc) Financial Reporting Sample Assignment
Added on 2021-02-20
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FINANCIAL REPORTING
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................31. Context and purpose of financial reporting.............................................................................32. Conceptual and regulatory framework and the qualitative characteristics of financialstatements....................................................................................................................................43. Main stakeholders of an organization and the benefit to them from financial information....54. Requirement of financial reporting accomplishing the organization objectives and growth..65 Financial Statements as per IAS 1..........................................................................................76 Financial Statement of Admiral Group and interpretation on financial performance of thecompany......................................................................................................................................97 Difference between International Accounting Standards (IAS) and International FinancialReporting System (IFRS)............................................................................................................98 Benefits of IFRS.....................................................................................................................109 Varying degree of compliance in IFRS across world and factors impacting compliance ....11CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................13
INTRODUCTIONFinancial reporting deals with communicating financial information of company such asincome statements, statement of financial position to users of financial statement such ascreditors, investors and other stakeholders of company. Financial reporting is defined aspresentation of financial information in form of statements in an understandable form. It alsoincludes communication to outsiders in form of minutes, management analysis and reports. Theobjective of this study to know the role and importance of financial reporting. The report willreveal about the conceptual and regulatory framework requirement and purpose behind using it.Study will cover value of financial reporting to achieve its goals and objectives. It will give a nunderstanding about the International Accounting Standards (IAS) and International FinancialReporting Standards (IFRS) and the difference between the two. How IFRS is benefitingcompanies across the world in preparation of financial statements.TASK 11. Context and purpose of financial reportingFinancial reporting: It refers to the process of communicating information regardingfinancial statement to its users such as different shareholders, creditors, investors etc. Financialreporting helps the stakeholders to take the useful decision regarding investment (Schalteggerand Burritt, 2017). It presents the financial statements such as income statements, cash flow,balance sheet etc. to the internal and external stakeholders of the company.Purpose of financial reportingReport financial statements: The main purpose of financial reporting is to presentfinancial statements to its stakeholders. Financial statements such as balance sheet, profit andloss account & cash flow statements are present to the internal and external stakeholders of thecompany. They present the financial report in the annual or periodic meeting of the company tohighlights the achievements to the stakeholders.Decision making: Financial report helps the top management to take effective andefficient decision regarding the company. It emphasis the true and exact financial position ofcompany to the management (Beck, Dumay and Frost, 2017). It helps to improve their policiesand strategies to gain competitive advantage and earn higher profit in market.Providing information: The aim of financial reporting is providing financial informationto the various stakeholders such as customer, shareholders, investors, suppliers, creditors etc. It
helps to aware the stakeholders regarding the wealth of the company to encourage them to investin the company.2. Conceptual and regulatory framework and the qualitative characteristics of financialstatementsConceptual framework: It refers to the system which provide a set of rules and standardto the company to perform their task according the standard. It helps to record financialtransaction and to measures its accuracy and performance (Lewandowski, 2016). Conceptualframework are used to set the functions, limit and nature of financial statements.Requirement and purpose of conceptual frameworkConceptual framework are required to set accounting standard for the company.It requires to solve the accounting disputes and problems by defining the standards. Conceptual framework is used to record financial transaction by following all theaccounting standard which help to ensure the accuracy and reliability of the work.Regulatory framework: It refers to the set of rules and regulation which guide that whatshould be recorded in financial report and how to present them in financial statements. It helpsthe company to present their data in final reports.Requirement and purpose of regulatory frameworkIt requires in financial reporting ensuring the information provided by the company to thestakeholders are able to meet their requirements.Regulatory framework present the financial data in accurate manner which helps toincrease the motivation of financial information users.It is required to regulate and monitor the behaviour of company and its directors with theinvestors. It helps them to ensure that company production is in concern with investorsinterest.Qualitative characteristics of financial statementsUnderstandability: It refers that the presented data and information regarding thefinancial position must be understandable to the users. It helps them to improve theirunderstandability and helps to take useful decisions. Understandability refers that the informationare clearly presented and the additional information are also provided in footnote so the user canunderstand the reason behind the results.
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