Introduction To Financial Reporting

Added on - Dec 2020

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FINANCIAL REPORTING
TABLE OF CONTENTSTABLE OF CONTENTS..............................................................................................................2INTRODUCTION...........................................................................................................................11. Purpose and context of financial reporting..............................................................................12. Regulatory and conceptual framework with its qualitative characteristics.............................23. Determining stakeholders of organization with its advantages through financial information......................................................................................................................................................34. Examining importance of financial reporting for accomplishing organizational growth andobjectives.....................................................................................................................................55. Presenting financial statements according to IAS 1................................................................5(d) explaining the information that cash flow and balance sheet is providing............................76. Explaining and interpreting financial performance.................................................................77. Explaining differences among International financial Reporting standards and InternationalAccounting Standards................................................................................................................108. Evaluating advantages of IFRS.............................................................................................119. Determining degrees of compliance with IFRS across world along with factors which givesdirect impact to compliance.......................................................................................................12CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................14
INTRODUCTIONFinancial reporting is considered as process of framing statements which directlydiscloses about financial status to investors, government and management about business entity.The present report will discuss about context and purpose of financial reporting along withconceptual and regulatory framework along with qualitative characteristics. There will bedetermination of main stakeholders of business organization with importance of financialreporting to growth and organizational objectives. In the similar aspect, it will articulatestatements of profit and loss, changes in equity and financial statements. There will beinterpretation and calculation of financial ratios along with benefits to International financialreporting standards.1. Purpose and context of financial reportingFinancial reporting engages appropriate disclosure of financial information to public andmanagement where business entity id directly performing over specific duration. In the similaraspect, financial reporting is directly issued on yearly or quarterly aspect as it is not similar tomanagement reporting where disclosure of financial information inside the business entity forcreating decisions with reference to business entity. The financial reports are directly consideredin annual report of public company. The financial reporting has served for two initial objective asit helps management for involving in effective decision making which directly concerns withobjective of company along with overall strategies. The disclosure of data in reports helpsmanagement to directly discern with weaknesses and strengths of business entity with its overallfinancial health. In the same series, it gives vital information on basis of financial activities andhealth of organization to its stakeholders as it comprises shareholders, consumers, governmentregulators and potential investors (Stubbs and Higgins, 2018).It is considered as mean for ensuring that company is operating in appropriate aspect. Theabsence of reporting system the investors must be less inclined to contribute with its capital andno method for monitoring that how effective company performs with directors, the appointedsteward of business are directly supposed to operate with the best interests and stakeholders aswell. The requirements of accomplishing users of financial statements the organization has todirectly implement accounting systems for giving required information. Furthermore, it is veryimportant that regulations of systems helps for ensuring about provided information to users in
proper format which is highly useful about required information. As, it could be attained viaframework of financial reporting on basis of conceptual framework.2. Regulatory and conceptual framework with its qualitative characteristicsThe conceptual framework of financial reporting has been directly underpinned forpurpose of preparation of financial statements. It represented main concepts, ideas and principleson basis of international financial reporting standards and financial statements as well. Itconsiders full discussion about its qualitative characteristics, objectives, accrual and goingconcern concepts. In the similar aspect, it will be defining, measuring and recognising elementswith construction of financial statements and concepts of capital along with capital maintenance.The regulatory framework for purpose of preparing financial statements which is mandatory fornumerous reasons as it ensures about needs of financial statements users for accomplishing withthe least information. It will ensure about given information in relevant economic arena which isconsistent and comparable. With context of given growth, the global investments andmultinational organizations are raising as behaviours of companies will regulate along withdirectors towards investors. Further, elements of regulatory environment of accounting hasnumerous elements as typical regulatory structure considers National financial reportingstandards, Market regulations, National law and Security exchange rules. The qualitativecharacteristics of financial information are stated below:
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