International Financial Report Assignment
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Added on 2020-06-06
International Financial Report Assignment
Added on 2020-06-06
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InternationalFinancial Report
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Q1 Prepare Income statement of Able Plc for the year 2017 and explain InternationalFinancial Reporting Standards....................................................................................................1Q2. Evaluating accounting for intangible assets as per the International Accounting Standards.....................................................................................................................................................3Conclusion:.................................................................................................................................6Q3 Inventories should be valued at “Lower of cost and net realisable value”? Explain?..........6Conclusion: ................................................................................................................................8CONCLUSION...........................................................................................................................8REFERENCES..............................................................................................................................10REFERENCES..............................................................................................................................12
INTRODUCTIONInternational Financial reporting is usually known as IFRS and these standards are issuedby IFRS foundation and IASB which is International accounting standards board. It makes easyfor company and organizations by giving common language which is globally understood forbusiness affairs. The main motive of IFRS is that company accounts are being understandableand comparable across the international and national boundaries. The present report is all aboutIFRS and its application. The income statement on the basis of IFRS standard has been drawnwith some specific adjustments. In the next part there is critical understanding of internationalaccounting standards as per the module APC311. Accounting for intangible assets on the specificarea of capitalizing development and research costs has been explained in this report with theproper application based example. Further, reports also depicts current key issues present ininternational financial reporting and the conceptual framework for accounting. As per the IAS 2inventories should be valued at lower cost and net realisable value has been justified in this.Q1 Prepare Income statement of Able Plc for the year 2017 and explain International FinancialReporting StandardsInternational Financial Reporting standards can be referred as a set of accountingstandards which are developed by not for profit and independent organisations. The mainobjective of IFRS is to give a basic global framework that how organisations should preparefinancial statements and disclose them. It gives guidance or directions about preparing financialstatements instead of setting rules for specific industry reporting. International standards playsvital role in big companies, multinational companies who have their subsidiaries in differentcountries. If single set of worldwide standards will be adopted then it will simplify theprocedures of accounting by giving permission to a company for using throughout one reportinglanguage. And this single standard will give cohesive views of funds to investors and auditors.The financial performance of an organization is been represented as statement of comprehensiveincome whose sub parts can be statement of profit and loss and statement of comprehensiveincome. It includes the elements as per IFRS standard such as revenue and expenses. While theaccounting period where inflows and enhancements of assets raise the economic benefit. Equityis been raised if liabilities are decreased. Contributions made by equity are not included inrevenues such as partners, shareholders and owners. In the accounting period in the outflow s orthe depletions of assets decreases the economic benefit and more liabilities gives the result of1
equity decrement. Distributions are not been included in the equity participants. Somecircumstances related to comprehensive income can be: Number of assets and liabilities areremeasured. The financial asset's fair value may increase or decrease which can be modified asavailable for sale. Revaluation of intangible assets, property, plant may increase or decrease.There is the requirement of faithful and fair representations for the effects of transactionsand all other events and the conditions which are according with recognised criteria forliabilities, assets, income and expenses which are set in the framework. IFRS has generallyforbidden offsetting. As the standards require offsetting whenever some specific conditions aresatisfied. It requires the entity for comparative information in context of preceding year for allamount which is mentioned in current year's financial statements. This comparative informationalso provides descriptive and narrative information which is related to financial statements ofcurrent year. The additional statement of financial position which is also known as balance sheetof International accounting standard 1 when any organisation applies for accounting policy or ifit again classifies item of the financial statements. If the important changes in the nature oforganisation's operations or the preview of financial statements, that classifies moreappropriately with regard for choosing and selecting application of accounting policies.Income statement of the year ending 31 December 2017ParticularsDetailsAmount (in £)Sales 205000Sales return-10000Revenue195000Cost of salesBeginning Inventory20000Purchases 130000Purchase return-1000Adjusted purchase129000Goods available for sale150000Closing inventory-26000Cost of sales124000Gross Margin397000Operating ExpensesCarriage inwards1000Motor Expenses 6000Warehouse salaries 25000less outstanding salaries-1000Salaries24000Hire of vehicles2000Director salary100002
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