International Financial Reporting Sample Assignment
Added on 2021-01-03
18 Pages4380 Words52 Views
International Financial Reporting
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY..................................................................................................................................11. Purpose and context of financial reporting..............................................................................12. Regulatory and conceptual framework its importance, purpose, key principle and explainingqualitative characteristic..............................................................................................................23. Stakeholder of Sainsbury and how they benefit from financial information...........................34. Examining value of financial reporting for meeting organisational objective and growth.....55. Presenting main financial statement as per IAS 1...................................................................6Statement of profits and other comprehensive income............................................................6Statement of change in equity..................................................................................................6Statement of financial position................................................................................................7Comparison of statement of cash flow and financial statement..............................................76. Interpretation of financial statement of Sainsbury...................................................................77. Difference between International Accounting Standards (IAS) and International FinancialReporting Standards (IFRS)........................................................................................................78. Evaluating benefits of IFRS.....................................................................................................79. Identifying degree of compliance with IFRS by companies around the world.......................8REFERENCES................................................................................................................................9
INTRODUCTIONIn way of providing global standard in collecting and recording data for communicating itto other stakeholder International Accounting Standard Board (IASB) has provided standards(Biddle, Hong and Knowles, 2016). Thus all companies around the world need to follow thesestandard so that they could provide understandable and comparable books of accounts across theinternational boundaries. The main purpose of financial accounting and its reporting is todescribe the financial performance and position of company in market. This particular report will be based on financial reporting which includes the importance,purpose, key principle and characteristic within the context of regulatory framework as well.Further the report will cover stakeholder of Sainsbury which is the second largest supermarket ofUK operating since 1869. Then the value of financial reporting for meeting organisationalobjectives and growth will also examined. In addition to this main financial statement as per IAS1 like that of statement of P&L, comprehensive income, statement of equity, financial positionand difference between cash flow and the above financial statement will also be described. MAIN BODY1. Purpose and context of financial reportingFinancial reporting will be termed to as that process which includes producing up ofstatement which would disclose financial position, performance and status of company tomanagement and investors (Nobes, 2014). There are many type of information which is usedwithin the financial statement like balance sheet, statement of cash flow, comprehensive income,income statement, stockholder equity and P&L account as well. The main purpose or objectiveof this reporting will be of providing information related to financial position, changes inposition and performance of company that would be then used for wider range of economicdecision taking. All these type of information will allow stakeholder of company for allocation ofresources like that of accumulated profits in use of installation of any sort of machinery (Appiah,Mireku and Ahiagbah, 2016). As there is different type of reports which are included within thefinancial reports and all of them will be having their own purpose or aim.Cash flow- This will be showing number of cash receipt and disbursement with different type ofcategory by including the amount of cash to be retained by company on their hand. So this willinclude net change in cash and level of expense to be carried on for firm including both1
payments and receipt as well. All these cash will result in operation, financing and investingactivities of firm over the time period.Income statement- This type of statement will be producing information related to total amountwhich company is generating income from all its activities. This will also be having ordescribing the expenses, income and volume of sales over the period of time (Graham,Skaradzinski and Rustambekov, 2017). Income statement will also be describing how manynumber of time, company will be need to review their expense and income. In analysing thetrend of market and that of industry also income statement will be required so that operation offirm could be measured as per trend.Balance sheet- The purpose of this balance sheet is to find out liquidity, debt and funding ofcompany with calculating different types of liquidity ratio. This is the most important type ofstatement of accounts which will be describing the basis of number of ratios to be calculate. 2. Regulatory and conceptual framework its importance, purpose, key principle and explainingqualitative characteristicThe conceptual framework will be defining the nature or purpose of accounting or bookkeeping which is considered to as issue for reporting of financial information. This is mostlyapplied for financial reporting purpose so included with Generally Accepted AccountingPrinciple (GAAP). Company could be able to take other financing decision based on conceptualand regulatory framework with development of measurement (International AccountingStandards Board, 2010). Thus conceptual framework will be related to accounting theory so thatit could be prepared by standard setting for all type of practical problem to be tested. There areoften many types of threats and defects are identified during time when company is not able tofollow the conceptual framework or the accounting standards as well.During the time when there is any type of failure or collapse of company then it isregarded that during that time accountant of company will be at fault due to their inadequateknowledge. Like in case of TESCO when accountant of firm overstated its profits by £263million and then the revenue by Financial Conduct Authority (FCA) were spotted to be half of it.This was considered to as not following the conceptual and regulatory framework which must bedone by company. It was also included that due to companies not following the conceptual framework therewas multiplication of rule based accounting system. While it was also noticed that if there will be2
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Financial Reporting: Context, Purpose, Stakeholders, IAS vs IFRS, and Value for Organizational Growthlg...
|21
|4370
|303
The Context & Purpose of Financial Reportinglg...
|21
|4358
|366
Report on Conceptual and Regulatory Framework of Financial Reportinglg...
|18
|4548
|201
Corporate Financial Statements: Uses and Limitations of Income Statement, Statement of Financial Position, and Cash Flow Statementlg...
|12
|3293
|446
International Financial Reporting Purposelg...
|18
|4242
|215
Financial Reporting Answers Assignmentlg...
|16
|4490
|68