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International Financial Reporting

   

Added on  2021-02-21

15 Pages3926 Words324 Views
International FinancialReporting

Table of ContentsINTRODUCTION...........................................................................................................................2TASK 1............................................................................................................................................21. Context and purpose of financial reporting........................................................................22. Conceptual, regulatory framework, key principle and qualitative characteristics.............33. Main Stakeholder and benefit to financial information......................................................44. Value of financial reporting to meet objective and growth................................................65. Main Financial Statements:................................................................................................76. Interpretation and communication of financial performance.............................................97. Differences between IAS and IFRS.................................................................................108. Advantages of International financial reporting system...................................................119. Degree of compliance with IFRS:....................................................................................12CONCLUSION..............................................................................................................................12REFERENCE.................................................................................................................................141

INTRODUCTIONGlobally, different kind and sort of business corporates reports its consolidated andmerged accounts to shareholders. While preparing consolidated annual accounts various kind ofmethods, assumptions, policies etc. are used by accounting officials. Making uniform accounts oforganizations throughout the globe internation financial reporting play a crucial role. It includesconman set of standard, effective policies and reliable guidelines for formulation andconsolidation of accounts of subsidiaries, holding and different venture. IFRS, Ind AS and IAS,are major example of international financial reporting standards (Adams, 2017). Effectiveadoption of these global standards creates similarities in accounting practices and leads toenhancement in creditability of business entity' books of accounts. The study report discussabout the motive of financial reporting, its frameworks used to enhance reliability of data andexplanation to what extent financial information is beneficial for stakeholders. Study alsoevaluates role of financial reporting in achieving business and trade goals, differentiation in IASsand IFRSs and numerical sum of preparation of annual accounts. TASK 11. Context and purpose of financial reportingFinancial reporting relates to transforming raw information into relevant information andreport and present information for managerial use or for stakeholders. It is essential annual taskfor corporates as compliance of its is required by different statutes across world. It begins withrecognising, recording and classifying fiscal events, and ends with communicating in formal waythis information to various interested parties and shareholders. Financial reporting informationare used by a large so relevance, creditability, reliability is essentially required. It acts ascomplete and full assessment of entity's performance and result (Stubbs and et.al., 2014).Management play crucial duty in adoption and accomplishment of financial reporting process.However accountants prepares final accounts. Different stakeholders apply information reportedin financial accounting for different context so it is notable for accountant personnels andmanagers to maintain the relevance of accounts while considering various stakeholders.Following points explains about key purposes related to financial reporting, as follows: Under process of Financial reporting, management's primary goal or aim relates todeveloping efficient strategies as well as in decision-making. 2

It facilities enhancement in accuracy, quality and reliability of information reportedthough annual final accounts It assisting stakeholders understand the each financial aspect of company for efficientinvestment decisions. It supports corporate organisation to motivate new interested investors and companies tomake investments in company (Botzem, 2012). It provides information for suppliers to decide credit terms to be given by them tocorporate.It facilitates auditors to make fair and true comment on company's results and particularperiod's performance. It determines liquidity, operational efficiency, solvency and profitability to provide alertto company and concerned parties.It provides a basis for making strategies and formulate strategies for effectivelyoperating. 2. Conceptual, regulatory framework, key principle and qualitative characteristicsFramework of financial reporting relates to fundamental structure which supportsdifferent kind of financial accounting tasks within company. It is applied by all business entitiesto provide smoothness in process of financial reporting. It is essential to cover different aspectsof organisation. Financial accounting's framework covers all qualitative, fiscal and quantitativeaspects to provide effectiveness in overall accounting's processes (Cavusgil and et.al., 2014).Such Framework of financial reporting is determined by relevant statuaries in different countries.International accounting standard board is internationally bears the duty of tracking complianceand for making improvement in financial reporting 's framework. It contains basic ideas to beapplied by accountants to face accounting complexities and issues. It is majorly classified asregulatory and conceptual framework. Conceptual and Regulatory framework: A conceptual framework of financial reporting emphasises on building a logical structureof accounting whereas regulatory framework is part of compliances of rules and guidelinesimposed by governing authorities. Both frameworks supports an effective reporting andacceptable by stakeholders across the globe. Conceptual framework is not compulsory forbusiness organisations but application of this framework makes financial statements more3

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