International Financial Reporting Assignment - Able Plc
Added on -2020-07-22
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INTERNATIONAL FINANCIALREPORTING
Table of ContentsINTRODUCTION...........................................................................................................................1Q.1 Income statement of Able Plc for the year 2017..................................................................1Q.2 International accounting standards (IAS) related to financial reporting..............................3Q.3 IAS 2 inventory valuation and critical analysis of statement...............................................7CONCLUSION................................................................................................................................9REFERENCES .............................................................................................................................10
INTRODUCTIONFinancial reporting basically associated with disclosing financial information and data tostakeholders and the financial performance of organisation. Financial reporting is a method todefine the policies and standards which remain related to financial reporting and analysis.Organisations have to follow rules and regulations subject to presenting financial informationand data. There is a financial representation done in respect of presenting financial reporting andinformation related to managers, stakeholders, public, government, banks and financialinstitutions (Loughran and McDonald, 2016). International standards related to accounting forintangible assets are defined in this report. International financial standards are defined withcritical analysis and reporting. IAS 2 which is related to inventory management and valuation.Q.1 Income statement of Able Plc for the year 2017IAS 1 contains the rules and policies related to presenting financial statements. There aresome guidelines are made in order to determine the structure and frame the financial informationof organisation in well organised manner. This standard required all the essential aspects in termsof making financial accounts on annual basis. Complete primed subject to financial statementsare comprised as follows: Presenting the financial statement at the end of the period and year.Profit and loss account and other comprehensive income for the period. Comprehensiveincome contains the elements which remain associated with income and expenses whichare not recognised in profit or loss as per IFRS rules and standards (Lamberton andLapeyre, 2011).IAS allows organisation to present a consolidated statement of profit and loss and othercomprehensive income in separate two statements. There are some essential aspects considered in respect of determining the change inequity. A statement of change in equity for the period is formed which helps todetermine change in equity.This also assist managers and accountants to prepare cash flow statement whichcontains the all the relevant details related to cash inflows and outflows for the particularduration.Notes to accounts are also presented in respect of comprising of significant financial andaccounting policies and other explanatory information1
A statement which contains the details related to predicting comprehensive informationand accounting reports to functions and management are presented in this context(Kumar, 2012).A financial statement is presented by the organisation to present the financial positionand capital structure of the organisation. This is one of the essential aspect which isconsidered important for defining the financial position in systematic format. Thisstatement contains the details related to all current, non current assets, current and noncurrent liabilities. There is an income statement presented below of Able plc. Income statement of Able Plc for the year ended 31st December 2017.ParticularsAmountSales205000Return inwards-10000195000Less: cost of goods sold124000-124000Gross profit71000ExpensesMotor expenses6000Warehouse Salaries26000Hire of values 2000Directors salary10000Finance costs3000Rent and rates2000Insurance paid1000Bed debts2000Depreciationon fixtures 2000on motor vans1000Loss of closing branch20000-75000Net profit/Loss-4000Working notes:1. Cost of goods sold is calculated as below;COGS = (Purchase + Opening stock + direct expenses – return outwards – Closing stock)= (130000-1000+1000+20000-26000)= 1240002. Adjustment of outstanding salaryOutstanding salary = Salary paid during the year + salary to be paid during the year oroutstanding salary2
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