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International Financial Reporting Assignment (Doc)

   

Added on  2020-10-05

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InternationalFinancial Reporting
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Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................11. Financial reporting and its purpose.........................................................................................12. Regulatory and conceptual framework and their requirement, purpose and key principles...23. Key stakeholders of the company and benefits of financial information to them..................34. Value of financial reporting in meeting goals and objectives of the company.......................45. Formulation of financial statements of the organisation.........................................................56. The way in which financial statements are used to communicate and interpret financialperformance.................................................................................................................................77. Differences between IFRS and IAS........................................................................................98. Various benefits of IFRS.........................................................................................................99. Varying degree of compliance with IFRS.............................................................................10CONCLUSION..............................................................................................................................10REREFRENCES............................................................................................................................11APPENDIX....................................................................................................................................12
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INTRODUCTIONFinancial reporting can be defined as the method that help to record all the financialinformation in different types of statements so that organisation's performance can be examined.For all the organisations it is very important to formulate final accounts like income statement,balance sheet and cash flow statement for the purpose of analysing financial strength of acompany. In this project report an accountant of a leading accountancy firm is going to conductfinancial reporting for Marks and Spencer which is a multinational retailer in Britain. Thisassignment is providing different types of services such as banking (Adetula and Owolabi,2014). This assignment contain detailed information about financial reporting its purpose,conceptual and regulatory frameworks and their requirements, principles and purpose, benefits offinancial information to the key stakeholders, role of financial reporting in meetingorganisational goals and objectives, generation of financial statement so that organisation'sfinancial performance can be communicated and interpreted etc. Benefits of IFRS and itsdifferentiation with IAS and varying degree of compliance with IFRS have also been discussedunder this report.MAIN BODY1. Financial reporting and its purposeFinancial reporting: It is the way in which organisations formulate their financialstatements that are presented in front of external stakeholders for the purpose of providing theminformation of organisational performance. In Marks and Spencer it is conducted by theaccountants so that competitiveness of the organisation can be examined. All the finance relatedinformation is provided to the external parties to enhance their interest in the company. If themanagers of the company are catering transparent data to the stakeholders than it can help toattain organisational goals. Marks and Spencer is successfully running its business all around theworld hence it is very important for the company to formulate financial statements in appropriatemanner so that business can be operates more effectively (Beneish, Miller and Yohn, 2012).There are three different types of financial statements are formulated by the accountantsof Marks and Spencer these statements are cash flow, balance sheet and income statement. All ofthem help the internal as well as external stakeholders to analyse organisation's financial health1
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so that they may take appropriate decisions. All the companies conduct financial reporting forvarious purposes, some of them have been discussed underneath:Purpose of financial reporting:Financial reporting is concerned with the appropriate formulation of financial statementsso that a transparent and positive image of the organisation can be presented in front ofinternal as well as external stakeholders.It is conducted to render result of organisation's operations and different executionalactivities that are performed by the company in order to maximise sales and profits forthe future (Dhaliwal and et.al., 2012).2. Regulatory and conceptual framework and their requirement, purpose and key principlesRegulatory and conceptual framework: Government of every nation implementvarious rules, principles and regulations that are related to the effective formulation of financialstatements for all the organisation. This done for the purpose of executing business successfully.All the imposed regulations are the frameworks that are essential for all the organisations tofollow as they are required for the effective representation of organisational position.Marks andSpencer is implementing all the regulatory and conceptual frameworks that are imposed by legalauthorities because it is beneficial for the company and also help to establish a positive image inthe mind of stakeholders. IASB is the regulatory authority who incorporates different types offinancial reporting standards so that all the business entities can record all the information infinal accounts properly (dos Santos, Fávero and Distadio, 2016). Marks and Spencer is using allthe standards in its financial reports as they are required for all the companies who are operatingbusiness on international level. IFRS are the set of standards that are imposed by IASB, that aredescribed below:IFRS (international Financial Reporting Standards): These are introduced by IASB(International Accounting Standards Board) that guides the organisations to formulate financialstatements in appropriate manner. Some of the main IFRS are as follows:IFRS 1: It is induced for the organisations who are going to adopt IFRS for the first time.It guides them through out the way of recording so that financial statements can beformulated properly.IFRS 10: All the organisations with various subsidiaries are directed to formulate alltheir financial statements in consolidated form. According to IFRS 10 the parent2
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