(PDF) International Financial Reporting Standards : Assignment

Financial Reporting

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P 1 Meaning of financial reporting with the various purposes and regulatory and conceptual
framework...................................................................................................................................1
P 2 Purpose of financial reporting meeting the organization objective and goals......................5
LO 2.................................................................................................................................................6
P 3 Interpretation of financial information..................................................................................6
P 4 Evaluation of organization performance with different ratios..............................................6
LO 3 ................................................................................................................................................9
P 5 Benefits of International Accounting Standards (IAS) and International Financial
Reporting Standards (IFRS) .......................................................................................................9
P 6 Models of financial reporting and auditing ........................................................................10
LO 4...............................................................................................................................................11
P 7 Variation and importance of financial reporting.................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Financial reporting refers to disclose the financial data and results related to the company
performance to the different stakeholders such as investors, customers, creditors, employees etc.
in the company. Financial reporting provides the various monetary and non-monetary
information to the organization to evaluate the financial result and help the different stakeholders
to make effective decision regarding the investment and improving productivity and profitability
of the company. It helps the company to get the results of the company in particular time period.
The report highlights the various purpose of financial reporting ion the organization and different
regulatory and conceptual framework to present the data and information in prescribed formate.
The report explains the use of different financial statements such as balance sheet, profit and loss
account, trading account and cash flow to evaluate the performance of the company.
It provides the importance of ratios in the organization to evaluate performance with the
other companies. The ratio analyse help the company to find the performance and productivity of
the company by comparing the results to different year results. The report also highlights the
benefits of IAS ans IFRS in the company and importance of financial reporting across the
different countries. The accounting standard provide general guidelines to the company to
present the data ion more precise form to improve the understandability of the data.
LO 1
P 1 Meaning of financial reporting with the various purposes and regulatory and conceptual
framework
Meaning : Financial reporting refers to present and disclose all the data related to finance
of the company in more precise format under the guidance of accounting concept and principle
to the different users who have interest in financial information (Mazur, and Pisarski, 2015). It
includes the various statements such as balance sheet, profit and loss account, income statements,
cash flow etc. to present the data and evaluate them to get the effective and efficient financial
result.
Purpose of financial reporting
Providing information : The aim of preparing financial report in the organization to
provide the different kinds of information to the different users and stakeholders so they can get
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the benefits from the information. The various financial report provide t eh different information.
For example cash flow statements help the company to evaluate the total inflow and outflow of
cash in particular accounting period to meet the requirement of the company and balance sheet
statement are prepared to provide the information related to the financial position such as total
debtor and creditor, assets, liability etc. to help the investor to take the investment decision. The
presentation of financial information is also required by the firm to attract the customer and pool
the investor toward the company outputs.
Evaluating data : Financial reports provide the information to the company to evaluate
the performance to take effective decisions. The comparison of financial report to the different
accounting year and to compare the performance of one company to the other company. It helps
them to find position in the market in compare to other company in same industry and
understood the trend in the market to improve the performance and productivity of the company.
Decision making : Financial report provides the relevant data to the different
stakeholders such as investor, customer, creditors, employees, manager and owner to get the
result of the company and take the decision of investment, purchase and lend money to the
organization (Cardwell,, Williams, and Pyle,, 2017). It increases the productivity of company
with the profitability. The financial information such as revenue, profit and expenses of the
accounting period help the investor to make the decision regarding whether to invest in the
company or not. A sound financial growth pool the investor towards the company.
Conceptual framework and regulatory framework
Regulatory framework : The regulatory framework provides the set of rules and
regulation for treatment of accounting data and values. The framework provides various standard
to measure the performance and provide a fixed set of standard for the valuation of company data
to take the important decisions.
The purpose of regulatory framework is help the company in preparation of financial
statement because they are used by the different users. It strengthens the accountability and
creditability of the organization by using different accounting standard such as IFRS, IAS etc.
Conceptual framework : It is used by the organization to describe the nature and
objective of financial statement and accounting and set the limit of accounting to present the
information accurately and correctly (What is Conceptual Framework?, 2019). It explains the
fundamental principles and interrelated objectives.
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