International Financial Reporting

International Financial
Reporting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1.Context of financial reporting including regulatory framework and its governance:............4
P2.Purpose of financial reporting for meeting organisational objectives, development and
growth..........................................................................................................................................5
TASK 2 ...........................................................................................................................................6
P3.Preparation of financial statements of GODWIN Plc:...........................................................6
P4. Calculation of various ratios and its interpretation: ..............................................................8
TASK 3..........................................................................................................................................11
P5.Benefits of IAS and IFRS:....................................................................................................11
P6.Models of financial reporting and auditing: ........................................................................13
TASK 4..........................................................................................................................................14
P7.Difference and importance of financial reporting across different countries: .....................14
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
In any business environment, financial reporting of its business operations are essential
for providing true and fair view of affairs of company to its shareholders and other stakeholders.
For any multinational business organisation, international financial reporting shall be required
for follow the different countries laws and regulations. International financial reporting
frameworks set common rules for preparation of financial statements which are consistent and
transparent around the world.
For better understanding of international financial reporting, a business firm named
Deloitte is chosen which is engaged in providing professional consultancy services. It specializes
in audit and assurance, tax, advisory and risk. This report explains about the context and
purposes of financial accounting reporting for meeting business related growth and objectives. It
provides interpretation of financial statements by calculating various ratios. This report
prescribes the benefits of international accounting standards (IAS) and IFRS and various models
financial reporting and auditing. It also provides the differences and importance of financial
reporting across different countries.
TASK 1
P1.Context of financial reporting including regulatory framework and its governance:
Financial reporting concerns with the annual disclosure requirements of financial
statements which includes income & expenditure statement, balance sheet and cash flows to the
management and concerned stakeholders. It is a regulatory norm to disclose critical financial
data by the organisation to the general public in order to ensure transparency, diligence and
accountability. It is integral to corporate governance. The stakeholders who are deeply concerned
with an organisation's financial health are investors, creditors, regulators, financial institutions,
government and society at large. Deloitte Ensues financial reporting as vital to its operations and
to satisfy the needs to disclose critical information to the public it annually meets its disclosure
requirements (Nobes, 2014).
Regulatory framework:
Company law 2006 recognises International financial reporting standards (IFRS) UK and
Generally accepted accounting practices (GAAP) as standard principles to record financial
statements and follow guidelines issued by these standards for disclosure requirements . FRS 100

includes in its purview IFRS, FRS 101,102,105 which are to be strictly followed by every
publicly listed company. These standards are bifurcated according to the characteristics of the
entity concerned. They are comprehensively adopted by European union as central standards to
meet the disclosure requirements. Deloitte Being a publicly listed company adheres to IFRS for
its internal reporting and for its sister concerns. As the complexity of functions increase along
with the threshold limit, results into increase in the more complex disclosure requirements.
Deloitte discloses annual financial statements based on the parameters set by the aforesaid
standards and strictly abide by the laws prescribed. Financial reporting council is the supreme
authority in UK to promote reporting and governance standards. It is responsible for perpetual
alteration in the norms, laws and procedures to ensure greater reliability (Madawaki, 2012).
Governance of Financial reporting:
Financial reporting is a pursuit of strong corporate governance practices which an
organisation must abide to. Corporate governance is a framework of crafted rules, regulations,
managerial practices and regulatory standards through which an organisation runs. It ensures
parallel development of business goals with ensuing ethical practices for utmost care of
stakeholder interests. Financial reporting in modern context is not limited to mere a low priority
accounting exercise, but a central function of good corporate governance practice. Information
flow is certainly very crucial in the formation of a broad network of information economics
which paves a significant way of delineating information to major factors affecting with the data
set. Linkage between good governance and financial reporting empowers the brand value of a
business firm. The provisions of companies act stretches a border line for a company's business
scope. It further adds greater reliance on the firm to prove its sanctity based on the premise of
just and fair principles of good corporate governance backed by true and fair financial reporting
practices.
International financial reporting standards (IFRS):
 IFRS 1: First time adoption of international financial reporting standards and It requires
a firm that is adopting IFRS standards for the very first time to prepare a comprehensive
set of financial statements to covering its beginning IFRS reporting period and the
previous year.
 IFRS10: It makes principles for preparing and presenting consolidated financial
statements for the entity which controls various other subsidiaries or sister concerns.