Unit 13: Financial Reporting Assignment
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Added on 2021-03-25
Unit 13: Financial Reporting Assignment
Added on 2021-03-25
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StudentName/IDNumberTruong Yen PhiUnitNumberandTitleUnit 13: Financial ReportingAcademicYearSemester 2, Academic year 2019 - 2020UnitAssessorMs. Kim Oanh Vu and Ms. Bich Ngan NguyenAssignmentNumberandTitleFR1: International Financial Reporting (1 of 3)IssueDate05th February, 2020SubmissionDateTo be announced by officeIVNameMs.Doti Chee (Lead IV) and Ms. Bich Ngan Nguyen (IV)IV Date2nd January 20201. Outline the context and purpose of financial reporting.
In the world of business, financial reporting serves as a crucial tool in providing informationabout the financial and business condition of an enterprise since its examinations andinterpretations are the key to assess the quality of a company from which to make businesschoices. For that, financial reports are represented as the scorecards of enterprises in reportingtheir financial status, namely: balance sheet, income statement, cash flow statements, etc. Thus,the outputs of financial reporting can be carried out in forms of reports, snapshots and books.(Cengage Learning, 2019)There are three main purposes of financial reports which mainly resolve around financialperformance, financial position and financial management of a firm in a given period of time:Financial performance: Based on financial statements, a firm can measure if the businessmeets the outcome requirements of owners, shareholders and State agencies.Financial position: After reviewing their financial performance, they can also identifytheir current business status in comparison of other competitors in the industry.Financial management: Lastly, a firm may also see the results of the management'sstewardship of business resources. (Zeff, 2012)Above all, accounting standards must be implemented in the process of conducting financialstatements so that financial information will be distributed with honesty, transparently andaccuracy, especially in defining contractual entitlements. However, mandatory standards can beflexibly applied in each enterprise to avoid unwanted business outcomes. (Elliott, B. & Elliott, J.,2011) 2. Examine the regulatory frameworks and governance of financial reporting.The table below describes some basic accounting standards of financial reporting:DefinitionFormationContentInternationalAccountingStandard(IAS)The first international accounting standards established by the International Accounting Standards Formed in 1973, then later developed by IASB (International accounting standards board) to become a IAS consists of 41 different ordinances whichcover a variety of basic accounting regulations on:Business combinations
Board (IASB) (Kenton, 2020)uniformed international standard, named IFRS. (Kenton,2020)Present valueReporting financial performanceInsuranceExtractive industriesFinancial instruments. (Kenton, 2020)InternationalFinancialReportingStandard (IFRS)Standards created by the IFRS Foundationand the International Accounting StandardsBoard (IASB). (Palmer, 2020)In 2001, IFRS was formed being the replacement of IAS (International Accounting Standard).(Palmer, 2020)IFRS provides a common global language for business affairs with 17 different ordinances whichcover:Accrual basis of accountingMateriality & aggregationOffsettingFrequency of reportingComparative informationConsistency of presentation. (Palmer, 2020)GenerallyAcceptedAccountingPrinciples(GAAP) A common set of accounting principles, standards, and procedures made by the Financial Accounting Standards Board (FASB) (Tuovila, 2020)In response of the Stock Market Crash of1929 in the United States and the subsequent Great Depression, GAAP was primarily formed. (Ross, 2020)GAAP governs the accounting world with 10 general rules and guidelines which cover:Revenue recognition;Balance sheet classification;Materiality. (Tuovila, 2020)
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