Financial Reporting Of Conceptual Framework

3. How can financial information be relevant to the users of financial reports? (2 Marks)

Quality of reported financial information is a critical element in evaluating financial statement data. The higher the quality of financial reporting, the more useful the information is for business decision making.

As the business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the

Financial reports consist of a statement of financial position, statement of comprehensive income, statement of changes in equity, statement of cash flows, notes, directors' declaration, directors' report and the auditor's report. The financial statements need to be prepared in accordance with applicable accounting standards, making the necessary disclosures in order to be transparent and fully inform readers about the activities and financial situation of the entity.

When organizations present financial statements for review, the information contained in the statements should be appropriate and clear enough as to enable evaluators or auditors of the information to make accurate estimations of the presenting organization’s financial status.

This report is written as a response to the monograph in which the ICAEW published on how financial accounting disclosures can be improved. The aim of this report is to critically discuss and evaluate the worthwhileness of the recommendations made from a financial investor’s perspective. It is done by reviewing recommendations put forward by the ICAEW and analysing if each of the disclosure recommended is worth the effort while putting in perspective what effects these recommendations have on professional investors who are one of the primary users and consumers of financial statements. The report contains information mainly from the ICAEW report and the CFA institute report

In this paper, we analysed the target audience, big and small differences, content, and ways to improve the annual report. The Hershey Company’s Annual Report and 10K have many differences and few similarities, where each document is written to communicate financial statement disclosures to its intended audience.

3.1 How quality is measured in relation to IFRS. The adoption of IFRS and why the change?................................................................................

The purpose of this research report is to understand of two important concepts from the Conceptual Framework for Financial Reporting----the objective of general purpose financial reporting and qualitative characteristics of useful financial information. In this report, Myer Holdings Ltd is as an example to describe these two concepts. This report includes the analysis on whether the disclosure of PPE from Myer Holdings Ltd meets the requirements of AASB 116, especially the requirements of objective

Financial accounting statements can help a user to make future decisions by showing the concerned business’s health. It shows where money is being generated, spent and lost, depicting the financial performance and financial position. The statements can also help in situations such as raising fresh capital in the form of a loan, e.g. a bank will most likely require these statements to show the business’s credibility or worthiness. The statements help influence managerial decisions on which direction the business needs to head, and how to best maximize profit.

Week four covered the concepts that pertain to writing reports for business, within it was the careful planning of the report and managing the information that has been obtained, concluding with how to effectively carry out the action of writing the report out. Within these concepts it was proved that significant emphasis should not just be placed on the way in which business reports the information, but also the purpose, content, and what the information is conveying to the audience it is prepared for. The importance that surrounds these reports is due to the fact that they are utilized as a tool to make business decisions, determine areas of opportunity, and solve problems that can arise (Newman, 2015). Given the various ways in which reports are utilized as one might imagine the information obtained, content, and audience might vary. Yet interestingly, just because certain business reports have to exist due to corporate standards might not necessarily mean that additional reports should not nor that better reporting practice should not be implemented. Unfortunately, a company that might have found this out a bit too late is Wells Fargo. The very well-known banking establishment found itself in

The information reflected in the financial statements actually is expected to be of high quality and useful to support the quality decision-making of market stakeholders due to the far-reaching and very costly consequences. It is important in this context to properly identify and discuss the user needs and thereby we refer to the actual requirements of all information users amongst them the management, which uses the financial information to steer, regulate and co-ordinate the business.

A corporate annual reports discloses information of a company’s performance throughout the preceding year. It is prepared by the directors of a company with the intention to provide shareholders and other interested potential investors with information on the company’s activities and financial performance. It may include the company’s mission statement and overview of what kind of businesses the company is doing currently, as well as forecast of what will be done in the future. Many studies

The Financial Accounting Standards Board has issued for public comment two Exposure Drafts related to its disclosure framework project. The first exposure draft proposes amendments to Statement of Financial Accounting Concepts - Conceptual Framework for Financial Reporting, Chapter 3 – Qualitative Characteristics of Useful Financial Information. The purpose of this proposed amendment is to clarify the concept of “materiality”. FASB defines materiality as, information is material if omitting it or misstating it could influence decisions that users make on the basis of the financial information of a specific reporting entity. In other words, materiality is an entity-specific aspect of relevance based on the nature or magnitude or both of the items to which the information relates in the context of an individual entity’s financial report. Consequently, the Board cannot specify a uniform quantitative threshold for materiality or predetermine what could be material in a particular situation.

With complete notion and awareness of how each country has their set of rules, “the goal of IFRS is to provide a global framework for how public companies prepare and disclose their financial statements” (Rouse, 2011). This view is meant to provide general guidelines, as well as international comparisons through conventional and edifying means. To bring broader and vivid objectives, IFRS replaced IAS, the older standards, in order to bring a more comprehensive and simplified accounting procedures.