The Differences Between The Formats, And The Content Of Financial Statements Essay

Globalization has been changing the world. It has interconnected people, nations, and even businesses. Today´s business can share information to investors around the world thanks to the intelligent software of the actual society. Being more specific, the way in which investors and users evaluate businesses performance is through the information contemplated in their financial statements. These financial statements illustrate the current assets, liabilities, and stockholder equity a company has in order to help users take economic decisions. However, not all the companies are regulated to provide the same structuralized information around the world. Each country possesses its own accounting standard that regulates the preparation of financial statements of a company. In that way, companies’ information might differ between countries making the comparability between financial statements difficult to be implemented by users in order to assess the performance of foreign businesses. In view of the need of a globally accepted accounting standard that promotes uniform standards for worldwide financial reporting, the International Accounting Standards Committee (IASC), which then becomes replaced by the International Accounting Standard Board in 2001, was created (Cathey and Schroeder 130). The IASB issues International Financial Reporting Standards (IFRS) that stands as the set of accounting standards that prepare and present the financial

As the responsibilities of the global harmonization of accounting standards IFRS and GAAP transfer to IASB, FASB’s influence is waning. Advantages of the convergence include high quality financial reporting, which lowers cost of capital for investors and the cost of borrowing for companies. However, there are disadvantages to be noted, such as the costs of introducing IFRS to current and potential accountants and the risk of reducing the uniformity of financial reports due to the lax rulings of IFRS, which promotes earnings management amongst companies. Although arguments regarding the convergence remain prevalent, the completion of IFRS and GAAP is inevitable. Come year 2015, accountants, investors, and companies alike will discover whether or not the pros outweighed the cons; or vice versa.

In September 2002 the IASB and the FASB agreed to work together, in consultation with other national and regional bodies, to remove the differences between international standards and US GAAP. (Dorata, 2008) However, the convergence of IFRS and FASB is coming to the end. (Golden, 2013)

This research project will inform the reader of the difference between the United States accounting standards and International accounting standards. The United States uses the Financial Accounting Standards Board (FASB) to issue financial reporting procedures. The International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB). There are proposals for the United States to adopt the International standards. Financial reporting procedures are debated about the United States using the Generally Accepted Accounting Procedures (GAAP) or following the global procedures. This

In this paper I will identify the four basic financial statements, discuss how they are interrelated with each other, and why they are useful to managers, investors, creditors, and employees.

This Income Statement also known as the Earnings Statements or statement of operation, is one of the four Financial Statement used by accountants, business owner’s, and investors. The Income Statement provides a detailed look into how profitable a business has been over a designated period of time.

Total assets at the end of its most recent annual reporting period? Why is this important?

Accountants, business owners, investors, creditors and employees use four basic financial statements of an organization to determine the financial well-being and future earnings potential of that organization. Financial statements are a key tool in seeing and understanding the past, present and future condition of an organization. What are these financial statements and what do they mean to the reader? Do the financial statements mean something completely different to an investor, creditor, and employee?

Financial statements most likely will consist of income statements, balance sheets, statements of retained earnings, and cash flow. Generally accepted accounting principles (GAAP) is the method of choice to maintain these records across domestic and international borders. Since these statements are regularly audited by government agencies or accounting firms to validate accuracy of these statements. Financial analysts utilize data to evaluate the performance and/or make predictions about the future of a business’s stock price. The three main financial statements are the balance sheet, the income statement, and the statement of cash flows.

The balance sheet and Income statement are the most important financial statements of the company that help conduct current analysis of company and evaluate its trends overtime. The balance sheet represents the company snapshots of its financial position on the last days of accounting period. Apple balance sheets, which represent a snapshot of its ending balances in asset, liability and equity account as of the date stated on the report, are changes each year from 2003 to 2014. On the other hand, the income statement shows its financial performance over 2003 to 2014. Apple basically ends its accounting period in September. Most of the long-term debts are in the form of the bonds. According to appleinsider.com, Apple recently issues a new euro bond worth about $2.26 billion with a maturity date on January 17, 2024 and coupon rate of 1.375% payable annually. The first payment will occur on January 17, 2016. Moody’s recently assigned a rating of Aa to Apple Inc. 's senior unsecured note issuance. Thus, Apple recent capital expenditure amount to 11,488 million according to morningstar.com. The analysis of financial statements is conduct to compare Apple with one of its closest rival Hewlett-Packard and twelve ratio were calculated. From table1 and chart1, the current ratio that determine the company ability to meet its short term obligation shows Apple’s current ratio is higher than that of Hewlett-Package from 2003 to 2014. That is, Apple is solvent than Hewlett Packard. Table

Financial statements have several key components and specific criteria into them to relay the detailed information for auditors and management. A deeper look into financial statements and the many concepts surrounding them are needed to explain in more detail. It’s also important to recognize the Auditor’s opinion letter, balance sheet, operating statement, statement of changes in net assets, and statement of cash flows and footnotes of their involvement in the process. Relevant accounting articles are a useful supplement to financial statements and how they enhance concepts in the financial statement. The meaningful uses of financial statements for health care organizations are the epitome of current and future success of financial health.

The accounting world is shaped by stringent and clear rules, principles, standards and guidelines. These are all meant to define accounting operations and reporting discipline. With the emergence of International Accounting Standards (IAS), which was later replaced by International Financial Reporting Standards (IFRS), the accounting concepts, analysis, disclosures, reporting and presentation became easier and practical. Currently, accountants, managers and related parties find it concrete and consistent in protecting professional boundaries.

Financial Statements basically show the historical performance or record of the company at some previous point of time. By the time when financial statements are made public, changes are many economical areas such as market conditions, currency exchange rate and inflations can change the values of assets and liabilities. In this case there often exist discrepancies between book value of assets and their market values.

The Purpose of Financial Statements The financial statements of a business are used to provide information about the status of the business, set performance targets and impose restrictions on the managers of the firm as well as provide an easier method for financial planning. The financial statements consist of the Profit and Loss Account, Balance Sheet and the Cash Flow Statement. There are four areas of information, which we can collect from a company's financial statements. They are: Ÿ

“The Objective of the Conceptual framework project is to improve financial reporting by providing a more complete, clear and update set of concepts” (IFRS.org). Although the current framework has been crucial in to the IASB when developing and revising IFRS’s there have been a few problems. There are areas that are uncovered, limited guidance and out of date areas. In July 2013 the IASB issued a discussion paper which is designed to explore potential changes to the IASB’c conceptual framework and the possibility of a revised framework. “The Conceptual Framework sets out the concepts that underlie the preparation and presentation of financial statements“ (JULY 2013). This discussion document is the first step to a revised