Finacial Reporting

Coursework requirement

Select one company from the above and prepare a report of no more than 1,500 words illustrating clearly how the company produces financial information that meets both the qualitative characteristics of Relevance and Faithful Representation. Enhance your report with examples from both the financial statement(s) of the chosen company and the IASB conceptual framework project.

Introduction

Financial reporting

When we think about financial reporting we think about the important information that creditor, investors, managers, owners, the government, employees or other internal or external arties might need to help them to make an important decision’s.

For example creditors want to know whether the firms can repay a loan plus any added interest in accordance with specified terms. Investors want to are interested mainly in returns they can receive from dividends and increases in market values. Owners, managers, employees and directors might want to find out information to see the company performance or help make a decision to improve the company. While other public company e.g. government might be interested in making decision to tax the firm.

Therefore is important that a firm should provide this information. Firms have be allocated a standard framework set by generally accepted accounting principle (GAAP) that they should provide a financial statement to communicate with external users. The main types of financial statements firms should provide are Income Statement, statement of Financial Income, statement of cash flow and statement of Changes in Equity. These statements are normally audited by outside certified public accountant (CPA) or auditors.

Qualitative Characteristics

The qualitative characteristics is define by (Deegan and Ward, 2013) as a useful framework use for economic decision making in terms of making resources available to a reporting entity. That mean in another word as an identify information that will be...