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Financial reporting methods - Essay Example

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A shift from the traditional trend of commerce has also been greatly affected by the increasing number of market-based economies. With activities becoming increasingly global, organizations were striving for financial reporting methods that would be globally acceptable.
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Download file to see previous pages Later it joined hands with the FABS and the US GAAP to tackle global accounting issues and to develop uniform accounting standards worldwide.
IASB, at both domestic and international level, consistently has been trying to develop ways of providing investors and stakeholders accounting information that is comparable, transparent and reliable. Financial markets and investors, despite of geographic location, depend on high quality information in order to operate efficiently.
IASB is hence making concerted efforts in this regard and is developing principles that would enable the merger of latest and traditional business conducts and at the same time is consistent with current accounting trends.
The Cash flow statement of Y limited for the year ended 31st September 20XO showed that that was a decrease in total Cash with the Company and the year end balance reflected a cash outflow of 17000. Moreover company's income statement figures have shown that the organizations operational performance has been good for the year and revenues have been on the high side.
Despite the favorable trend in revenue and profit a decrease in the cash can be explained by taking a look at the investing and financing activities for the company during the year. Y limited Cash inflow from operational activities is 737000, which is a good show. But at the same time the cash outflow from investing activities is 855000. This figure reflects that Y limited had adopted a investment policy for the year 20X0 and according to which they planned to expand the scale of operations and hence an investment was undertaken in the purchase of Fixed Asset to achieve the objective.
Moreover the payment of Cash dividend was also on the higher side and the company gave away 600000 as cash dividend resorting to the policy of retaining investors and to enhance the interest of Shareholders in the company.
This policy bore fruit and the company was able to attract investors to the company and it was able to issue Debentures worth 500000.

Task 6
Statement of Goodwill
Particulars
Ordinary Shares 3000000
Add: Share Premium 500000
Retained Earnings 495000
Total Equity 3995000
Less: Total Tangible Assets (3833000)
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