StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

FINANCIAL ACCOUNTING 3 - Essay Example

Cite this document
Summary
The paper examines the reasons and causes of the increasing size of the annual reports and their implications on the users of the financial statements as to whether they have proven to be useful with regards to better understanding and communication or have caused complications…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER91.8% of users find it useful
FINANCIAL ACCOUNTING 3
Read Text Preview

Extract of sample "FINANCIAL ACCOUNTING 3"

Download file to see previous pages

Due to the intervention of numerous regulatory bodies and the outbreak of various accounting standards which guide the management in their financial reporting and disclosure requirements, the length of the financial statements has drastically increased. The accounting policies, treatments and disclosures are being formulated in order to meet the requirements of modern accounting and to provide the shareholder and other users a better understanding. (Li, 2005) It has been observed that the public companies, as compared to private companies, extend the size of the annual reports beyond the regulatory and other standard requirements as the standards do not provide the maximum limit for any particular disclosure.

The annual report includes certain areas which are purely judgmental and are left for the directors to comment such as the area of “Going Concern assumption”. The directors use this are to comment on the going concern of the company and illustrate the going concern by shedding light on numerous reasons why they assume the company is a going concern. (Holmes 2008) One of the foremost causes of the detailed and lengthy annual report is the demand for detailed and lengthy information set forth by the requirements of the Accounting standards and the regulatory bodies.

These disclosures include the detailed disclosure of the remuneration of directors, pattern of shareholding and structure of committees. International Accounting Standard I requires a disclosure of the summary of significant accounting policies. These disclosures usually remain untouched year after year, including the copying of policies from the IFRS or descriptive financial statements. These disclosures easily take up to eight pages or even more. There is a regulatory requirement for the company to include a directors’ report based on their view on the financial statements of the company.

This report is used by the directors to shed some light on the

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“FINANCIAL ACCOUNTING 3 Essay Example | Topics and Well Written Essays - 1250 words”, n.d.)
FINANCIAL ACCOUNTING 3 Essay Example | Topics and Well Written Essays - 1250 words. Retrieved from https://studentshare.org/finance-accounting/1585560-financial-accounting-3
(FINANCIAL ACCOUNTING 3 Essay Example | Topics and Well Written Essays - 1250 Words)
FINANCIAL ACCOUNTING 3 Essay Example | Topics and Well Written Essays - 1250 Words. https://studentshare.org/finance-accounting/1585560-financial-accounting-3.
“FINANCIAL ACCOUNTING 3 Essay Example | Topics and Well Written Essays - 1250 Words”, n.d. https://studentshare.org/finance-accounting/1585560-financial-accounting-3.
  • Cited: 0 times

CHECK THESE SAMPLES OF FINANCIAL ACCOUNTING 3

Finanical Accounting Concepts Phase 1 DB

Tangible financial accounting Concepts” Phase DB Users of Accounting Information The accounting information is used by a number of people, within and outside the organization.... The various users of accounting information and the purpose of the information that they need are as under: Assets are what an organization owns and these are of value to the… Assets are like a resource to the company.... The various users of accounting information and the purpose of the information that they need are as under:1....
2 Pages (500 words) Essay

Financial Management Analysis - Associated British Food Plc

In this assignment an analysis is made of financial statements of the company through ratio analysis.... is a Australian based company in the sector of Food and Staple.... The purpose of this assessment to analyze performance, liquidity, efficiency, and capital… Associated British Food Plc....
7 Pages (1750 words) Essay

Framework of Accounting

accounting is one such function which provides the guidelines for reporting for all types of While accounting for sole trader and partnership are taken up only for the purposes of tax reporting, corporate accounting is widely shared across the world so that the information can be accessed by the various users who may be affected by such information.... These concepts combined with the three golden rules of accounting viz.... A small description of these concepts would give a bird's eye view on the basics of accounting language: Dual Aspect Concept: Any income is an outcome of some benefit foregone called the expense....
13 Pages (3250 words) Essay

Financial Reporting - International Accounting Standard

It sets out the accounting principles for Provisions, contingent assets and contingent liabilities.... Before the issue… f this standard there was great concern in this area of accounting where companies had been accused of manipulating the financial statements and of creative accounting. IAS 37 was issued in order to deal with the subjective area of provision and to prevent the use of ‘big IAS 37 requires that (in accordance with the definition of a liability) a provision should be made where the matter gives rise to a constructive or legal obligation and where there is a probability that there will be an outflow of economic benefits which can be reliably measured....
8 Pages (2000 words) Assignment

Financial Accounting Theories in a Real Life

There are diverse kinds of theories that prevail in financial accounting.... It has been observed Different researchers have dissimilar views regarding financial accounting theories (McGraw-Hill, 2006).... It has been observed from the analysis of the report that there should be certain strict regulations in order to reduce cases related to misleading financial accounts which… accounting is known as the universal language relating to business all over the world....
8 Pages (2000 words) Assignment

Financial Accounting Week 4- Individual Work

The financial ratios show the profitability of a business and the efficiency of the business to meet its financial obligations both in the short-term and in the long-term.... This shows that the business is doing quite well hence can manage its financial obligations.... This indicates presence of working capital and the business is in a position to meet its financial obligations as the ratio increases with the change in the years....
3 Pages (750 words) Assignment

Financial Accounting Week 8- Individual Work

They also include the costs useful in making a project or equipment in a commercial state. The Depreciation Base; it is defined as the… It includes the costs of preparing the asset for preparation of the asset for final use, less the estimated salvage value of the property, goodwill The amount of the equipment that will be depreciated over the life of the equipment will be the Depreciation Base value of the equipment....
3 Pages (750 words) Assignment

Discuss policies to stop the dollar falling

Journal of financial accounting, 3(4) 86-90... It is easier to formulate the rules to deter the dollar from falling, but if the there is no implementation of these rules then nothing is being done, and threats will… In the attempt to achieve this situation, the concerned institutions must receive thorough revisions to legitimize their potentials, promote acceptability, and sustainability....
1 Pages (250 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us