Financial Reporting Sample
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The given project report is based on the financial reporting of the Next Plc. Next Plc is the operating in the retail stores in UK. The given project is segregated into eight tasks. The first task of the project is related to the objective determined by the IASB’s that should organization comply (Ahrendsen, and Katchova, 2012). Second task of the project is related with the issue of leading investor with the financial statement of Next Plc. Third task of the project is related with the information need by the potential investor to make their investing decision for the Next Plc.
Fourth part of the project is related with the evaluation of Next’s EPS and importance and the significance for the following. Next task is related to the evaluation of non-current elements of the balance sheet of the Next Plc. The evaluation in the project will be based on the accounting policy and the impact of the elements on the decision of the users. Sixth task of the project is related with the purpose of cash flow statement and analysis of it according to the given cash flow. The last two parts is based on the ratio analysis and the evaluation of additional reports.
The purpose according to the IASB is to relevant information about the accounting transaction should be provided in the financial statement of the organization. The primary and the general users of the organization use this information for making accounting decision, so the information provided in the statement should be material and reliable to the users of the organization.
The objective determined by IASB can be achieved by using the following qualities in the preparation of the financial statement of the organization. The characteristics are as following- first is the information provided in the financial statement should be reliable and relevant for the users in context of making decision about the investment. Second is materiality, the information provided in the financial statement should be important and useful for the stakeholders and the information should be able to satisfy the objective of the stakeholders (IASB invites comments on financial reporting framework, 2013).
Next quality is comparability; the financial statements should be comparable with previous financial statement as well as with financial statement of other firms. The information provided in it should be verifiable to economic purpose of the users, and should have faithful representation of information. Information of the organization should not contain the window dressing in the statement.
The factor that makes information more useful and appropriate is factor of time. If information is provided early or late is of no use. The information should be understandable; it does not include complex words, which created dilemma for the users of the information.
Obfuscation and lack of insight are the qualities that should be disqualifies from the financial information of the organization. The following qualities occur when organization try to serve so may stakeholders in one report (IASB invites comments on financial reporting framework, 2013). Obfuscation and the lack of insight create complications in the financial statement of the organization that indicated company is not able to achieving the purpose of financial statements determined by the IASB and that can create the legal issue of the organization.
The leading investor had raised the issue of obfuscation and the lack of insight in the financial statement of Next Plc. After the critical evaluation of the financial statement of the Next Plc, the issue raised by investor is not justifiable as the company has large stakeholders, so they have to provide detailed report with certain information to satisfy them (Weygandt and et. al., 2009). The information provided by the Next Plc includes all the qualities which should be present to achieve the standard set by the IASB. The information is comparable and verifiable for the users and it is easy to understand by the users and relevant to making the investing decision in the organization.
The only issue is can be determined in the financial statement of Next Plc, is the information is provided is in so detail, that it is creating complications and making it difficult for them to making the investment decision for the organization, but still it cannot be reason for the obfuscation and lack of insight by the investors (Kastantin, 2005). The solution for the issue can be tailored annual reports should be provided to the users, which contain the only information which is relevant for them. The other information should be provided in brief, if they want details, then detailed report should be provided by the Next Plc. Then will not create the complications for the user of the organization.
The given report is based on the financial analysis and reporting of the Next Plc. From the following report it can be articulated that the financial assignment statement of the organization should be according to the objective of the IFRS and the IASB (United nations framework convention on climate change, 2007). The information used by the potential and the existing investors should be relevant to make the investment decision. The ratio analysis helps to determine and interpretation the financial position of the business. The analysis of other report is to be done for the analysis of whole business operations.
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