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Finincial Accounting

In: Business and Management

Submitted By magomuArthur
Words 2520
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Learning outcome (1): Understand the regulatory framework for financial reporting
User needs: Accounting standards Board (ASBs) Statement of Principles INTRODUCTION
This section of the unit discusses the qualitative characteristics of the financial statements and how it relates to the content and presentation of a financial statement. The second part of this paper sets out to assess the difficulty preparing a useful set of financial statements that exhibits the qualitative characteristics mentioned in the first part.
Defining a financial report:
A financial report is a written report which quantitatively describes the financial health of a company. Financial statements are usually compiled on a quarterly and annually basis .
According to the Accounting Standards Board (1999), the objective of financial statement is to provide information on the reporting entity's financial position and performance that is useful to a wide range of users to assess the management and for decision making.
Composition of a complete financial statement
As per IAS 1 (international Accounting Standard), a complete set of financial statement comprises of: * A statement of financial position (balance sheet) * A statement of comprehensive income for the period (income statement) * A statement of cash flow * A statement of changes in equity * Notes comprising a summary of significant accounting policies and other explanatory information. * A statement of financial position (Balance sheet) as at the beginning of the earliest comparative period when an entity applies an accounting policy retrospectively or makes a retrospective restatement in items in financial statement or when it reclassifies in its financial statement.
However, the primary financial statements comprises of statement of financial position, statement of comprehensive income and statement of cash flow.…...

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