Financial Reporting Assignment Example | Topics and Well Written Essays - 2250 words

Financial Reporting - Assignment Example The involvement of the all stakeholders, the identification of the economic status, financial identification and effective transmission of the components of the financial reports outlines the main characteristics of effective and good quality financial reports (Helen and Gary 2001, P. 57). Although conventional financial statement systems are still effective in providing financial reports in an organisation, the adoption of contemporary financial reporting techniques and policies have proved to be more valuable and cost-effective. Organisations provide financial reports to facilitate the successful creation of practical regulatory policies and for procurement authorisation. To address the issues of finance reporting extensively, International Trade Organisations have developed various policies aimed at harmonising the global financial reporting process for the benefit of global economic development. One such initiative was the formation of International Accounting Standards (IAS 10) to harmonise accounting practices across the globe. The main aim of the IAS 10 policy framework was to prescribe the most effective timeframe for adjusting financial statements for an organisation and to enable the identification of necessary disclosure requirements regarding the date for financial statement authorisation and the events that followed the reporting period. The standard stipulates that, an organisation should not prepare financial reports based on going-concerns. The International Accounting Standards (IAS 10) offers an explanation of the events that occur after the finance reporting date. The standard is also exceptionally decisive in explaining various activities that occur instantaneously after reporting period. Definitions Events after the reporting period- This entails the inauspicious and constructive happenings that takes place after the end of the reporting date and before the date of authorisation of the financial statement. Adjusting Events These are events that offer comprehensive evidence to support the occurrences that take place at the end of the reporting date. Adjusting events also incorporates the events that relate to the inappropriateness of the going concerns assumption in the entire or part of the financial plan (Evans, 2000, p.535). Non-Adjusting Events These are events that reveal the conditions that occur after the termination of the reporting date and do not interfere with the organisation’s financial report. These events occur at the end of the reporting period. However, these events should not be allowed to inference with the absolute finance reporting. The Scope of the Provision This standard is only appropriate in the entire accounting process, at the disclosure and in the analysis of events that occurs after the reporting time. Objective of International Accounting Standard (IAS 10) This provision is aimed at prescribing the most appropriate time for adjusting financial statements for events that might take p lace after the reporting period. The provision also offers a description of the necessary disclosures regarding the financial statement authorisation and the impact of the events that take place after the reporting date to the organisation finance report. The provision is as well expected to ensure that no organisation prepares its financial reports on a going concern basis. This occurs in the scenario where,