Financial Reporting - Research Paper Example

Only on StudentShare

Extract of sample
Financial Reporting

Depreciation is an expense charged on the asset. It does not affect cash balance in the firm. An increase in trade payables increases cash inflow. This gives a balance from operations of 1377. Interest paid and income tax paid reduces cash balance too. At the end of the day, net cash from operating activities is overstated by depreciation and profit before tax and interest. A company's performance are realistical and do not depend so much on profits earned in the period but on liquidity of cashflows
International Accounting Standards 7 "provides information to users of financial statements about cashflows of a company. It provides information on ability of the company to generate cash and cash equivalents. It also indicated cash needs for the enterprise. The standards provides that cash needs for the activities, investing activities and financing activities"
These are accounts of two companies that are combined into one account. This happens when one firm acquires one or more other companies. This is mainly for a business combination a company acquires control of one or more enterprises. They combine into one entity as a whole therefore profit and loss accounts are combined into one.
This is where o ...
Download paper


Definition: In the longrun, profits result in increase of Company's cash balance but this doesn't help to pay out short term obligations. In the shortrun, making profit will not necessarily result in an increase in c ahs balance. Therefore we need to distinguish between cash and profits, and to determine the usefulness of information provided in balance sheet and income statements in the problem of deciding whether a company, has or will be able to generate sufficient cash to finance its operations.
Author : tillmanseth

Related Essays

Financial Reporting and Accounting
To begin we will talk briefly about the evolution of Accounting in both countries.
12 pages (3012 words) Essay
Financial Reporting on Enron
But as the time passed by the firm's business mix shifted from the regulated transportation of natural gas to unregulated energy trading markets. Since in the energy trading more money could be made in buying and selling financial contracts linked to the value of energy assets than in actual ownership of physical assets. Because of its business nature Enron's reported annual revenues grew from under $10 billion in the early 1990s to $101 billion in 2000, ranking it seventh on the Fortune 500 (Benston 2002).
18 pages (4518 words) Case Study
Financial Reporting Master Research Paper
The observance of accounting standards in reporting is mandatory in all countries as per the direction of Accounting Standard Board (ASB). All countries have developed their own accounting standards and in the absence of a standard in any occasion, Generally Accepted Accounting Standards (GAAP) can be followed. This report has four sections, namely A, B, C, and D. Section 'A' deals with the specific accounting policies adopted by Tesco, Sainsbury and Morrison, followed by the comparison of the same between one another. It also throws light on whether there are any differences in the accounting...
17 pages (4267 words) Research Paper
Financial Reporting
Each major purpose of accounting often requires a different way of presenting or reporting the information in the accounting system. In this scenario, it may be emphasized that it is a vicious circle in that there are managers in organizations who affect accounting and such accounting in turn affects people's behaviour. The impact of accounting reports on the decision making behaviour of business, government and creditors is termed as the 'economic consequences' and the world has seen the worst of such consequences because of the bad reporting as in the case of 'Enron Corporation'. It may also...
6 pages (1506 words) Essay
Global Financial Crisis Research Paper
(Avgouleas, 2008). In addition other major investment banks such as Merrill Lynch, Citigroup, UBS, and JPMorgan have all announced negative earnings in their last financial reports as well as plans to lay off a significant number of workers. This paper carries out a comparative review of how the credit crunch affected Northern Rock in the UK and other major United Kingdom based bank. These other banks include, the Royal Bank of Scotland, Halifax Bank of Scotland and Bradford and Bingley.
17 pages (4267 words) Research Paper
Financial Reporting Appraisal
Many authors have dealt with the issue of clarity and understand ability of the annual reports (Lee and Tweedie, 1975; Smith, 1992; Keane, 1977). In fact many authors emphasised the fact that shareholders tend to read the narrative part of the annual report which normally includes good news, rather than reading statutory part and usually investors make their investment decisions depending on those good news (Tauringana and Chong, 2004; Smith and Taffler, 1992). However In order to make an informed investment decision, an investor who is contemplating investment needs to understand both the...
18 pages (4518 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!