Thus the accrual method of accounting measures the position and performance of the company based on the transactions made in the course of business irrespective of the cash receipts and payments done for the business transaction. The accrual method of accounting combines the current and expected cash inflows and outflows to determine the consolidated financial position of the company (Sofat and Hiro, 2008, p.36). Marks and Spencer has used the accrual method to determine the expected value of the cash flows based on the historical sales returns so that the accrued figures could be allocated accurately in the financial statements. Assumptions related to Going-Concern for preparing financial statements The assumptions related to going concern for preparing financial statements are that the company would continue its business in near future unless the management decides to liquidate the company or decides to stop operations. When the financial statements are prepared by assuming the going concern of a business entity, the assets and liabilities are allocated with the assumption that if the company continues its operations, it would be able to acquire the same amount of assets or would be able to service the same amount of liabilities (Bhattacharyya, 2011, p.48). Ex. Marks and Spencer have prepared their financial statements with the assumption of going concern after considering the risk and uncertainties of the business. The assessment of the assets and liabilities for the foreseeable future has been done based on projections after consideration of risk. Key accounting concepts used in preparation of financial statements The accounting method is a tool based on which the financial statements are prepared and the information given in the financial statements are meant for the users. Thus the preparation of financial statements involves key accounting concepts which are standardized for the companies. The key accounting concepts are combined together to form the generally accepted accounting principles (GAAP). The accounting concepts that are used in the preparation of the financial statements are such as money measurement, entity, cost, going concern, objectivity, dual aspect, time period, realization, conservatism, consistency, matching, materiality. The consideration of an entity and its distinction from the owners is important for preparation of the financial statements. The business, sales and receipts in accounting are done in terms of money measurement. The business is considered to carry on its economic activities for a sustainable period of time unless the operations cease to exist on the basis of decision of owners. This concept forms the basis of a going concern that is used in accounting method (Crosson and Needles, 2010, p.52). The accounting measurements takes into consideration the cost incurred by the company for running the business. This includes the cost of capital, cost of goods sold, etc. The dual aspect in accounting states that the assets are equal to the liabilities of the company. The objectivity in accounting met
Financial Accounting coursework Table of Contents Relevance of Accrual Accounting 3 Assumptions related to Going-Concern for preparing financial statements 3 Key accounting concepts used in preparation of financial statements 4 Marks and Spencer Group Plc: Accounting policies 5 Marks and Spencer Group Plc Financial statements: information on assets and liabilities 6 Marks and Spencer Group Plc: Impact of impairment 6 References 8 Relevance of Accrual Accounting The method of accrual accounting is one of the most commonly used methods of accounting adopted by multinational companies like Marks and Spencer…
The research includes financial statement analysis of the company’s 2010 accounting period and 2011 accounting period. The financial statements indicate Tesco Plc fared financially well during the 2010 and 2011 accounting periods. Part 1 (a) Chief Executive’s Review Some of the contents of the chief executive officer’s report are useful.
The company offers a huge range of products including food items, general merchandise, accessories, household items, and electrical products. In addition to its core business the company also provides financial services including insurance and retail banking.
Key Accounting Concepts and Conventions…………………………………………..4 4. Marks & Spencer’s treatment of PPE, Intangible assets and provisions……………5 5. Impact of Impairment on Marks & Spencer’s Finance Performance………………6 6.
the venturer should recognize in its financial statements the assets that it controls, the liabilities that it incurs, the expenses that it incurs, and its share of income from sale of goods or services by the joint venture. (IAS 31.18). Also International Accounting Standard
The information is not just useful for the capital providers but also to the other user groups such as government, regulatory bodies etc. The next level of conceptual framework is the fundamental concepts i.e. qualitative
ain the difference between the direct and indirect methods, of presenting Operating cash flow section of the Cash Flow Statement, including the layout of each. Task 3 will compare and contrast how Surgutneftgas and Gazprom, as public limited companies, in the same industry for