The Valuation of Assets (and/or Liabilities) in Financial Reporting – An Ethical Question. - Essay Example

Only on StudentShare

Extract of sample
The Valuation of Assets (and/or Liabilities) in Financial Reporting – An Ethical Question.

Due to such a function, financial statements are vitally important both from a trust as well as an ethical standpoint. Ultimately, two approaches underlie the approach that a firm/entity/business/organization can leverage as a means of approaching this issue. Both of these perspectives will be analyzed and elaborated upon within this brief analysis as a means of impressing upon the reader which ethical perspective is the most ethical and why it should be pursued. As such, the two perspectives which will be discussed are whether it is ethical and appropriate to allow management of the firm to present financial information in a “flexible” manner so that the “dips” and “lows” of a business are not directly translated via each and every market pressure. The rationale behind this is that without such an approach a freely floating publicly traded firm could quickly lose the trust of its investors and see an overnight loss of a very large percentage of its overall assets merely due to the fact that the stakeholders inferred that the company was somehow troubled; whether an understanding was legitimate or not (Mitra et al 159). ...
Download paper

Summary

Throughout history financial statements have been used to evaluate the financial performance of companies to present others, as well as internal stakeholders, a firm analysis of where the company stands and what potential strengths and weaknesses it poses for the future…
Author : mdietrich

Related Essays

Financial statements of a company
Center of discussion in this paper is Stewardship as the ethical responsibility of the managers to effectively and honestly manage the resources of the firm. Managers therefore are considered as stewards of the firm however, managers are also considered as self-interested individuals who can pursue their own objectives too. Such tendency of the managers therefore requires that the shareholders must use company financial statements to ensure that the managers are performing their stewardship duty. Through techniques such as financial ratio analysis, shareholders can actually look into the...
6 pages (1506 words) Essay
Contribution of relevance and reliability on financial reporting.
Main objective of accounting policy is to produce fair valued accounting information that is highly reliable and relevant to the purpose and objectives of financials statement. Financial statements are the most important components of annual report that all public limited companies publish each year for the stakeholders of the company. The financial statements need to be the fair and ethical representation of financial details of all activities performed by the companies. Financial information is responsible for financial decision making by the investors, creditors, suppliers etc. Most...
14 pages (3514 words) Essay
Financial Reporting
InterContinental Hotels primarily listed on the London Stock exchange and is a constituent of the FTSE 100 Index. It is secondary listed on the New York Stock Exchange. This report is concerned with the performance of the group in the last Accounting period, 2011. Therefore, performance analysis will compare results of 2011 with those of 2010. We will also analyze segmental information of the group by comparing 2011 results with 2010 results. 1.1 Analysis of segmental information In this analysis, we will consider two segments in IHG which are the business segments and the geographical...
6 pages (1506 words) Essay
Financial Reporting
Also, there is the problem that no one individual or corporation has full ownership of the earth, so it would be very difficult to account for. Even if some accountants did factor use of the earth into the accounts, there would likely be many more that would not do this. Accountants do have the expertise required because they understand how assets depreciate and also how to balance the economic equation of assets equals liabilities plus equity. If such a system was put in place to allow accountants to value the earth, then it may be possible to do. The major problem is trying to get everyone...
3 pages (753 words) Essay
Assessment of recent developments in financial reporting
This study will understand whether legal enactments and obligations are sufficient to perform financial activities in an ethical and logical manner. Drafting the financial reporting takes a lot of accounting knows how and also the thorough knowledge of legal obligations. The author of the study would lay emphasis on the accurate conduct of financial activities with guidance from the standards laid down by the accounting standards and the legal requirements. The need of these accurate financial reporting and also the critical evaluation of the effectiveness of the legal requirements in the...
9 pages (2259 words) Essay
Financial Reporting
Due to this increase in performance of the financial statements of the company, the earnings per share increased as well as the dividend payout ratios went up with a coverage of 2.8 times for the full year, which is the shareholder’s interest in the organization. As compared with the market ratios from IHG company, Next company shown a growth in all its financial aspects. The accounts have been presented in accordance with the IFRS 7 and 12 which requires disclosure of interest in other parties IFRS 10 which requires consolidating the group accounts and IAS 1 to 9 which talks of all the...
6 pages (1506 words) Coursework
Financial Reporting
The assets listed in Coca-Cola Company’s balance sheet are classified into two main categories, current and other assets. Current assets are divided into two sections, with the first one being cash and cash equivalents and short term investments (The Coca-Cola Company, 2013). All the other assets that do not make up part of current assets are the long-term assets that are listed individually. In a balance sheet, cash equivalents always appear with cash as the first of current assets. From research, it is noted that cash equivalents are non-cash assets that are highly liquid or can be...
3 pages (753 words) Assignment
Got a tricky question? Receive an answer from students like you! Try us!