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Over Recent Decades, Developments in Company Law and Financial Reporting Standards Have Impacted Significantly on the Reporting - Assignment Example

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Over Recent Decades, Developments in Company Law and Financial Reporting Standards Have Impacted Significantly on the Reporting

This paper focuses on the requirements of U.K. companies for representing financial statement while maintaining some accounting standards and company laws as well as the comparison of financial reporting standards of U.K with that of USA. The current requirements for the reporting of the financial performance of companies in the U.K. In June 2002 the European Union adopted the International Accounting Standards (IAS). For this reason the listed companies in European Union (EU) security market including banks and insurance companies have to prepare their financial statements in accordance with International Financing Reporting Standards. United Kingdom is one the members of EU. For that the U.K. companies have been following the rules and regulation of IFRS since 2005 (Delloitte, 2012). Under the U.K. Companies Act 2006, the directors of the company have to prepare financial statement according to the International Financial Reporting Standard (IFRS). Under this company law the directors have to approve their financial statement by considering that, the statements give the exact and original value (Harthorn & King, 2011, p.70). Director’s report should include the analysis using the key performance indicators and these things indicate the information’s of environmental and employee matters (Elwin & Hirst, 2006, p. 2). There are various operating and regulatory bodies like Financial Reporting Council, Accounting Standard Board, Auditing Practice Board, Accounting and Actuarial Discipline Board. These are involved in setting up the requirements for financial reporting of a company. Financial reporting exposure draft (a document released by Financial Accounting Standard Board) indicates the presentation of information about the company’s financial performance in both the primary statement and supporting notes. It was a proposal, issued in the year of 1992. When the new proposal implemented, it has changed some existing requirements of financial reporting for the companies of U.K. The proposal was made for the advancement of financial reporting standards in some below mentioned field (Accounting Standard Board, 2000, pp. 3-7). 1. The profit and loss account and the total gain & loss statement are combined to form a single financial indicator. 2. The above mentioned statement will indicate all the gains and losses during the time period in which the statement was made. 3. The company should divide the statement in to three parts a. Operating b. financing and treasury c. Other gains and losses 4. While preparing the performance statement for a particular period the amount of dividend paid to the share holders does not get included in that. (Accounting Standard Board, 2000, pp. 11-12) 5. Balance sheets, income statements, retain earning statements and cash flow statements are the four types of primary statement. Primary statement should consider the ownership interest (Primary Financial Statement). Financial Reporting Exposure Draft (FRED) proposes that Earning Per Share (EPS), dividends for a particular period should be mentioned as a memorandum items. These items are shown in the balance sheet but these things are not added in the final total. A letter note including reserves note and note of gains and losses in past days are made optional for the companies ...Show more

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Running Head: FINANCIAL REPORTING STANDARDS Over recent decades, developments in Company Law and Financial Reporting Standards have impacted significantly on the reporting of the financial performance of companies in the UK A country follows a particular standard to report their companies’ financial performance…
Author : kosseliane
Over Recent Decades, Developments in Company Law and Financial Reporting Standards Have Impacted Significantly on the Reporting essay example
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