Financial Statements – Understanding the Framework
Financial Statements – Understanding the Framework
Done by:
Yaazdan Katrak
Cardiff MBA Feb ‘13
Roll No: 1309
Through this framework we learn how to prepare financial statements by applying accounting standards, allows the board to regulate the rules, provides detailed information to those interested in accounting and helps financial users to interpret the information.
The Scope of this framework is to deal with the objective of financial statements, the qualitative characteristic that determines the usefulness of information provided in financial statements, definition, recognition and measurement of the elements from which financial statements are constructed, concepts of capital and capital maintenance.
This framework applies to the financial statements of all reporting enterprises engaged in commercial, industrial and business activities, whether in public or private sector. A reporting enterprise is an enterprise for which there are users who rely on financial statements as their major source of financial information about the enterprise.
The users of financial statements are Investors, Employees, Lenders, Suppliers and other Trade Creditors, Customers, Governments and their agencies and above all Public.
Objective of Financial Statement
The objective of these statements is to provide information about the financial position, performance and cash flow of an enterprise that is useful to a wide range of users. They meet the common need of all users. These statements also show the stewardship of management and because of it some decisions take place such as whether to hold or sell their investment in the enterprise or whether to reappoint or replace the management.
These statements show Financial Position, Performance and Cash Flow. In these economic decisions the financial statements require and evaluation of the ability of an enterprise to generate cash and cash equivalents .For example the capacity of an enterprise to pay its employees and
Done by:
Yaazdan Katrak
Cardiff MBA Feb ‘13
Roll No: 1309
Through this framework we learn how to prepare financial statements by applying accounting standards, allows the board to regulate the rules, provides detailed information to those interested in accounting and helps financial users to interpret the information.
The Scope of this framework is to deal with the objective of financial statements, the qualitative characteristic that determines the usefulness of information provided in financial statements, definition, recognition and measurement of the elements from which financial statements are constructed, concepts of capital and capital maintenance.
This framework applies to the financial statements of all reporting enterprises engaged in commercial, industrial and business activities, whether in public or private sector. A reporting enterprise is an enterprise for which there are users who rely on financial statements as their major source of financial information about the enterprise.
The users of financial statements are Investors, Employees, Lenders, Suppliers and other Trade Creditors, Customers, Governments and their agencies and above all Public.
Objective of Financial Statement
The objective of these statements is to provide information about the financial position, performance and cash flow of an enterprise that is useful to a wide range of users. They meet the common need of all users. These statements also show the stewardship of management and because of it some decisions take place such as whether to hold or sell their investment in the enterprise or whether to reappoint or replace the management.
These statements show Financial Position, Performance and Cash Flow. In these economic decisions the financial statements require and evaluation of the ability of an enterprise to generate cash and cash equivalents .For example the capacity of an enterprise to pay its employees and