“ Dreams should be seen with unfastened eyes ” is the moto of my life. I have done my schooling from The Assembly Of God Church School which groomed my personality and developed the individual in me that I am today. The best portion of school was when I became the caput miss of school in category 12 because of which I learned to shoulder duties. The charge of the pupil ‘s council instilled in me the quality of being a good leader. I besides learned the art of equilibrating different picks that is why I ne’er over looked my faculty members and became the topper of my school with a 95 % in I.S.C. scrutiny. The best portion was when I achieved pupil of the month award by Teen Telegraph. After category 12 I graduated from the top misss ‘ college in Kolkata i.e. J.D.Birla Institute. Then I got through St.Xaviers College for my Masterss which was another accomplishment.
All these could non hold been possible without the support of my household. They believed in me that I could come so far. They still have high hopes for me. I hope I could accomplish those dreams for them. I want to be a really large enterpriser, the 1 who could lend to the society something in gratitude. I believe in populating a simple but honorable life. I hope that I benefit the society with the aid of my instruction and lend my portion in constructing a better topographic point to populate in. I dream large and maintain the religion and will in me to do all those dreams come true.
My avocations are to listen to music, ticker films, thrust, and travel. I like cooking in my leisure clip. I love baking bars. I besides desire to have a concatenation of eating houses in my name. I have besides worked as an article assisstant in a CA house. I want to see myself holding my ain company 10 old ages down the line along with atleast one or two little nutrient articulation.
What do you intend Corporate Financial Reporting? How do the Companies report their consequences? Who are the users of fiscal studies?
Meaning OF CORPORATE AND FINANCIAL REPORT
Corporate Financial Reporting means communicating of the fiscal information of the company or endeavor to the external universe every bit good as to the company itself. There are two of import facets in the Corporate Financial Reporting procedure i.e. measuring of fiscal place and its revelation.
Bedford conceptualises the Financial Reporting procedure as four proficient stairss which are as follows:
1. Percept of the important activity of the accounting entity or in the environment in which the entity performs. Implicit in the traditional perceptual experience is the belief that fiscal minutess represent the important activities.
2. Typifying the sensed activities n such manner that a database of the activities is available that can so be analyzed to hold on an apprehension of the interrelatedness of the mass of sensed activities. Conventionally, this symbolisation has taken the signifier of recordings in histories, diaries, and legers utilizing well-established clerking and measuring processs.
3. Analysis of the theoretical account of activities in order to sum up the interrelatednesss among activities and to supply a position image or map of the entity. Traditionally, this analysis procedure has been viewed as one of developing accounting studies to supply penetrations into the nature or entity activities.
4. Communication ( transmittal ) of the analysis to users of the accounting merchandises to steer determination shapers in directing future activities of the entity or in altering their relationship with the entity. ( Bedford )
The first two stairss inside informations the procedure of quantification of the entity ‘s economic place i.e. the procedure of measuring and the last two stairss covers the procedure of revelation. Thus these two facets are correlated and together they constitute Corporate Financial coverage.
In other words, fiscal coverage is helpful to show and interested equity stockholders, investors, loaners, and other creditors in doing determinations in their capacity as capital fund suppliers. The fiscal study spreads knowledge about an endeavor ‘s economic resources, claims to those resources, and the minutess and other events and fortunes that change them. The extent to which a fiscal study is helpful depends chiefly on the qualitative properties of the fiscal information which are as follows:
1. Relevance: Information is said to be relevant if it can impact the fiscal determination taken by an entity. If information is utile in outlining fiscal study so it is relevant otherwise non.
2. Dependability: Information is said to be dependable if it is error free, indifferent and can organize the footing of determination devising i.e. it represents those informations and facts which it is suppose to.
3. Comparison: Information is said to be comparable when difference could be made out in entity ‘s past fiscal study or different entity ‘s fiscal study to accomplish betterment and enable better representation of fiscal informations.
4. Comprehensibility: Information is said to be apprehensible if the users of the fiscal study are able to understand the information and frame economic determinations based on those informations and facts.
THE WAYS IN WHICH COMPANIES REPORT THEIR RESULTS
As per ICAI, the companies report their consequences in the undermentioned stairss:
1. Record runing informations by debiting and crediting fiscal histories.
2. Report accurate accounting statements at the terminal of each month, one-fourth, and twelvemonth.
3. Prepare fiscal statements in conformity with corporate policies, industry practises and regulative guidelines.
4. Ensure rightness and truth of fiscal statements.
5. Fix fiscal statement which includes:
a ) Balance Sheet ( or statement of fiscal place ) : Balance Sheet is a fiscal statement which shows the assets and liabiliteies of the company as on a peculiar day of the month. Thus it is utile to the company in describing its fiscal place and to the users of the fiscal statement in deducing information about the company ‘s plus resources and capital place.
B ) Net income and Loss Account ( or statement of net incomes or income statement ) : Net income and Loss Account is a statement of income and disbursal of the company for a peculiar period. It provides information about operating gross and outgo and finally tells whether a company is running in net incomes or non.
degree Celsiuss ) Cash Flow Statement ( or statement of hard currency flows ) : Cash Flow Statement shows the influx and escape of hard currency in a company. Thus it helps in informing about the company ‘s hard currency payments and grosss for a peculiar period of clip.
vitamin D ) Notes on Histories: Notes on Histories are extra information which the company provides so that the users of the information acquire complete, relevant and dependable information. These are used to do revelations and supply pes notes. ( Institute of Chartered Accountants of India )
THE USERS OF FINANCIAL REPORTS
The users of fiscal study can loosely classified into two catagories which are as follows:
( 1 ) Internal Users- Internal users are those who are insiders of a company and by the usage of fiscal study they help the company to better. Few illustrations of internal users are:
( I ) Management- It uses the fiscal study to look into its ain public presentation to measure their consequences and overcome the mistakes, if any. They use the fiscal study to compare their ain public presentation with their past public presentation and with that of other company ‘s public presentation.
( two ) Board of directors- They use the fiscal information to measure the public presentation of the direction. They use the information to see that whether the direction is runing decently or non.
( three ) Employees- They use the fiscal study to do determination about corporate bargainning contracts for demanding fillip or salary addition. They see that whether the company is running in net incomes or non and so establish their demands sing their wage.
( four ) Equity Investors/Shareholders- They use the fiscal study to jugde whether their investing is in safe custodies or non, in other words, to cognize the fiscal place of the company. They see the fiscal studies to look into that they get their returns in equal sum as compared with the returns of other company.
( 2 ) External Users- External Users are those who are foreigners of a company and by the usage of fiscal study they gain knowledge about the company, its place, and its activities refering others. Few illustrations of external users are:
( I ) Prospective and interested investors- They use the fiscal study in make up one’s minding the fact that whether they should put in the company or not.They base their determinations on the information provided in the studies.
( two ) Financial institutions- They use the information to look into the recognition worthiness of the company in which they have invested or hold given loan and see that their money is in safe custodies.
( three ) Customers and suppliers- They use the fiscal study to see the finanicial strength or failing of the company to which they are associated. Thus they get a better thought of the company.
( four ) Media- The media uses the fiscal study to look into whether the company is socially responsible or non and helps to convey into focal point any cozenage into populace ‘s oculus, if any.
( V ) Government- It uses the fiscal study to maintain a ticker on the activities of the company i.e. it acts as a watchdog so that it can modulate all the fiscal and non-financial actions of the company. It besides uses the fiscal study to guarantee that the revenue enhancements paid by the company are accurate or non.
( six ) Recognition Rating Agencies- They use the fiscal study for the intent of evaluation the company depending on the peril, recognition worthiness, liquidness place of the company
( seven ) Competitors- They use the fiscal study to compare their ain consequences with their rivals. They use this information to border competetive schemes in make up one’s minding their programs and policies based on rival companies ‘ fiscal consequences.
( eight ) Financial analysts- Financial analysts such as fund directors, stock agents, investing adviser use the fiscal study in order to propose investing in peculiar company/s to their clients. They use the fiscal information to garner cognition about the company/s in which their clients are interested so as to steer them whether or non to put in the company/s depending upon its fiscal place.
Decision: Corporate Financial Reporting is non limited to information communicated through fiscal statements but besides integrated information provide through informal agencies such as imperativeness release, direction anticipations, etc. To sum up it is of import to observe that understanding the construct of fiscal coverage is esssential for proper and accurate accounting.