AY5113 Advanced International Financial Reporting Assignment Example NUI Galway Ireland
The Advanced International Financial Reporting (AIFR) assignment is a challenging but important piece of work for students in Ireland. This assignment will offer some tips on how to best approach the task.
The course aims to develop students the ability to understand how subjectivity can impact an accountant’s work. In order for them to succeed, they’ll need not only knowledge about relevant legislation and International Financial Reporting Standards (IFRS), but also ethical behavior when preparing reports that are accurate while being fair towards both themselves as well other stakeholders involved with the company’s finances
This objective will be met by teaching finance undergraduates reading comprehension skills so these individuals may comprehend complicated financial statements along with application areas such applies ethics appropriately during report production.
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In this course, there are many types of assignments given to students like individual assignments, group-based assignments, reports, case studies, final year projects, skills demonstrations, learner records, and other solutions are given by us.
On successful completion of the module, students should be able to:
Assignment Task 1: Understand and explain the challenges posed by problems such as uncertainty and valuation in the preparation of financial statements
One of the key challenges in accounting is the valuation of assets and liabilities. This is particularly challenging when it comes to items that are uncertain or where there is a lack of market data.
For example, in the case of an unlisted company, there may be no recent market transactions to use as a basis for determining the value of an asset or liability. In these cases, accountants may have to make estimates about what the asset or liability might be worth. This can be a difficult task, particularly when there is a lot of uncertainty surrounding the item in question.
Another challenge posed by uncertainty is in the area of financial statement reporting. In cases where an asset or liability cannot be accurately valued, accountants may have to make a decision to either classify the item as a level 1, 2, or 3 asset/liability.
Assignment Task 2: Explain, using examples, the principles, and practices adopted by the IASB to address challenges such as those posed by uncertainty and valuation, in relation to topics covered on the course
The IASB has developed a set of principles and practices to address the challenges posed by uncertainty and valuation in relation to accounting for financial instruments.
The first challenge is that when an instrument’s value cannot be measured with complete accuracy, then its market price will likely reflect only a partial understanding of this uncertainty. The second challenge arises from the need to measure liabilities at fair values under IFRS when they are not recognized in profit or loss because there has been no prior sale or transfer of ownership. To solve these problems, the IASB has created two new categories for measuring certain types of instruments: “measurements” which use best estimates where available; and “unrealized gains”, which includes gains on investments classified as available for sale.
Additional problems arise in the area of financial instruments because of the lack of accepted market prices, which can make it difficult to determine fair value. This has created issues when it comes to determining whether or not certain transactions have taken place at fair value. The IASB has therefore developed three different classes that can be used in measuring financial instruments. These are:
Asset Valuation Principles and Practices Statement of Financial Accounting Standard (FAS) 157, Disclosure about Fair Value of Financial Instruments (requires disclosure of fair value for all financial instruments measured at amortized cost or certain equity investments, with net realizable value also required for other types of investments)
Assignment Task 3: Read understand and apply International Financial Reporting standards relevant to topics covered on the course, to the preparation of published financial statements
International Financial Reporting Standards (IFRS) are the global accounting and financial reporting standard for companies preparing their financial statements in multiple countries. The IASB, which prepares IFRS codes, issues new versions of its standards every three years. The US-based FASB issues US GAAP – the United States generally accepted accounting principles.
Flexible information requirements mean that some entities will need to use one set of standards while others follow different rules based on where they operate or what type of entity they are—for example, a public company has additional obligations not faced by privately held companies under UK GAAP due to shareholder interest representation concerns. A transition period may exist during which older national systems remain in place until compliance is achieved with both the older set of standards and the new set.
As an example, all listed companies in India had to comply with Indian Accounting Standards (Ind AS) although they were allowed to follow Indian Generally Accepted Accounting Principles (Indian GAAP) while private sector entities had a choice between Ind AS or International Financial Reporting Standards (IFRS). The date at which all companies would be required to file financial statements using Ind AS was moved out by one year, from 1 April 2016 to 31 March 2017.
IFRS has been gradually implemented into Indian Regulations since January 2005. ‘An act to provide for the establishment of Accounting Standards’ has been passed recently in India with its main objective being ‘to ensure proper accountability of the management to the stakeholders and for matters connected therewith or incidental thereto.
The major objective of financial reporting standards is to provide a common language for business transactions within an economy. In addition, they seek to ensure fair presentation by prescribing principles for external financial reports, which are made publicly available. The application of standardized accounting rules facilitates better decisions by ensuring that decision-makers obtain reliable financial information. In addition, publicly available information simplifies institutional investment and financing decisions as well as those of other users, such as creditors and suppliers.
Financial reporting standards also foster transparency, comparability, and accountability in the economic system which enhances public confidence in a country’s economic system. Thus the adoption of IFRS in the European Union (EU) will strengthen the Single Market in Europe and increase its attractiveness to investors at home and abroad.
The main reason for that is that, with the exception of some differences necessary for effective implementation (such as aspects of presentation where practical considerations required certain deviations), IFRS are broadly equivalent to US GAAP, which means that companies are not forced to restate comparative information when they switch from US GAAP to IFRS reporting.
Timeline of the IASB-FASB Convergence Project The FASB issued its first Exposure Draft – Conceptual Framework for Financial Reporting in 1998 which was then replaced by the conceptual framework in 2004. This was followed by the Statement of Financial Accounting Concepts No. 6: Qualitative Characteristics of Accounting Information in July 2008 and the Conceptual Framework for Financial Reporting (2010).
Assignment Task 4: Prepare a comprehensive analysis of financial statements and prepare reports for a variety of users.
Financial statements are an important tool for a variety of users, including investors, creditors, and management.
Investors rely on financial statements to make informed investment decisions. Financial statements can help investors determine a company’s liquidity, profitability, and solvency.
Creditors use financial statement information to assess the credit risk of a borrower. Creditors look at factors such as a company’s liquidity and debt ratios to get an idea of how likely it is that the company will be able to repay its debts.
Management uses financial statement information to make strategic decisions about the future of the business. Management can use financial statements to measure progress towards goals, assess performance relative to competitors, and identify areas where changes need to be made.
The main users of financial statement information are investors, creditors, management, suppliers, customers, market analysts, and regulatory agencies. Each group uses financial statements for different reasons. Investors are primarily interested in the profitability of the business as well as its liquidity and solvency as measured by key ratios.
Creditors also place a great deal of importance on solvency measures, but they are also interested in the company’s ability to repay its debts. Management uses financial statements to assess performance relative to goals and industry benchmarks, monitor business operations, and make strategic decisions. Suppliers want to know whether the business has enough cash or credit available to pay its bills.
Customers are mainly interested in the company’s financial condition because it affects the credit risk of doing business with a particular company. Market analysts use financial statements to monitor a company’s performance and identify potential investment opportunities. Regulatory agencies also monitor companies’ performance relative to budgets, earnings reports, and other accounting standards.
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