Financial liability and Financial reporting: Difference between pages

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''Financial reporting.''
1. ''External.''


IAS 32 defines a financial liability as liability that is any of the following:
Financial reporting is traditionally external.


It is concerned with collating and providing information to external stakeholders, the financial markets and the public.


1.
Contrasted with management accounting, which provides information for internal stakeholders.


A contractual obligation either to:
*Deliver cash or another financial asset to another entity; or
*Exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the reporting entity.




2.
:<span style="color:#4B0082">'''''The objective of financial reporting (International Financial Reporting Standards overview)'''''</span>
 
:The users of financial information need to assess:
 
:*Prospects for future net cash inflows to the reporting entity; and
:*Management's stewardship of the entity's economic resources.
 
 
:Accordingly, financial reporting seeks to provide information about:
 
:*The entity's economic resources (assets), claims against the entity (liabilities) and changes in those resources and claims; and
:*How efficiently and effectively management has discharged its responsibilities to use the entity's economic resources.
 
 
External reporting is mandatory for all limited liability companies, regardless of who owns them.
 
However, smaller and privately owned companies do have relatively lighter (mandatory) reporting requirements.
 
All companies may choose to publish more than the minimum mandatory information.
 
 
Financial reporting is also known as ''financial accounting''.
 
 
2. ''Internal.''
 
The term 'financial reporting' is also used by some organisations in a broader sense, to include internal reporting (as well as external).


A contract that will or may be settled in the reporting entity's own equity instruments, and is either:
*A non-derivative for which the entity is or may be obliged to deliver a variable number of the reporting entity's own equity instruments; or
*A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the reporting entity's own equity instruments.




== See also ==
== See also ==
* [[Amortised cost]]
* [[Accounts]]
* [[Equity instrument]]
* [[Annual report]]
* [[Financial asset]]
* [[Assets]]
* [[Financial instrument]]
* [[Closing exchange rate]]
* [[Derivative instrument]]
* [[Company]]
* [[IAS 32]]
* [[Conceptual framework]]
* [[Credit]]
* [[Entity]]
* [[Environmental profit and loss]]
* [[Equity]]
* [[Finance]]
* [[Financial accounting]]
* [[Financial planning and analysis]]
* [[Fiscal]]
* [[Incremental]]
* [[International Financial Reporting Standards]] (IFRS)
* [[International Integrated Reporting Council]] (IIRC)
* [[Liabilities]]
* [[Liabilities]]
* [[Limited liability company]]
* [[Management accounting]]
* [[Management efficiency ratio]]
* [[Performance]]
* [[Position]]
* [[Primary statements]]
* [[Private company]]
* [[Shareholder]]
* [[Small and Medium-sized Enterprises]]
* [[Stakeholder]]
* [[Stewardship]]
* [[Sustainability Accounting Standards Board]] (SASB)
* [[Sustainable Finance Disclosure Regulation]] (SFDR)
* [[Useful financial information]]
* [[Value Reporting Foundation]] (VRF)


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]

Revision as of 11:52, 28 July 2021

1. External.

Financial reporting is traditionally external.

It is concerned with collating and providing information to external stakeholders, the financial markets and the public.

Contrasted with management accounting, which provides information for internal stakeholders.


The objective of financial reporting (International Financial Reporting Standards overview)
The users of financial information need to assess:
  • Prospects for future net cash inflows to the reporting entity; and
  • Management's stewardship of the entity's economic resources.


Accordingly, financial reporting seeks to provide information about:
  • The entity's economic resources (assets), claims against the entity (liabilities) and changes in those resources and claims; and
  • How efficiently and effectively management has discharged its responsibilities to use the entity's economic resources.


External reporting is mandatory for all limited liability companies, regardless of who owns them.

However, smaller and privately owned companies do have relatively lighter (mandatory) reporting requirements.

All companies may choose to publish more than the minimum mandatory information.


Financial reporting is also known as financial accounting.


2. Internal.

The term 'financial reporting' is also used by some organisations in a broader sense, to include internal reporting (as well as external).


See also

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