Bond and Financial reporting: Difference between pages

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1. ''Securities - debt''.
1.  


In the context of securities, a bond is a formal longer-term debt investment, usually tradeable, issued by a borrowing organisation and bought by a lender (= debt investor).
Financial reporting is traditionally external.


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


The bond is usually administered by a trustee.  
Contrasted with management accounting, which provides information for internal stakeholders.


Bonds typically require the issuer to repay the amount borrowed plus interest over a designated period of time.


The current market yield on the bond is both (1) the market rate of return to the debt investor and (2) the pre-tax market cost to the issuer of debt capital.
External reporting is mandatory for all limited liability companies, regardless of who owns them.


Issuers of bonds include a wide range of corporate and public sector entities, including central governments.
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.


2. ''Trade finance - credit support''.


In trade finance, a bond is an instrument issued by a bank or an insurance company, in favour of a buyer, on behalf of a supplier, as additional assurance to the buyer that the supplier will perform its obligations under the supply contract.
2.  


Such a bank bond or insurance company bond will be supported by an indemnity issued by the supplier in favour of the bank or insurance company.
The term 'financial reporting' is also used by some organisations in a broader sense, to include internal reporting (as well as external).




Examples include advance payment bonds, bid bonds, customs bonds, performance bonds and retention bonds.
Financial reporting is also known as ''financial accounting''.


In this context, the terms "bond" and "guarantee" are often used interchangeably.


:<span style="color:#4B0082">'''''The objective of financial reporting (International Financial Reporting Standards overview)'''''</span>


3. ''Risk management - guarantee.''
:The users of financial information need to assess:


A guarantee provided by one party to another.
:*Prospects for future net cash inflows to the reporting entity; and
:*Management's stewardship of the entity's economic resources.




4. ''Risk management - collateral.''
:Accordingly, financial reporting seeks to provide information about:


An amount of money provided as security for a guarantee.
:*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.




== See also ==
== See also ==
* [[Advance payment bond]]
* [[Accounts]]
* [[Agent bank]]
* [[Annual report]]
* [[An introduction to debt securities]]
* [[Assets]]
* [[Bearer bond ]]
* [[Closing exchange rate]]
*[[Bid bond]]  = tender bond
* [[Conceptual framework]]
* [[Bond basis]]
* [[Credit]]
* [[Bond equivalent yield]]
* [[Entity]]
* [[Bond futures]]
* [[Equity]]
* [[Bond indenture]]
* [[Finance]]
* [[Bond issue]]
* [[Financial accounting]]
* [[Bond mandate]]
* [[Fiscal]]
* [[Bond vigilante]]
* [[FP&A]]
* [[Bonding]]
* [[Incremental]]
* [[Bonding line]]
* [[International Financial Reporting Standards]] (IFRS)
* [[Bulldog bond]]
* [[Liabilities]]
* [[Callable bond]]
* [[Limited liability company]]
* [[Catastrophe bond]]
* [[Management accounting]]
* [[Clean price]]
* [[Management efficiency ratio]]
* [[Climate bond]]
* [[Primary statements]]
* [[Collateralised Mortgage Obligation]]
* [[Private company]]
* [[Convertible bonds]]
* [[Small and Medium-sized Enterprises]]
* [[Corporate bond]]
* [[Stakeholder]]
* [[Cost of debt]]
* [[Stewardship]]
* [[Counter-indemnity]]
* [[Useful financial information]]
* [[Coupon]]
* [[Coupon bond]]
* [[Covered bond]]
* [[Credit rating]]
* [[Credit rating agency]]
* [[Credit support]]
* [[Customs bond]]
* [[Debenture]]
* [[Depositary]]
* [[Dim sum bond]]
* [[Documentation]]
* [[Domestic bond]]
* [[Dirty price]]
* [[Drop-lock bond]]
* [[Dual currency bond]]
* [[ESG bond]]
* [[Eurobond]]
* [[Exchangeable bond]]
* [[Floating rate note]]
* [[Foreign bond]]
* [[Gilts]]
* [[Global bond]]
* [[Government paper]]
* [[Green bond]]
* [[Greenium]]
* [[Guarantee]]
* [[High-yield bond]]
* [[Indemnity]]
* [[Indenture]]
* [[Index linked bond]]
* [[Interest determination date]]
* [[Internal rate of return]]
* [[International bond]]
* [[Investment-grade bond]]
* [[Irredeemable bond]]
* [[Jumbo]]
* [[Junk bond]]
* [[Loan]]
* [[Longer term]]
* [[My word is my bond]]
* [[Nature performance bond]]  (NPB)
* [[Obligation]]
* [[On-demand bond]]
* [[Panda bond]]
* [[Paper]]
* [[Par bond]]
* [[Par yield]]
* [[Paying agent]]
* [[Performance bond]]
* [[Performance guarantee]]
* [[Perpetual bond]]
* [[Premium]]
* [[Principal]]
* [[Private bond]]
* [[Redeemable bond]]
* [[Retail bond]]
* [[Retained bonds]]
* [[Retention bond]]
* [[Samurai bond]]
* [[Secured]]
* [[Securitisation ]]
* [[Securitise]]
* [[Security]]
* [[Shallow discount bond]]
* [[Share]]
* [[Short term]]
* [[Social bond]]
* [[Social impact bond]]
* [[Social inclusion bond]]
* [[Standby letter of credit]]
* [[Straight bond]]
* [[Stock]]
* [[Stock exchange]]
* [[Sukuk]]
* [[Supranational bond]]
* [[Surety bond]]
* [[Sustainability bond]]
* [[Thematic bond]]
* [[Trustee]]
* [[Use of proceeds bond]]
* [[Yankee bond]]
* [[Yield]]
* [[Yield to maturity]]
* [[Zero coupon bond]]


[[Category:The_business_context]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:Long_term_funding]]
[[Category:Compliance_and_audit]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Treasury_operations_infrastructure]]

Revision as of 15:04, 31 December 2020

1.

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.


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.


2.

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


Financial reporting is also known as financial accounting.


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.


See also

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