Explain the context and purpose of financial reporting and the qualitative characteristics of financial information including the interpretation of financial statements
Prepare basic financial statements for incorporated and unincorporated entities; and prepare simple consolidated financial statements
OVERVIEW
This assignment will encourage the students to apply the financial accounting knowledge and skills from the module to accounting and finance-related business issues and will be submitted in form of an accounting report.
DESCRIPTION OF THE TASK – WHAT YOU ARE BEING ASKED TO DO?
The submission of a written report that discusses accounting and finance-related business issues using a wide variety of research materials (2,000 words).
Accounting report (2,000 words) – 50%
You are an Assistant Financial Accountant at Sun plc which is listed in the London stock market. Sun plc is currently doing training programs to its newly recruited accounting apprentices. As a part of the preparation for the training programme the Training Manager requested you to prepare a report covering the following tasks.
The first part of the report should consist of a detailed explanation on the following areas.
a) Definition and importance of financial reporting
b) Components of financial statements
c) Qualitative characteristics of financial information
d) Interpretation of financial statements by using financial ratios
Task 02
Prepare the consolidated financial statements for Sun plc and its subsidiary, Venus plc for the year ended 31 March 2023 in accordance with International Financial Reporting Standards.
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Statements of financial position at 31 March 2023
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Sun plc
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Venus plc
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ASSETS
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£
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£
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Non-current assets
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Freehold land and buildings
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495,240
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150,480
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Plant and machinery
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420,420
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331,080
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Investments in Venus plc
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216,300
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1,131,960
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481,560
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Current assets
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Inventories
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324,720
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93,360
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Trade receivables
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147,360
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67,080
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Cash at bank
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111,180
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27,000
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Total assets
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1,715,220
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669,000
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EQUITY AND LIABILITIES
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Equity
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Ordinary £1 shares
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480,000
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180,000
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Share premium
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186,000
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Retained earnings
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309,900
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90,900
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975,900
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270,900
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Non-current liabilities
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Bank loan
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75,000
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Current liabilities
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Trade payables
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135,120
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96,720
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Interest payables
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7,500
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Other liabilities
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604,200
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218,880
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Total equity and liabilities
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1,715,220
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669,000
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Tips for report structure
- Introduction (130 words)
An introduction to the report with the areas covered in and the structure of the report (150 words).
- Main body (1600 words) – Task 01
a) An explanation on financial reporting, and the importance of financial reporting to various stakeholders such as investors, creditors, and regulators? (500 words)
b) Components of financial statements and the purposes of those statements (250 words)
c) Qualitative characteristics of financial information, and their impacts on the usefulness of financial statements? (450 words)
d) Usage of financial ratios in interpreting and analysing the financial statements and the insights they provide into a company`s financial health and prospects for growth? (400 words)
- Main body (140 words) – Task 02
Consolidated income statement and consolidated statement of financial position
- Conclusion (130 words)
Note: The word counts are provided to give a rough idea of the structure. You may change the word count.
