Understanding Financial Report

Transp arncy vs Compliance Today in annual reports thither is a wide communication gap between divine revelation and compliance. In many respects it is a troubling enter because it mixes pecuniary results with public relations schooling. Even with the introduction of naked as a jaybird more sophisticated ensamples (IFRS, GAAP) the annual report continues to look the similar as it did before re social class; if anything is different, footnotes became more extensive and extremely skilful than ever before. Therefore it made them more complex and rattling difficult to interpret for private investors. In the caseful of Ladbrokes PLC the footnotes champion 70% of the (130 page) annual report. The problem is that at that place are two types of people who use annual reports. The first is the individual investor for whom it is a struggle to make sense out of the heavy(p) mickle of technical information. The second is the analysts, accountants and regulators, who unders tand complexities of finance. This means that foil in a real sense does not live on in the annual report.

The footnotes are aimed to satisfy the legal form of transparency, not to provide real-world disclosures that the investor would want and need, such as percentage to square up straightforward answers to simple but of the essence(predicate) questions: Is the company a viable long-term investment, and is its capital potentiality improving or declining? (Glen Arnold 2005) Recommendations for improvement Transparency should be delimitate on an expand level. This definition should include the need for c onformity in reportage standards and formats! ; it would ensure that the investors would find the same sections of the annual report in the same collection. A similar wobble is needed in footnotes. The original purpose of footnotes was to provide bide for the summarised numerical information in financial statements. The fact that there is no standard for the sequence or titling of footnotes is troubling blot for investors. Creating a specialised sequence and...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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