CFA Level 1 Study Notes – Financial Statement and Analysis
Study Session 6 Reading 15 – Introduction to Financial Statement Analysis –LOS 15a: describe the roles of financial reporting and financial statement analysis –LOS 15b: describe the roles of the statement of financial position, statement of comprehensive income, statement of…
Quality of Financial Reports and Earnings
Financial reporting quality relates to the quality of the information that is contained in financial reports, including note disclosures. High-quality reporting provides relevant, decision-useful information, which objectively represents the economic reality of a company’s activities during the reporting period. Further,…
Objectives of Financial Statements
The principles provided by financial reporting standards facilitate the preparation of financial reports which users of financial statements rely on to make informed decisions. The financial reporting framework describes the objectives of financial reporting. Besides, it describes the elements and…
Financial Reporting Standard-setting Bodies and Regulatory Authorities
Standard-setting bodies and regulatory authorities play an integral role in capital market development and supervision. Examples of standard-setting bodies are the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB). The IASB is the standard-setting body…
Global Convergence of Accounting Standards
In recent times, significant progress has been made towards achieving one set of universally accepted financial reporting standards. This movement has however made the challenges related to the convergence of the accounting standards more apparent than ever before. Status of…
International Accounting Standards Board’s Conceptual Framework
The Conceptual Framework for Financial Reporting (2010) provides important information on the concepts which underlie the preparation and presentation of financial statements. This framework is of great benefit to all financial statement users. It has several components that are outlined…
General Requirements for Financial Statements (IFRS)
The required financial statements, as well as the general features, structure, and content of financial statements, are spelt out by International Accounting Standard (IAS) No. 1, Presentation of Financial Statements. General Requirements for Financial Statements IAS No. 1 stipulates that…
Key Concepts of Financial Reporting Standards
A joint IASB-FASB project was begun in October 2004 with the objective of developing a common conceptual framework for financial reporting. The differences between IFRS and US GAAP which affect the conceptual framework and the general financial reporting requirements have…
Characteristics of a Coherent Financial Reporting Framework
For a financial reporting system to be effective, it must be coherent, meaning that all its pieces must fit together based on an underlying logic. There are however certain barriers to creating such a framework and which limit the overall…
Implications for Financial Analysis of Differing Financial Reporting Systems
The recent adoption of IFRS in many countries, especially in the EU, has advanced the objective of achieving global convergence of financial reporting standards. There are, however, still significant differences remaining in global financial reporting, most noticeably between IFRS and…
