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Amit Kumar Sharma, Lovely Professional University Unit 8: Corporate Reporting

Unit 8: Corporate Reporting Notes

CONTENTS
Objectives
Introduction
8.1 Qualitative Characteristics of Financial Reporting Informations
8.2 Users Group and Financial Reporting
8.3 Objectives of Corporate Reporting/Objectives of Financial Information
8.4 Concept of Disclosure in Relation to Publish Accounts
8.5 Disclosure Requirements of Balance Sheet
8.5.1 Statutory Contents of Liabilities side of Balance Sheet
8.5.2 Statutory Contents of Assets Side of Balance Sheet
8.6 Disclosure Requirements Concerning Profit & Loss Accounts
8.7 Report of the Auditors to the Shareholders
8.8 Summary
8.9 Keywords
8.10 Review Questions
8.11 Further Readings

Objectives

After studying this unit, you will be able to:

Identify the disclosure requirements of publish accounts;
Illustrate the preparation of corporate financial statements as per VI Part I of the Indian
Companies Act;
Describe the contents of auditors report.

Introduction

The form of presentation of financial reports of non-corporate business organisations suffers
from non-conformity. Rigid rules and regulations, as to the manner of presenting financial
reports, do not bind the individual businessman in a sole trading or the partners in a firm. They
enjoy a higher degree of individuality, which is reflected in the myriad of forms in which
financial reports are prepared. In fact, there is no legal compulsion for these organisations to
present the financial reports at all. The reports are prepared for the own use of the businessman
and are made available only to select groups, such as lenders of resources and to tax authorities.
Corporates, which are governed by their respective acts, have not been given this latitude. The
reasons are obvious—in corporate ownership is divorced from management. With a view to
ensure that the funds made available by the shareholders (a majority of whom will not have a
say in the day to day management of the business) are properly utilised by the managers, law
has prescribed specific forms in which the financial reports are to be prepared and presented.

8.1 Qualitative Characteristics of Financial Reporting Informations

The qualitative characteristics will provide assistance when choices have to be made between
reporting policies—whether by preparers, auditors, those participating in the standard-setting

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