Corporate Financial Reporting: Changing Scenario

In a globalized economy, the need of the hour for investors is total transparency in disclosure practices. It is expected that corporate financial reporting, a disclosure process through which a business enterprise communicates with third parties, should serve that purpose. It is gaining importance because only through corporate financial reporting would the investors gain genuine knowledge about a company’s performance. In the era of transparency and strict disclosure practices, even the reporting of non-financial items like human capital and intellectual capital are taken as factors of total transparency. Sustainable reporting is also considered a part of Corporate Financial Reporting. Today’s organizations are concerned not only with the issues related to transparency but also with the need of using a single set of reporting standards. It will eventually help the investors make a comparison between the companies and organizations to curtail costs and avoid the complications in reporting. Therefore, it is also opined that data in the financial statements and financial reports must provide as good a picture of the enterprise as possible. An enterprise s performance, responsibility of its owners and its usefulness to its managers must all be evidently presented in its financial reports. It could be said that there has been good progress in the field of convergence of accounting standards. Developments like the treatment of business combinations, the treatment of inventories and various other amendments and adjustments have come up to give the accounting world a brighter future. This book on corporate financial reporting addresses issues like quality in financial reporting, ethics in financial reporting, sustainable financial reporting and the harmonization of accounting standards and its effect on financial reporting. Some financial reporting applications are also discussed here.