Reviewing the Annual Report of Hutchison Whampoa Limited
Introduction
A Conceptual framework is important to financial reporting. Financial reports provide information that is useful for present and potential equity investors, lenders and other creditors in making decisions in their capacity as capital providers.
Hutchison-Whampoa Limited (HWL) is a global business company with long history. It is important for HWL to prepare the annual report as a basis of linking the conceptual framework in order to provide most useful information to satisfy the users all over the world.
The need for a conceptual framework for financial reporting
Conceptual framework is a coherent and consistent foundation with specific objectives which underpins the development of accounting standards. It provides guidance on identifying the boundaries of financial reporting. A conceptual framework form a theoretical basis for determining which events should be accounted for recognized, how transactions should be measured and how they should be communicated or presented to users.
Accounting standards are written by a group of people. They may have slightly different prospective of view on accounting standards. Conflict and controversial issues may exist between accounting standard. A conceptual framework is used to be a guideline in setting of accounting standards. It can reduce conflict between accounting standards and political interference in the standard setting process.
In addition, future accounting practice problems can be solved by reference to the conceptual framework. It makes sure the consistency with underlines objectives, qualitative characteristics, recognition criteria, measurement, presentation and disclosure.
The purpose of financial reporting is to provide most reliable and useful information for users in decision making. As financial statements prepared in compliance with accounting guidelines and requirement, a conceptual framework can increase financial statement users’ understanding of and confidence in financial
A Conceptual framework is important to financial reporting. Financial reports provide information that is useful for present and potential equity investors, lenders and other creditors in making decisions in their capacity as capital providers.
Hutchison-Whampoa Limited (HWL) is a global business company with long history. It is important for HWL to prepare the annual report as a basis of linking the conceptual framework in order to provide most useful information to satisfy the users all over the world.
The need for a conceptual framework for financial reporting
Conceptual framework is a coherent and consistent foundation with specific objectives which underpins the development of accounting standards. It provides guidance on identifying the boundaries of financial reporting. A conceptual framework form a theoretical basis for determining which events should be accounted for recognized, how transactions should be measured and how they should be communicated or presented to users.
Accounting standards are written by a group of people. They may have slightly different prospective of view on accounting standards. Conflict and controversial issues may exist between accounting standard. A conceptual framework is used to be a guideline in setting of accounting standards. It can reduce conflict between accounting standards and political interference in the standard setting process.
In addition, future accounting practice problems can be solved by reference to the conceptual framework. It makes sure the consistency with underlines objectives, qualitative characteristics, recognition criteria, measurement, presentation and disclosure.
The purpose of financial reporting is to provide most reliable and useful information for users in decision making. As financial statements prepared in compliance with accounting guidelines and requirement, a conceptual framework can increase financial statement users’ understanding of and confidence in financial
Bibliography: 2. Elliott B and Elliott (2011) Financial Accounting and Reporting, 14th edition. FT Prentice Hall. 4. Hong Kong Institute of Certified Public Accountants (2010), Conceptual Framework for Financial Reporting 2010 (October 2010 issued) http://app1.hkicpa.org.hk/hksaebk/HKSA_Members_Handbook_Master/volumeII/framework.pdf 5. International Accounting Standards Board’s (2010), Exposure Draft, The Conceptual Framework for Financial Reporting (March 2010 issued) http://www.ifrs.org/NR/rdonlyres/363A9F3B-D41C-41E7-9715-79715E815BB1/0/EDConceptualFrameworkMar10.pdf