Other Flashcards
List 3 advantages of alternative performance measures
- Depreciation and amortisation - May distort figures as accounting estimate
- Removing non recurring items - helps predict future performance
- Excluding gains and losses - removes volatility on FV
Depreciation differs if cost or Reval APM reflects management thought process
What are the 6 capitals included in integrated reporting?
- Financial
- Intellectual
- Social and relationship
- Human
- Manufactured
- Natural
List 6 things included in an integrated report
- organisational overview and external environment under which it operates
- Governance structure
- Business Model
- Risks and operations and how it affects entity’s ability to create value
- Strategy and resource allocation
- Performance and achievement of strategic objectives
- Outlook
- Basis of preparation
What are the 4 steps recommended to be followed in the Practice Statement; making materiality judgements?
- Identify - consider users information needs
- Assess - is information material (qualitative and quantitative)
- Organise - classify and present information clearly and concisely
- Review - assess materiality on an individual and on a collective basis
List 3 items covered under Elements or the Practice Statement; management commentary
- nature of business
- management objectives and strategies for meeting those objectives
- entity’s more significant resources, risks, relationships, results and prospects
- critical performance measures and indicators
List 3 items covered under Principles; management commentary
- forward looking
- provide management view of entity’s performance, position and progress
- supplement and complement FS
List 3 items covered under Presentation; management company
- Clear and straight forward
- focused on matters more important to entity
- consistent with disclosures
What’s a common additional performance measure?
EBITA
List 3 disadvantages of additional performance measures?
- Not consistent year or year
- Not audited
- Non recurring items - highly subjective. Presenting entity in most favourable light
What is the acronym for 6 capitals of integrated reporting?
FISHMN
Biggest criticism of financial statements
Backward looking
Too much information
What is a practice statement?
Recommended approach - have not enforced this.
More principals driven
