Conceptual framework Essay Example | Topics and Well Written Essays - 1500 words

Conceptual framework - Essay Example and as a guide to the enterprise itself. A Financial statement is a management tool of communicating information about the financial position of the company, its performances and changes in financial position. It is presented in income statements, balance sheets and cash flows. Part B. Review the 2008 annual report of British Airways plc and evaluate the relevance, reliability, comparability and understandability of the information to you as a potential investor (use examples to justify your answers) * On the basis of relevance. The information presented in the financial statements is relevant as it is presented in two years, 2007 and 2008. This information can help users of the Financial Statement to evaluate past and present events of the company. On the basis of past events, evidences could be gathered for confirming or correcting past evaluations made. * On the basis of reliability. Financial statements of British Airways have to be audited in accordance with IASB and should comply with the requirements in the financial market audit. A financial statement becomes unreliable when it is purposely done to influence users’ decision such understatement or overstatement of assets, income and liabilities. Disclosures from part of the financial report in claiming estimates in its preparation so that the FS will appear neutral. The study has been limited and could not interpret any understatement or overstatement of assets and liabilities. However, following the trend of the 2 year Balance sheet, changes in asset structure is not very significant to cause an alarm. * On the basis of comparability. The Financial Statement of BA provided sufficient data for comparability over time. This is done on a 2 year comparison of its own yearly performance. This allows users to study trend in performances in all