FINANCIAL REPORTING REPORT Essay Example | Topics and Well Written Essays - 1000 words

FINANCIAL REPORTING REPORT - Essay Example The year under review for this assignment is 2005. During the year 2005, Tesco has been able to generate a revenue target of 37.070 Billion pounds.(www.tescocorporate.com). The reason that we have chosen such a high turnover company is the fact that because of its size and significance in the UK economy, we believe its accounting policies and practices will reflect it therefore we have chosen this. Accounting standards require that they should be consistently applied and practiced. (Deliotte, 2008). Accounting Policies adapted by Tesco are according to the both international and national standards of accounting prevalent at the time. Tesco has prepared its accounting statements on Historical cost convention however there are some changes with respect to the Transitional disclosure requirements under FRS 17. Revenue recognitiation policy is as per the standards and whereas the stocks are valued at lowers of the cost or net realizable value. Fixed assets are recognized at the cost with depreciation being recorded at the straight line basis with clear segmentation of depreciation rates. Goodwill is amortized and capitalized according to the prevalent standards whereas fixed assets and goodwill are also under review for impairment under FRS 11. Segment reporting is one of the important accounting information for the investors especially within the context of international businesses. The increasing trends of businesses to have segments working all over the world and even within the country require that the information shall be contained in the financial statements according to the prevalent accounting standards. The value the segmental reporting carries to the shareholders is very important because it provide investors the necessary look into the performance of the various segments of the company. Since the company is a collection of various departments and segments and a synergic coherence of these segments creates success for the