Wednesday, May 6, 2020
Corporate Financial Reporting Management
Question: Write a report on discussing the accounting policies of LLoyds Bank Plc (UK)? Answer: Introduction This paper critically evaluates and discusses the financial reporting of the selected company in the context of International Financial Reporting Standards (IFRSs). Moreover, this critically analyzes the selected company current year published financial reports. In this paper, creates an analysis report on the basis of selected companys latest group accounts, financial statements and annual report while considered the IFRSs. This paper analyses financial reports and discusses the issues or problems related faced by the company related to financial reporting. For this paper, selects Lloyds Bank Plc that is the continuous trading on the Financial Times Stock Exchange (FTSX) 100 Index in the past several years (Alexander, Britton Jorissen, 2007). Briefly Description of Lloyds Bank Plc The cause of Lloyds Bank stated in the year 1765, at what time John Taylor (button creator) and Sampson Lloyd (an iron dealer) established a private banking business in Birmingham. Moreover, in recent times, more than 240 years Lloyds Bank helps its customers get to where they want to be in life by delivering expert relationship banking. Lloyds Bank is a monetary services providing group that is listening carefully of commercial as well as retail customers. Lloyds Bank has millions of clientele in UK, and an attendance in almost each group of people. It played major role to help organizations and people, while making a constructive commitment to the groups in where they work (Lloyds Bank plc. 2015). The UK Government took a 43.4% stake in Lloyds Banking Group and it offers 24-hour telephone and web dealing with a record organizations of the retail and business customers. Lloyds Bank operational Headquarters in London with expansive arrangement of branches and ATM in England and Wales. In January 2009, Lloyds Bank gained HBOS plc that is additionally managing an account and insurance agency in the UK by then it called the Lloyds Banking Group. Lloyds Banking Group center business methodology is to drawing in and working with the greater part of their partners (Bellandi, 2012). Accounting Policies of Lloyds Bank Plc This section discussion is based on the Lloyds Bank Plcs united monetary proclamations and the related notes thereto included someplace else in this yearly report. For a discourse of the bookkeeping arrangements utilized as a part of the arrangement of the merged money related proclamations and monetary reports. The planning of money related articulations obliges administration to make evaluations and presumptions that influence sums reported in that. Because of the innate instability included in making evaluations, genuine results reported in future periods may be based upon sums which separate from those evaluations. The bookkeeping philosophies that are respected isolating to the Lloyds Banking Group's outcomes and budgetary position, based upon materiality and enormous judgments and evaluations to the fiscal decrees (Avtgis Rancer, 2010). The united money related explanations of Lloyds Banking Group have been arranged as per International Financial Reporting Standards (IFRS) as received by the European Union (EU). IFRS embodies bookkeeping principles prefixed IFRS issued by the International Accounting Standards Board (IASB) and those prefixed IAS issued by the IASB's antecedent body and also translations issued by the International Financial Reporting Interpretations Committee (IFRIC) and its forerunner body. The EU supported rendition of IAS 39 Financial Instruments: Recognition and Measurement unwinds a percentage of the fence bookkeeping prerequisites; the Group has not exploited this unwinding, and accordingly there is no distinction in application to the Group between IFRS as received by the EU and IFRS as issued by the IASB. The monetary data has been arranged under the recorded expense tradition, as changed by the revaluation of speculation properties, accessible available to be purchased money related resources, exchanging securities and certain other budgetary resources and liabilities at reasonable esteem through benefit or misfortune and all subordinate contracts. The benefits, liabilities and consequences of Group endeavors (counting organized elements) are incorporated in the money related explanations on the premise of records made up to the reporting date. Bunch endeavors incorporate auxiliaries, partners and joint endeavors (West, 2004). Subsidiaries completely combined Backups totally joined from the date on which control is exchanged to the Lloyds Banking Group; they are de-established from the date that control stops. The obtaining system for bookkeeping is utilized to record for business of auxiliaries, partners and joint endeavors blends by the Group. The thought for the obtaining of backups, partners and joint endeavors are the reasonable estimation of the advantages exchanged, the liabilities caused and the value hobbies issued by the Group (Staubus, 2013). Goodwill grows on business mixes, including the securing of collaborators, and on the obtaining of hobbies in joint endeavors and assistants; goodwill relates to the abundance of the expense of a securing over the sensible estimation of the Group's offer of the identifiable resources, liabilities and sudden liabilities procured. Where the sensible estimation of the Group's offer of the identifiable resources, liabilities and startling liabilities of the procured substance is more unmistakable than the expense of securing, the abundance is seen quickly in the pay verbalization. Goodwill is seen as favorable element at expense and is endeavored in any event yearly for disabling (Bellandi, 2012). On the off chance that a hindrance is distinguished the conveying estimation of the goodwill is composed down instantly through the pay proclamation and is not in this manner switched. Goodwill emerging on acquisitions of partners and joint endeavors is incorporated in the Group's interest in joint ventures and partners. At the date of transfer of a backup, the conveying estimation of attributable goodwill is incorporated in the figuring of the benefit or misfortune on transfer with the exception of where it has been composed off straightforwardly to saves previously (Solomon, 2011). Other elusive resources incorporate brands, center store immaterial, bought Mastercard connections; client related intangibles and both inside and remotely produced promoted programming upgrades. Slippery assets which have been made plans to have a restricted profitable life are amortized on a straight line introduce over their evaluated accommodating life. Interest salary and cost are seen in the pay explanation for all energy bearing budgetary instruments using the intense interest framework, except for those requested at sensible regard through advantage or disaster. The compelling interest system is a strategy for ascertaining the amortized expense of a money related resource or risk and of allotting the premium salary or premium cost over the normal existence of the monetary instrument (Carmichael Graham, 2012). The effective premium rate is the rate that exactly refunds the evaluated future cash portions or receipts over the ordinary presence of the fiscal instrument or, when fitting, a shorter period, to the net passing on measure of the budgetary asset or cash related danger. The effective premium rate is figured on starting affirmation of the financial asset or hazard by assessing the future cash streams in the wake of considering all the contractual terms of the instrument however not future credit incidents. The estimation fuses all entireties foreseen that would be paid or got by the Lloyds Group including expected early recovery charges and related disciplines and premiums and discounts that are a vital bit of the general return (Dagwell, Wines Lambert, 2007). Direct incremental exchange expenses identified with the securing, issue or transfer of a budgetary instrument are additionally considered in the count. When a money related resource or a gathering of comparative budgetary resources has been composed down as an aftereffect of a disability misfortune, premium salary is perceived utilizing the rate of premium used to refund the future cash streams with the finished objective of measuring the impedance disaster (Sale, 2005). Short-term employee benefits, for example, compensations, paid nonappearances, execution based money honors and standardized savings expenses are perceived in excess of the era in which the representatives give the related administrations. Lloyds Banking Group works various post-retirement advantage plans for its representatives including both characterized advantage and characterized commitment benefits arranges (Philipp, 2010). A characterized advantage plan is an annuity arrange for that characterizes a measure of benefits advantage that a representative will get on retirement, subject to one or more components, for example, age, years of administration and compensation. A characterized commitment arrangement is a benefits arrangement into which the Lloyds Group pays settled commitments; there is no legitimate or productive commitment to pay further commitments. Lloyds Banking Group works various value settled, offer based pay arranges in admiration of administrations got from sur e of its workers (Sachse, 2006). Quality and Usefulness of the Companys Disclosure On the basis of the above discussion, it can be predicted that Lloyds Banking Group disclosed all its financial information in their financial statements as well as followed the IFRSs regulations during disclosed financial information. Moreover, the excellence and usefulness of the Groups financial reports is because it disclosure all the financial information related to business. Group has disclosed the acquisition of subsidiaries, associates and joint ventures related all financial information that indicates the quality of its financial statements. Moreover, the Group also estimates the assets and liabilities of acquisition of subsidiaries, associates and joint ventures through apply fair value technique (Mourik, 2007). Quality and Usefulness of the Companys Disclosure On the basis of the above discussion, it can be predicted that Lloyds Banking Group disclosed all its financial information in their financial statements as well as followed the IFRSs regulations during disclosed financial information (Avtgis Rancer, 2010). Moreover, the quality and usefulness of the Groups financial reports is because it disclosure all the financial information related to business. Lloyds Banking Group has disclosed the acquisition of subsidiaries, associates and joint ventures related all financial information that indicates the quality of its financial statements. Moreover, the Group also estimates the assets and liabilities of acquisition of subsidiaries, associates and joint ventures through apply fair value technique that also presented the Group followed the IFRSs regulations during disclosed financial information (Monks Lajoux, 2011). Lloyds Banking Group has not impairment loss that indicated the strong financial statements and potentially its capital structure. Moreover, Lloyds Banking Group is recognized Goodwill as an asset at price and is experienced at slightest yearly for injury that indicates the usefulness of the Groups disclosure. In addition, the Group disclosed the short-term and long-term employee benefits in its financial statement while considered the IFRSs regulations. So, it can be concluded that Lloyds Banking Group followed the IASBs Conceptual Framework while disclose their financial information and prepared financial statements (Delaney, Whittington, 2012). References Alexander, D., Britton, A. Jorissen, A. (2007). International Financial Reporting and Analysis. USA: Cengage Learning EMEA. Avtgis, T. Rancer, A.S. (2010). Arguments, Aggression, and Conflict: New Directions in Theory and Research. NY: Routledge. Avtgis, T. Rancer, A.S. (2010). Arguments, Aggression, and Conflict: New Directions in Theory and Research. NY: Routledge. Bellandi, F. (2012). Dual Reporting for Equity and Other Comprehensive Income under IFRSs and U.S. GAAP. USA: John Wiley Sons. Carmichael, D.R. Graham, L. (2012). Accountants' Handbook, Financial Accounting and General Topics (12th ed.). USA: John Wiley Sons. Dagwell, R., Wines, G.L. Lambert, C. (2007). Corporate Accounting in Australia. China: UNSW Press. Delaney, P.R. Whittington, O.R. (2012). Wiley CPA Examination Review, Problems and Solutions (39th ed.). USA: John Wiley Sons. Lloyds Bank plc. (2015). About Lloyds Bank. Retrieved from: https://www.lloydsbank.com/banking-with-us/who-we-are.asp?WT.ac=FAAL1012 Monks, R.A.G. Lajoux, A.R. (2011). Valuation Based on Earnings. USA: John Wiley Sons. Mourik, C.V. (2007). Globalisatie en de Rol Van Financial Accounting Informatie in Japan. USA: Rozenberg Publishers. Philipp, R. (2010). Wiley CPA Exam Review 2011 Update. USA: John Wiley Sons. Sachse, W. (2006). Accounting for leases. Germany: GRIN Verlag. Sale, J.T. (2005). Advances in International Accounting, Vol. 18. UK: Elsevier. Solomon, J. (2011). Corporate Governance and Accountability. USA: John Wiley Sons. Staubus, G.J. (2013). The Decision Usefulness Theory of Accounting: A Limited History. NY: Routledge. West, B.P. (2004). Professionalism and Accounting Rules. UK: Psychology Press.
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