financial information reporting systems
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Financial Information Reporting Systems
B&F Investment Services Section Breakfast
June 7th 2005
SLA Conference Toronto
Sylvia James-Consultant
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Financial Information Reporting Systems
SYLVIA JAMES
CONSULTANT
Address: “Daymer” Birchen Lane
Haywards Heath,West Sussex,UK
Tel/FAX: 01444 452871
e mail:da-james@11daymer.freeserve.co.uk
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Financial Information Reporting Systems
What do the Standards and Systems mean for the B&F Information Professional ? Understanding company financial data more easily
Why the annual report is so important
Application to all kinds of companies; not just listed
Understanding the company data provided in commercial information services
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Financial Information Reporting Systems
Company Annual Report Information about performance during the previous
year Management view of strategy for the futureOne of the most important communications of listed/public companies
Present an overview of the companyManagement’s discussion of
company’s recent performance company’s plans for the future
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Financial Information Reporting Systems
Annual report Companies create and distribute their
annual reports in order to Report the company’s financial performance for the more recently completed year and compare it with performance in prior yearsFulfil obligations for public financial reporting
StateStock Exchange
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Financial Information Reporting Systems
Annual Report ComponentsChairman’s Statement
“Letter”
Financial SummaryKey ratios, measures
Management StatementAnalysis, Directors report
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Financial Information Reporting Systems
Annual Report ComponentsManagement Statement
All or any combination ofOperations
Breakdowns sales/revenues/exportsBy operational unit
Financial Resources and LiquiditySelected Financial DataCritical Accounting PoliciesCorporate GovernanceRisk Factors
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Financial Information Reporting Systems
Annual Report ComponentsFinancial Statements
Consolidated or notProfit & Loss, Earnings, RevenueBalance Sheet
Statement of Financial PositionOff balance financing issues
Notes to AccountsAuditors Report
OptionalStatement of Changes in Share Owner’s EquityStatement of Cash Flows
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Financial Information Reporting Systems
A C C O U N T IN G -C O U N T R Y G R O U P S
U K /IR E L A N D N O R T H A M E R IC A
JA P A NS O M E A S IA
1 2 C O U N T R IE S
A N G L O -S A X O N
T H A IL A N DIN D O N E S IA
O T H E R A S IA
F R A N C E G E R M A N Y
1 9 C O U N T R IE S2 S u b G rou ps
E U
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Financial Information Reporting Systems
On continental Europe, wherever large companies operate2 dominant systems of accounting thought
principles-based approach rule-based approach
Guide economic decisions
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Financial Information Reporting Systems
A C C O U N T IN G C O N V E N T IO N S -E U R O P E
C O N T IN E N T A L E U R O P E
C O D IF IE D T A X L A W
L E G A L IS T IC
R U L E B A S E D
A N G LOS A X O N
P R E C E D E N TP R A C T IC EA U D IT O R S
T R U E &F A IR V IE W
P R IN C IP LE S B A S E D
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Financial Information Reporting Systems
IFRS in EU From 2005, a European Union (EU) regulation will require listed companies to prepare their consolidated accounts in compliance with International Financial Reporting Standards (IFRS)Regulation 1606/2002/EC7,000 listed companies in the EU
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Financial Information Reporting Systems
IFRS in EU
Harmonisation throughout Europe has not been successful
Barrier to efficient capital markets in Europe
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Financial Information Reporting Systems
IFRS in EU
The European Commission wants all companies to use IFRS
harmonise and increase the quality of information provided by companies
greater transparency of the financial affairs of enterprises
member states have been allowed to extend the scope of the Regulation to cover those enterprises which are not listed on stock markets
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Financial Information Reporting Systems
IFRS in EU
Main responsibility for delivering IFRS to be left to national standard setters
Individual member states will move at different speeds to take their national standards for unlisted companies towards IFRS
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Financial Information Reporting Systems
There are a number of examples of accounts prepared using IAS/IFRS Roche http://www.roche.com/home/investor/inv-finance/inv-reports.htmNovartis http://www.novartis.com/downloads/annual_reports/annualreport_2002.pdfNestle http://www.ir.nestle.com/pdf/English/2002_FinancialStatement.pdf
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Financial Information Reporting Systems
Examples of accounts prepared using IAS/IFRS
Commerzbank http://www.commerzbank.com/aktionaere/konzern/archiv/2002/gb2002/index.htmlRWE http://www.rwe.com/en/investor_relation/annualreports/annualreports.jsp
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