Financial Reporting Essay Example | Topics and Well Written Essays - 2500 words - 2

Financial Reporting - Essay ExampleHere the items are specific and these are compared over a specific accounting period. This manner can further be classified into two sub categories, namely absolute dollar and percentage comparison (Edmund, et.al., 2006).b) Vertical Analysis The vertical analytic thinking on the other hand is when the analysts use separate figures to one specific figure of a financial report. This comparison is generally performed in percentages. Here contrary the horizontal analysis, the analyst use one certain item and compare several different items with it, in the same accounting period. This is generally used to acquire enough data to build a trend. This method is also divided into two main styles, income statement analysis and balance sheet analysis (Edmund, et.al., 2006). account reports in annual reports are a very useful tool. These often cover a number of different aspects of the annual report. The narrative reports have been fetching up higher portio ns of the annual reports. It has been noted by Deloitte research that these take up as much as 54% of the total annual reports (Reed, 2008). The division of the narrative reports is very clear, it is mainly present in the annual reports to provide the readers with a clear knowledge of the history of the fellowship, a brief analysis of the changes do in the year, future plans of the company and also the illustrations and photographs that are relevant. This forms a source of information for the readers and to some extent can be considered to be a monologue. The office staff is to provide for a complete overview of the company. In terms of the analysing the financial statements, these reports provide the analysers with straight forward information. It includes a five to ten years of financial abridgment which proves to be very beneficial especially if the analyser aims at gaining comparative information over a few years of historical data of the company (Bear,