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

Financial Reporting - Essay ExampleHere the positions are specific and these are compared oer a specific accounting period. This method piece of tail further be classified into two submarine sandwich categories, namely absolute dollar and percentage comparability (Edmund, et.al., 2006).b) Vertical Analysis The vertical epitome on the other hand is when the analysts use separate figures to one specific figure of a monetary report. This comparison is generally performed in percentages. Here unlike 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 gather overflowing 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).Narrative reports in yearly reports are a very recyclable tool. These often cover a number of different aspects of the annual report. The narrative reports have b een taking up higher portions 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 role 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 company, a brief analysis of the changes made 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 role 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 summary which proves to be very beneficial especially if the analyser aims at gaining comparative information over a some years of historical data of the company (Bear,