Financial reporting: Damas Company Pvt Ltd

Introduction

In 1978, Mr. Mohamed Salih, the Chairman of the company set up Dimms Pvt. Ltd. in Male’ with his concern spouse, which became one of the most constituted concern names in the state. The spouses of Dimms decided to fade out the company and divide their concern in 2000. Damas Company came into being in the same twelvemonth.

Damas Company is one of the largest concern companies in the Maldives. They offer a broad scope of merchandises and services for families and concerns. The Company serves a wide base of clients across different industries providing to their demands and demands and an spread outing swath of consumers and corporate clients across the state guaranting handiness and entree to merchandises and services that continue to heighten their lives.

Coverage

Fiscal coverage is a manner of recording, analyzing and summarizing fiscal informations. Damas Company and others uses the paperss and records to set together to track and reexamine how much net income their concern is doing or non. The primary intent of this study is to supply relevant and utile information to the proprietors of a company where there is a division between the ownership and control of that company. This occurs chiefly in public limited companies, where portion capital is sold to the populace through a stock market/exchange system.

The diverse and potentially geographically spread stockholders do non acquire involved in the direction of their company. They appoint managers to make this on their behalf. The proprietors receive an one-year statement summarizing the public presentation and place of the company so that they can mensurate and analyze how good their investing has performed during the coverage period.

Without this coverage system investors would be less motivated to portion with their capital as they would hold no manner of supervising how efficaciously the company is being run by the managers.

Relevance

The information must be relevant to the demands of the users, which is the instance when the information influences the economic determinations of users. This may affect describing peculiarly relevant information, or information whose skip or misstatement could act upon the economic determinations of users. For case Damas Company provides productive values and feedback for the users. Predictive value helps users in foretelling or expecting future results. For Example ;

After thebalance sheet day of the month but before the day of the month of issue a company wants to dispose of one of its subordinates and is in concluding phases of making a trade but the result is still unsure. If the company waits they are expected to happen more dependable information but that would be them relevancy. The information would be outdated and no longer really relevant ( Jan, n.d. ) .

Faithful representation

The fiscal information in the fiscal studies should stand for what it purports to stand for. Meaning, it should demo what truly are present and what truly happened, as the instance may be. There are three features of faithful representation: complete, impersonal and free from mistake.

1. Completeness ( equal or full revelation of all necessary information ) .
2. Neutrality ( equity and freedom from prejudice ) .
3. Free from mistake ( no inaccuracies and skips ) .

A machine is leased to Company A for the full continuance of its utile life. Although Company A is non the legal proprietor of the machine, it may be recognized as an plus in its balance sheet since the Company has control over the economic benefits that would be derived from the usage of the plus. This is an application of the accounting construct of substance over legal signifier, where economic substance of a dealing takes precedency over its legal facets ( ‘Faithful Representation utilizing Substance over Form. Explained with Examples’ , n.d. ) .

Comparison

Comparison is the qualitative feature that enables users to place and understand similarities in, and differences among, points. The information must be comparable to the fiscal information presented for other accounting periods, so that users can place tendencies in the public presentation and fiscal place of the coverage entity. For illustration ; net income for the last five old ages of the company. For illustration ;

If a company that retails leather jackets valued its stock list on the footing of FIFO method in the yesteryear, it must go on to make so in the hereafter to continue consistence in the reported stock list balance. A switch from FIFO to LIFO footing of stock list rating may do a displacement in the value of stock list between the accounting periods mostly due to seasonal fluctuations in monetary value ( ‘Comparability of Financial Statements explained with example’ , n.d. ) .

Verifiability

Verifiability helps guarantee users that information dependably represents the economic phenomena it purports to stand for. It means that different knowing and independent perceivers could make consensus that a peculiar word picture is a faithful representation.

Seasonableness

Seasonableness means supplying information to decision-makers in clip to be capable of act uponing their determinations. It should n’t be significantly delayed or else it will be of small or no value.

Comprehensibility

The information must be readily apprehensible to users of the fiscal statements. This means to be apprehensible, information should be presented clearly and briefly, with extra information supplied in the back uping footers as needed to help in elucidation.

Accounting

The accounting rhythm is performed during the accounting period, to analyze, record, sort, sum up, and describe fiscal information. There are eight stairss in accounting rhythm.

1. Happening of minutess. Economic events necessitating acknowledgment harmonizing to the standards are evidenced by beginning paperss. For examples sale or return of a merchandise, the purchase of supplies for concern activities, or any other fiscal activity that involves the exchange of the company’s assets, the constitution or final payment of a debt, or the sedimentation from or pay out of money to the company’s proprietors.
2. Analysis of minutess. Based upon the grounds available, the dealing or event is classified and measured in order to cognize which histories are affected and by how much.
3. Recording of minutess. Upon analysis, the dealing is recorded in a diary, which provides a chronological record of an entity’s activities. The journal entry includes the day of the month, rubrics and Numberss of histories affected, and the specific debit or recognition dollar sums.
4. Posting to ledger histories.  Each sum in the diary is transferred to the appropriate leger history. The full set of histories is known as the general leger.
5. Preparation of test balance. A list of all histories and their balances is prepared to guarantee the truth of the recording and poster procedures by doing certain the amount of debit balances equals the amount of recognition balances.
6. Adjustment of balances. All history balances must be examined prior to readying of fiscal statements, and updated as needed through seting journal entries posted to the leger.
7. Preparation of fiscal statements. You prepare the balance sheet and income statement utilizing the corrected history balances. For illustration balance sheet at the terminal of the twelvemonth 2014.
8. Shutting of impermanent histories. All impermanent history balances are transferred to retained net incomes via shutting entries, go forthing all impermanent history balances at nothing. Closing entries must be journalized and posted to the leger and a post-closing test balance is prepared.

Decision

To reason, I hope this study give you an thought and many information about Damas Company Pvt Ltd and accounting information about Damas Company Pvt Ltd. Furthermore this study contains account about features of accounting information and phases included in information rhythm.

­Mention

1. Bragg, S. ( 2011, April 3 ) . What are the qualitative features of fiscal statements? – Questions & A ; Answers. Retrieved 9 April 2015, from hypertext transfer protocol: //www.accountingtools.com/questions-and-answers/what-are-the-qualitative-characteristics-of-financial-statem.htm
2. Comparison of Financial Statements explained with illustration. ( n.d. ) . Retrieved 9 April 2015, from hypertext transfer protocol: //accounting-simplified.com/financial-accounting/accounting-concepts-and-principles/comparability.html
3. Faithful Representation utilizing Substance over Form. Explained with Examples. ( n.d. ) . Retrieved 9 April 2015, from hypertext transfer protocol: //accounting-simplified.com/financial-accounting/accounting-concepts-and-principles/faithful-representation.html
4. Jan, O. ( n.d. ) . Relevance and Reliability Principle | Definition and Examples. Retrieved 9 April 2015, from hypertext transfer protocol: //accountingexplained.com/financial/principles/relevance-reliability
5. Limited, K. F. ( n.d. ) . The Context and Purpose of Financial Reporting. Retrieved 9 April 2015, from hypertext transfer protocol: //kfknowledgebank.kaplan.co.uk/KFKB/Wiki % 20Pages/The % 20Context % 20and % 20Purpose % 20of % 20Financial % 20Reporting.aspx? mode=none
6. Welcome to Damas Company Pvt. Ltd. ( n.d. ) . Welcome to Damas Company Pvt. Ltd. Retrieved 9 April 2015, from hypertext transfer protocol: //www.damas.com.mv/
7. Media, B. L. ( 2013 ) .FIA Foundations of Financial Accounting FFA ( ACCA F3 ) : Survey Text: Paper F3( First edition March 2011 Third edition September 2013 ) . United Kingdom: BPP Learning Media.