Contributions Masini To Accounting Theories-Myassignmenthelp.Com

Question: Discuss About The Contributions Masini To Accounting Theories? Answer: Introduction Amazon is a cloud computing company that is based in Seattle, United States and is the largest online retailer in the world. It incorporates the principle of general-purpose financial reporting while preparing their financial reports. Values of figures reported in the assets and liabilities and several other areas of financial statements that are based on the estimates and assumptions of principles. In the present situation, investors of Amazon are facing with dilemma as despite the bullish performance of organization. Investors are bullish on long-term performance and they are scared to trade in short-term aspects and such behaviours of investors are explained by the application of mental short cut concepts that is heuristics. The outperformance of share price of Amazon is driven by higher level of operating cash flow and increasing revenue. Moreover, Amazon does not have any particular accounting principle and they keep amending the accounting system for complying with the updated standard. There are several possible objectives for general purpose financial reporting. Explain what these objectives might be, and which one you think best applies to Amazons financial reporting (based on the information in the case study). Make sure that you fully explain your answer. A general-purpose financial statement is a means for communicating reliable and relevant information to users about a reporting entity. Reporting entities are enabled to discharge their accountability by providing mechanisms to their governing bodies and management. It helps in discharging the responsibilities of reporting entities by inflecting both at micro and at macro-economic level. Another objective of general purpose financial reporting is to serve the needs of stakeholders of reporting entities such as lenders, potential investors, creditors with relevant financial information that would assist them in decision making (Andrei and Corbella 2017). It provides platform for assessing prospects of entities for their future net cash flow and whether the governing bodies and management are effectively and efficiently managed. General purpose financial reporting is directed primarily catered to investors, lenders, creditors and their objective is to provide relevant financial information. Financial information about reporting entities such as any claim against them and any economic resources are provided through such reporting standards. Effect in the transaction and any effect of change in claims and economic resources of entities are provided. Useful input are provided through such information that assist investors in decision-making. From the given case study on Amazon, it was observed that although online retail giant experienced a jump in sales value, they do not have increasing gross margin, rather they are experienced with shattered and declining gross margin. Despite falling gross margin, stock of organization has been sustained by rapid growth in revenue and optimism on long-term profit margin. From the analysis of case study, it can be said that the applicable objective as per general purpose reporting entities are related to their financial performance. There needs to be adoption of several measures for displaying the performance of entity. They are required to make distinction between items of expenses and income that have differing degrees of inclusiveness. This can be explained with the help of an example, gross margin and profit and loss arising ordinary activities after taxation and before taxation and loss or profit. In case of Amazon also the main objective of the company is to provide proper information to the users through their financial statements so that they can take proper decision with regard to the company and its various policies. The company is considering making new investments and it is important that the companies must make proper disclosure about the same in their annual reports. The company must follow all the accounting standards and accounting policies that would help them making all the disclosures accurately and very precisely (Kew and Stredwick 2017). It is seen that on the basis of the same the company needs to follow the standard rules and regulations for the preparation of their financial statements and it is important to make sure that they are free from all kind of errors. The ongoing pressure of margin of Amazon is affecting investors. Investors seek to get the information about organization whether the favourable cash flow are generated in the process of business and operating profitably (Bonin 2013). This is so because investors decision about expected cash flow is related to investors, business entities and uncertainties. Therefore, Amazon is required to incorporate the general-purpose financial reporting objective of displaying relevant financial information to investors. Financial reports of Amazon should incorporate relevant financial informations and explanatory materials are to be read with the financial statements that are to be communicated to investors of organization. References: Andrei, P. and Corbella, S., 2017. 8 The contributions of Carlo Masini to accounting theories. The History and Tradition of Accounting in Italy, p.158. Bonin, H., 2013. Generational accounting: theory and application. Springer Science Business Media. Kew, J., and Stredwick, J. 2017. 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