Contemporary Issues in Financial Reporting – Assignment Example

Contemporary Issues in Financial Reporting The most important aspect in contemporary reporting on financial matters is the ability to develop critical and well informed decisions. It also requires putting into consideration all possible implications to an investment and its position in today’s competitive and viciously competitive market. More so is due to the fact competition exerts so much pressure on proprietors that the very limited chance of corporate survival almost entirely depends on anticipating change and dynamics and getting it right virtually all the time. Contemporary accounting and reporting policies have been and will in the foreseeable future remain a direct challenge to the traditional principles. Issues such as audit failure, financial crises and troubled banking system, increased market volatility, inequality and other challenges to business such as climate change and increasing moral and ethical responsibility have changed have become the central issues in contemporary accounting and reporting policy determinants. In fact corporate environment commentators predict for the present and into the near future, policies in reporting and accounting are going to be influenced more by certain issues that organizations should start paying specific attention to. These issues that organizations should be paying attention to include investor appeal, market trends and their anticipation, trends and direction in regulation policies, government policies and possible changes to that effect, society and environmental sensitivities. In this respect, your company should take keen interest in these issues if you are to expect positive future prospects and favourable placement with regards to competition. It is also worth noting that even the literature for reporting is expected to be more layman in approach and to take a persuasive approach for the near future and that should be worth incorporation within your organization. This is because there is forecast of a future where corporate organizations are likely to be more dependent on their public and are going to invest more towards client satisfaction besides their primary operation. Your company should also consider for the short time incorporation of institutional and regulatory capacity building and harmonization of corporate sector financial reporting and auditing. You should also critically scrutinize the implication of all financial decisions especially during asset acquisition and other business undertaking. The decision as to whether it is more prudent to buy out rightly or to lease when acquiring business assets and when conducting sale of business products is however case specific with no conventional model for the most business savvy option. It is also dependent on the financial situation and the business climate at the time and in the foreseeable future. As for your situation, you should consider buying the more durable and fundamental assets like premises since they are resalable and have could have appreciating value in a good environment. Leasing actually means you don’t own these premises and you would still have to pay your entire lease period no matter the situation of your business. While this option is much cheaper, it should not be considered in an unstable or falling housing market. On the general ideal terms however, buying the premises is the better option as it is cheaper in the long run and advisable if you have a long term projection for your business. When making similar decisions on business products, it could be prudent to sell completely since technology evolves rather quickly and you risk holding onto obsolete products. It is also worth noting that computers are rather fragile equipment with high maintenance costs that would greatly reduce in value over a fairly short time and therefore not worth the risk. References Rosenfield, Paul. Contemporary Issues in Financial Reporting: A User-Oriented Approach. n.a: Routledge, 2006. Print. Willerton, Dale. "For Sale Or Lease?: Pros and Cons of Buying vs. Leasing Space for Franchise Tenants." Franchising.com. N.p., n.d. Web. 6 Apr. 2014. Grubb and Ellis, Successful Leasing and Selling of Retail Proper. n.a: Kaplan, 1989. Print Basu, Arun and Saha, Malayendu. Studies in Accounting and Finance: Contemporary Issues and Debate. India, 2009. Print Higson, Andrew. Corporate Financial Reporting: Theory and Practice. Great Britain, 2003. Print ss .