Marks and Spencer Financial Statements Coursework

Marks and Spencer Financial Statements - Coursework Example Many of the private companies in the UK use International Financial Reporting Standards (IFRS) conceptual framework for financial reporting (Holland, 1998) and address issues regarding fair value accounting in terms of the 8 phases, out of which four are active: the objective and qualitative characteristics, elements and recognition, measurement, and reporting entity. The conceptual framework itself provides guidance on which measurement bases to be used or outcomes to be obtained through the measurements decisions. The measurements of the different segments are aimed at fair value to meet the qualitative characteristics of the framework. As IFRS includes fair value measurements required by the United Kingdom Generally Accepted Accounting Principles (UK GAAP) (Ballard, 2010, p 704), it is obvious that the different identifiable components (Connolly, 2012) like pension and other associated costs and liabilities of M&S are according to fair value measurement that meets the qualitative characteristics of the framework (Ballard, 2010, p 703). Also, according to the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB), the objective of fair value measurement is â€Å"to provide guidance for selecting measurement bases that satisfy the objectives and qualitative characteristics of financial reporting† (FASB, 2009b, p2; Ballard, 2010, p 703). The qualitative characteristics aid financial reporting in the selection of a measurement method which the company has attained through identifying its employees as their valuable asset and also having certain policies and schemes like the pension scheme and work, health and safety schemes as part of its sustainability drive (M&S How We Do Business, 2011). Further, identifiable segments are reportable or operating segments of the company that have reported revenue of more than 10% of the combined revenue of both internal and external revenue of all other segments. Also, if the profit or loss of a particular segment, like employee remuneration or employee benefits, including pension benefits, is greater than profit or loss of all operating segments combined or the assets are worth more than 10% of all combined operating segment assets, then the segment is said to be reportable (Connolly, 2012, p2). This means that M&S has the option of not including the employee remuneration benefits or pension liabilities and costs in the financial report. Measurement is defined in the IASB’s framework as â€Å"the process of determining the monetary amounts at which the elements of financial statements are to be recognized and carried in the balance sheet and income statement† (IASB, 2001, p 99; Ballard, 2010, p 706). M&S has recognized the measurements relating to employee remuneration, costs, and benefits in its financial statement in 2011 (Appendix 1 & 2). Many of the financial reporting institutes have recognized that there exists ambiguity in standard s attained in financial reporting. There are limitations in financial reporting and public information disclosure as it is common practice with companies to practice mandatory and voluntary public and private disclosure of information that is targeted at specific stakeholders of the business (Holland, 1998).