In the current competitive supermarket industry one of the biggest company is Tesco plc. Tesco operates 2318 stores in 12 countries and employs 380,000 people around the world. As for other companies in the market, the main purpose of the business is maximizing profit for its owners. What's more Tesco trying to expand in international market, thus it is possible to find some Tesco supermarkets in continental Europe, in some parts of Asia and in some cities of the United States. As other public companies do, Tesco have to provide annual reports to the public that include the financial statements of the company, such as Statement of financial position, Income Statement, Statement of Cash flow and Statement of Equity changes. The IASB (International Accounting Standards Board) Framework developed set of characteristics that should be taken into account when evaluating the usefulness of these financial statements.
To begin with, the financial reports are not perfect, because the information within the statements made mainly for investors, and there is not much direct information for other stakeholders of the business. However, other users can use assumptions and find useful information through looking at financial information given in annual reports.
The Tesco’s financial statements are classified upon four qualitative characteristics of IASB Framework. They are: understandability, relevance, reliability and comparability.
The Tesco reports provide notes to group financial statements for deeper understanding of financial accounts. To make information understandable is the least achievable aim, because the financial information within the statements includes calculations, terms,...
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