Financial Reporting

Financial Reporting

Southern New Hampshire University


Operating segments

The requirement to report the information about each operating segment separately will be met by following the sub-sector classification, which in this sense is the central government, local government, and public corporations. Parts of entities classified in the National Accounts to a different sector from the classification of the main part of the entity should, as well, be classified as the central part of the entity. On the other hand, the requirement to report profit and loss information for each reportable segment will be met by reporting taxation revenues, operating expenditure, other operating income, operating surplus, surplus (or deficit) on the disposal of fixed assets, interest receivable and similar income, interest payable and similar charges and the surplus or deficit for the year within the reportable segments. Starbucks will be cited as the reference entity in the report.

Investment Properties

In a financial report, all investment property should be accounted for under the fair value model – that is, the option is given to adopting the cost model has been withdrawn.  IAS 40 applies in full to all reporting entities covered by the report to hold properties only for the purpose of earning rentals or for capital appreciation or both. In considering how best to apply the valuation requirements and in ensuring a genuine and fair view of the value of the assets the Statement of Financial Position gives on the report, it should take into account the following guidance on property and non-property assets (Chen and Blöcher, 2008).

Looking at Starbucks, the company has 8,850 company-operated stores that gives them over $9.9 billion of income (REFERENCE). The firm has as well improved their Comparable-store sales by 8% over the last quarter of the fiscal year (REFERENCE). The company’s top-line momentum has been coupled with aggressive cost-cutting effects over the same period.



The financial reports should set out the entity’s rules for acquiring, managing, preserving and disposing of heritage assets. This should include a description of the records maintained by the entity of its collection of inherited assets and information on the point to which access to the property is allowed. Information required by this report may alternatively be provided in a document that is cross-referenced from the financial statements (Bragg, 2001).

Taking on Starbucks, they maintain disclosure controls and procedures that ensure information about their assets is recorded. This incorporates the information recorded in their periodic reports that are done after marked time periods.

The Performance Report

The purpose of the performance section of the annual report is to provide information on the entity, its main objectives and strategies and the principal risks that it faces. The requirements of the performance report are based on the matters required to be dealt with in a Strategic Report (Chen and Blöcher, 2008). The performance report must provide a fair, balanced and understandable analysis of the entity’s performance, the annual report and accounts as a whole to be fair, balanced and reasonable (Casabas, 2016).

Starbucks’ budgetary outcomes highlighted by staggering increments all over the world, and in the U.S., exhibit the quality and significance of the Starbucks brand the world over. Their outcomes underscore the accomplishment of the ventures they keep on making in their business, in sustenance advancement and in momentous innovation development that is extending their association with clients all around. Starbucks execution mirrored a continuation of the pattern accelerating momentum with each progressive quarter of the monetary year.


A lease is an agreement between two parties; the lessor and the lease, where the lessor agrees to the lessee in return for payment or continued payments for the right to use a property for an agreed period. The capitalization of finance leases effectively means that all such transactions will affect the lessee’s gearing, return on assets and return on investment. Consequently, IAS 17 substantially alters some of the key accounting ratios which are used to analyze a set of financial statements. For the rental fee covering the building and the occupant will have to explain $480,725 asset at first which will be decreased about ten years of the rent in agreement with the usual policy of depreciating buildings which are going to last ten years. At the same time a liability representing an obligation to the legal owner of the buildings (the lessor) for the same amount will be created (Bragg, 2001). As rent payments are made the interesting part will be taken as a cost and the remaining balance will be used to decrease the liability.

Starbucks leases retail locations, dispersion, roasting, distribution centers and office space for corporate authoritative purposes under working leases. Most leases contain inhabitant change remittances, lease premiums, lease occasions, potentially unexpected lease arrangements or lease acceleration statements. Starbucks perceives amortization of lease incentives, premiums and the least rent costs on a straight-line premise starting on the date of initial ownership, which is when Starbucks enters the space and starts to make enhancements in planning for proposed utilization.


Blöcher, E., Chen, K. H., & Lin, T. W. (2008). Financial reporting: A strategic emphasis. McGraw-Hill/Irwin.

Bragg, W. W. (2001). Performance reporting strategies. Business Intelligence Journal.

Casabas, K.K., (2016). The rules of accounting and financial reporting.