Financial Reporting HSBC Bank Essay

HSBC affirm is a branch of HSBC Holdings plc and has its headquarters based in London. The entrust provides a wide range of monetary products and services to individuals, governments, non-governmental organizations and companies. It provides banking products and services in the domestic as well as the international market (Gianaris, 2001). HSBC group of banks is one of the organizations of its kind that offers the largest banking and financial services exclusively told over the world. The order has 8,500 offices in 86 countries and territories in Europe, Hong Kong, Asia, Middle East, North America and Latin America.The order has been listed in the stock exchange markets of London, Hong Kong, New York, Paris, and Bermuda (Jao, 2001). The company has about 220,000 sh areholders in 119 countries and territories. The company provides a wide range of products to its over one hundred million customers. The company has four categories of customer groups and businesses Personal pecu niary Services, Commercial Banking, Global Banking and Markets and private Banking (Gardener & Versluijs, 2001). fiscal reporting is the process of compiling the formal records of the financial activities of an organization or an individual.It involves preparing the financial statements of a company. The organization aims at finding out its financial position in the sententious run or in the long run period. The HSBC bank prepares its financial reports according to the princip all toldy accepted accounting principles of Canada (Mcmenamin, 1999). Financial Reporting History The company prepares financial reports annually, cheat-annually and quarterly. The company files interim reports after e very(prenominal) three or six months, that is, semi annual and quarterly financial reports.These reports reveal the financial performance of the company for the stipulated period of snip (Das, 2004). The companies linked with HSBC bank are required to prepare semi-annual reports. On the othe r hand, quarterly reports are not compulsory for all countries. Regulations regarding the format of interim reports differ in each country. The interim reports may be short or long depending with the country. The date for filing the interim reports overly vary with the antithetical countries (Pietrobelli, Ffrench-Davis, Zamagni, & Ocampo, 2000).The history of preparing interim reports by the bank can be traced rearward to the mid-year of 2002. The quarterly reports started being in operation with the first quarter of year 2003. The financial reports are essential to the researchers and that is why the company requires adequate filing of all financial statements of the bank (Mcmenamin, 1999). The company maintains timely preparation of its financial reports. It uses web crawler technology to track and update the financial records. The formation of preparing financial reports is very functional since it uses PDF format.This computer program allows the documents to be searched easi ly and can be copied into other documents more easily. The size of the PDF documents allows them to be downloaded more easily. The financial reports are presented in full-color native PDF for ease in reading them. The interim reports are easily obtained through the Global Reports Library on Research and Markets (Pietrobelli, Ffrench-Davis, Zamagni, & Ocampo, 2000). The accounting policies of the HSBC bank conform to with the International Financial Reporting Standards.The interim consolidated financial statements are prepared according to IAS 34, according to International Accounting Standards Board (IASB) and the European marriage ceremony (EU) (Das, 2004). The bank has aban dod the IAS 32 since March 2009 since this standard required the bank to offer its shareholders rights so that they could be identified as derivative financial liability. This was make to ensure that the reports presented position of the bank as being true and reasonable, also, to ensure that the reports gi ve a true and fair view of the assets, liabilities, financial position and utility or loss of the company (Jao, 2001).The International Financial Reporting Standards (IFRSs) endorsed by the IASB may differ with those endorsed by the EU. But recently there have been no amendments on the standards endorsed by IFRS and those endorsed by the EU. The IFRSs make up the standards provided by IASB and the interpretations provided by International Financial Reporting Interpretations Committee (IFRIC). The interim consolidated financial statements moldiness include comparative information. This is a requirement by the IAS 34, UK Disclosure and Transparency Rules and the Hong Kong listing rules (Gianaris, 2001).Estimates and assumptions about the future state of financial affairs are use when preparing financial information. The estimates are prepared from the information available as well as use of judgment of the people preparing them. However, the real results might be different from the e stimates in the future (Pietrobelli, Ffrench-Davis, Zamagni, & Ocampo, 2000). The interim consolidated financial statements of the bank consolidate the financial statements of HSBC Holdings and its subsidiaries. The company adopts the revised and amended standards of IASB and endorsed by the EU.The application of the revised standards is through with(p) as per the acquisition date of the business or after the beginning of the first annual financial period of the year (Pietrobelli, Ffrench-Davis, Zamagni, & Ocampo, 2000). Accounting Policies Interest income and expense- This refers to all financial instruments except for those classified as held for trading or designated at fair value in the income statement using the effective interest method. by dint of the effective interest method, the financial liability is calculated and interest income is allocated over the relevant period (Gianaris, 2001).Non-interest income- This comprises the Net trading income which is composed of all ga ins and losings from changes in the fair value of financial assets and financial liabilities held for trading as well as the related interest income, expense and dividends. Net income from financial instruments designated at fair value and dividend income also comprises the non interest income (Jao, 2001). Segment reporting- The HSBC holdings conduct its businesses in several countries and offer a wide range of consumer products. Segment income and expenses must be transferred accordingly.Gains and losses for each segment must be accounted for separately so as to achieve the profitability of each (Das, 2004). Determination of fair value. Fair value of financial liabilities is determined using the quoted market prices where available or using valuation techniques. The fair values include assessment of market participant concerning the appropriate accredit spread to apply to the liabilities of the company (Gianaris, 2001). Loans and advances to banks and customers- These include loan s and advances initiated by HSBC which are not grouped as either held for trading or designated at fair value.Loans and advances are recognized when cash is advanced to borrowers (Gardener, & Versluijs, 2001). Impairment of loans and advances. Losses for impaired loans are recognized when there is objective evidence that the loans have been impaired. Impaired loans are record as charges to the income statement. Losses expected from future events are not recognized (Jao, 2001). Corporate Governance Analysis The bank has established commitments to maintain high standards of incarnate governance. Over the last financial year, the bank has maintained compliance with the Combined Code on Corporate Governance released by the Financial Reporting Council.It has also complied with the Code on Corporate Governance Practices in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (Pietrobelli, Ffrench-Davis, Zamagni, & Ocampo, 2000). The mana gement of HSBC bank has appointed several committees to deal with several corporate activities of the bank. The board committees consist of directors, group managing directors and co-opted non-director members. The principal committees are Group Management Board, Group Audit Committee, lucre Committee, Nomination Committee and Corporate Sustainability Committee (Das, 2004).The directors have the duty to conduct internal attend within the bank. They also review how effective the internal control system is operating. Controls have been designed to safeguard assets from unauthorized use and disposal. These controls ensure that proper financial accounts are maintained and that the financial information contained in the records is reliable. The system of internal control is designed to prevent frauds, errors, material misstatement or losses in the business.The system also ensures compliance with rules set up by the Financial Services Authority, which is the body which regulates the act ivities of HSBC (Jao, 2001). There are corporate policies to safeguard the bank against operational and Reputational risks. The bank has set up procedures to ensure that the risks are minimized. These risks are concerned with the issues relating to the environment, social and governance activities. The bank follows guidelines provided by the Association of British insurers concerning the best response to the issues affecting the company and its stakeholders (Das, 2004).The company aims at managing the risks associated with the health and safety standards of its operations. The bank is responsible to get rid of risks concerning fire, injury and accidents that may affect its workers and visitors. Group Corporate Real Estate sets up the rules concerning health and safety of the company. The implementation of these policies is done by Health, Safety and Fire Coordinators who are located in every country the bank operates. The bank has remained prepared to protecting its employees from terrorists.There are auspices review functions which have been set up to assist manage health and safety of the staff, assets and buildings of the company (Gianaris, 2001). The bank maintains a steady-going communication network with its stakeholders. item-by-item and institutional customers are regularly informed about the operations of the bank. Timely response to the customer needs is given a priority to ensure good relationship is maintained. Annual general meetings are held to ensure that all stakeholders are informed of all activities of the bank over a given period of time (Gardener, & Versluijs, 2001).Conclusion The general organization of HSBC company stands no doubt that it will remain successful in the future. The corporate governance ensures that the mission and vision of the company are achieved. The accounting policies of the bank are in compliance with the international standards. The accounting policies ensure that the accounting procedures are carried out in a p rofessed(prenominal) manner. The company has performed well in the market and if it continues with these strategies it will achieve much. References Mcmenamin, J, 1999, Financial Management An Introduction.Routledge. London. Pietrobelli, C, Ffrench-Davis, R, Zamagni, S, & Ocampo, J, A, 2000, Financial Globalization and the Emerging Economies, United Nations. Santiago. Jao, C, Y, 2001, The Asian Financial Crisis and the trial by ordeal of Hong Kong. Quorum Books. Westport, CT. Das, D, K. 2004, Financial Globalization and the Emerging Market Economies. Routledge. New York. Gianaris, N, V, 2001, Globalization A Financial Approach. Praeger Publishers. Westport, CT. Gardener, E, P, M, & Versluijs, P, C, 2001, Bank Strategies and Challenges in the New Europe. Palgrave. New York.