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business since financial reports are highly aggregated. This means several information is combined together and presented in a very few figures which often users struggle to find their correct path. In addition, Standards are basically general purpose which ignores to identify the difference between large and small entities. (Elliot Barry, Elliott Jamie. 2008)

Adverse allocative effects: this can occur if economic consequences as a result of standard regulation are not taken into account by standard setters. For example, preparing such reports in accordance with standard may cost companies higher than their normal reporting system. Now this can affect the company profitability which can be regarded as an adverse effect. (Elliott Barry, Elliott Jamie. 2008)

Backward-Looking: Users are interested in future and certainties however, financial reports are based on past events and provide information which has already affected the company.

Non-Financial information: financial statements do not take into account non-financial factors. This factors could highly affect a company performance. Such as: Business risk and opportunities, Management policies, company performance and prospects analysis, and description of the business major operation.

Other information: basically some companies provide additional information along with its financial report. This additional information is not always relevant to most users is most of the cases. And this could further affect objective and comparability of financial reports.

现金流折现法及它在投资决策中的重要性（任务2）-Discounted Cash flow and its importance in investment decisions (TASK 2)

Companies need to invest in projects in order to expand their business activities and become leader in the market by increasing their market share. Since there are various techniques which are used to analyze an investment decisions, Discounted Cash flow (DCF) techniques are much preferred by the companies while making investment decisions. In other word, DCF analysis is a capital budgeting practice which is used to analyze and quantify the receipt and payment of a particular project or business venture. DCF methods are given preference in investment decisions because it takes in the account the importance of time value of money and amount of risk involved in acceptance of a project.

Time Value of Money: The concept of Time value of money is based on the fact that a pound received today has higher value than a pound received next day. Even a child prefers todaya€™s enjoyment than waiting for tomorrow.

According to Ramagopal, C. (Financial Management. 2008) there are several factors which support the concept that Money has time value.

Risk and Uncertainity: there is risk and uncertainities always involved in future. Out flows are in a company control but there are is no any gurantee for future cash inflow. Thus a pound today is regarded to have higher value than a pound in future.

Present Need are more important: businesses generally prefer current expenditure and consumption.

Opportunity to invest: an individual or a business can invest money today so that they could gain benefit of Interest or profit as a result of their investment.

Inflation: Inflation in an economy will decrease the money purchasing power. Most government have structural inflation whic