IFRS Adoption and Impact in Australia

This assignment delves into the effects of International Financial Reporting Standards (IFRS) implementation in Australia. It examines how IFRS adoption has influenced financial reporting practices, the quality of accounting information produced, and the framework of corporate governance within Australian businesses. The analysis draws upon a range of academic sources and research to provide insights into the complex relationship between IFRS and the Australian business landscape.

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Executive Summary
This report is proposed in order to calculate the annual reports of Activist Limited and Adacel
Technologies Limited Company and their obedience to AASB standards. From this analysis, it
has been observed that both the companies have undoubtedly followed IASB and IFRS for
creating a yearly report. Both the companies have used AASB standards for making a financial
report for the company in the annual report. Companies must follow their country accounting
standard to be more effective in their company’s financial report and disclose all the aspect in
compliance to ASSB. It is very important for the companies to disclose all the details in the final
accounts and activities happen in the organization related to the cash flows. The annual report of
Activistic Limited shows that the company has followed the Australian Accounting Standards
that comprise Australian equivalents to international financial reporting standards (AIFRS).
Obedience with AIFRS makes sure that annual report includes the financial statement, obeys
with (IFRS) International Financial Reporting Standards.
The Adacel Technologies Limited follows the basic accounting principles while making the
company financial report. Company consistently follows the accounting principles every year in
making of annual report. Adacel Technologies Limited prepared their report in accordance with
Australian Accounting Standards and interpretation concerned by the (AASB) Australian
Accounting Standards Board and follows the Corporation act 2001. The combined annual report
of Adacel technologies Limited meet the terms of (IFRS) International Financial Reporting
Standards as rules suggested by the International Accounting Standards Board (IASB).

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Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Estimate the conceptual framework with reference to the chosen company’s annual report..........5
Annual report Adacel Limited and Adacel Technologies Limited..................................................6
Revise conceptual framework in addressing the difference in corporate reporting......................11
Clarification in the Directors Report and in the Notes to Financial Statements............................14
Compare and contrast of the two annual reports, identify the differences in disclosures of these.
.......................................................................................................................................................14
Recommendations:........................................................................................................................16
Conclusion:....................................................................................................................................17
References:....................................................................................................................................18

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Introduction
The fundamental need behind this report is to understand the different standards used by the
listed companies in (ASX) Australian Stock Exchange while making their financial report. Every
listed company follows their own country rules and regulations of accounting standard while
preparing the annual report of the company. Along with this, every listed company in stock
exchange has to follow the terms and conditions of the stock exchange of that country. For
understanding the accounting standards of ASX, the two companies have been chosen Adacel
Technologies Limited and Activistic Limited. The report also complies the information that the
two chosen companies making the financial report in accordance with AASB or not. The report
includes the assessment between the financial reports of the chosen companies. This report is
made to find out the difference between the financial reports of the companies and the reason
behind the differences. The report includes financial notes of the company’s in the director’s
annual report and there is also a comparison between both the company’s annual report and
shows the effectiveness of the annual report

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Estimate the conceptual framework with reference to the chosen company’s annual report
It is necessary for the companies that are listed in stock exchange to follow their accounting
standards in order to prepare the financial reports of the company. In, Australia, AASB has the
main motive to regulate the financial and accounting reporting practices followed by the
companies. The companies tend to follow the accounting standards in order to increase the
transparency in the financial report (Ahmed, et. al., 2012).
Adacel technologies limited and Activistic limited follows the IFRS and IASB just to meet the
regulatory requirements required in the preparation of the financial report. The AASB
(Australian Accounting Standards Board) evolved the standards of accounting that has to follow
by the organization while structuring their financial report. At the beginning stage of IFRS, it
makes availability of the estimated framework of report, which necessitates the loyalty of the
organizations while reporting for the basic annual statements like revenue, expenses, liabilities,
assets and detail of shares. Companies consistently follow the IFRS during their business
functions at the time of purchasing the assets. According to IFRS, the companies are required to
mention the purchase of assets, use of assets and if any earning that has been done through the
sale of assets than it should be clearly mention in the financial report.
Assets are mainly dividing into two parts such as current assets and noncurrent assets. The
differences between both the assets are, currents assets are the inventories, cash, and market
securities and cash equivalents whereas noncurrent assets are those assets that have the life of
more than one year for the company these assets are property or plant and machinery (Ahmed, et.
al., 2012). The (AASB) Australian Accounting Standard Boards says that, there must be a proper
record of assets in the balance sheet. Cash flow statement also shows the sale and purchase of
assets because in cash flow statement companies records the source of cash income and records

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the reason that can be held liable for cash outwards from the company. For the effective financial
report, company should record all of these assets by fulfilling the requirements of AASB and the
ethics laid down by the IFRS. Activistic limited and Adacel technologies limited accumulate the
AASB and IFRS in order to identify the liabilities and assets in the annual report. The worth of
assets and liabilities are revealed in the balance sheet of both the companies in their annual
financial reports. While making the financial report by the companies, both the companies have
identified the requirements and policies of the IASB and AASB. It shows that the selected
companies have followed the accounting standard of AASB and IASB in making financial
report.
Annual report Adacel Limited and Adacel Technologies Limited
After analyzing the annual report of both the companies. It shows that the annual report of the
companies has made under the procedure of AASB. For confirmation, the screenshot of balance
sheet and income statement of Activistic limited and Adacel Technologies limited are attached
below.

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Income Statements of Activistic Limited
Following snapshot provides the income statement of Activistic Limited for the accounting
period of 2015-16:

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Balance sheet of the Activistic Limited
The snapshot of balance sheet of Activistic Limited for accounting period of 2015-16 is as
below:

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Income Statement of Adacel Technologies Limited
The snapshot showing the statement of profit and loss for Adacel Technologies Limited for
accounting period 2015-16 is as below:
(Source: Adacel Technologies Limited 2016)

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Balance Sheet of Adacel Technologies Limited
The following snapshot provides the balance sheet Adacel Technologies Limited for accounting
year of 2015-16:
(Source: Adacel Technologies Limited 2016)

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(ASSB) Australian Accounting Standards Board plays an essential role in financial reporting of
the company to identify the accounting principles. The main aim of accounting standards is to
provide full and relevant financial information to creditors, investors, shareholders, bank
institution and key stakeholders. Accounting standards provides the guidelines to the company
for preparing the financial statements and its company responsibility to follow all the procedure
of accounting standards (Cheong, et. al., 2010).
The Australian Accounting Standards Board is developed to maintain the financial reporting
standards relevant to the public or private entities, which does affect on the Australian economy.
The Australian Accounting Standards Board is an autonomous bookkeeping standard setter
based in Melbourne, Australia. It includes 11 Board members with the chair. The minister selects
the chair for Superannuation and Corporate law and members. The AASB is focused to
increasing, in the public awareness a set of high quality, and easily understandable accounting
standards that necessitate clear and equivalent information in general principle monetary
statements. It helps in contributing to the expansion of worldwide financial reporting standards
and makes easy the involvement of the Australian economy in worldwide standard setting. The
power and functions of AASB are meant in the Australian securities and Investment Commission
Act 2001. The Australian Accounting standards Board is an Australian Government Agency
(Cheong, et. al., 2010).
Revise conceptual framework in addressing the difference in corporate reporting
The aim of IFRS is to provide worldwide structure for how private and public companies
disclose their financial statements. International Financial Reporting Standards (IFRS), it is a set
of accounting standards developed by a self-governing. Not for profit, organizations known as
International Accounting Standards Board.

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In December 2013, the Australian Accounting standards Board did modification in their
framework for the betterment of appearance and preparation of the monetary statements, which
is integrated in the chapter 1 to 3 of the IASB conceptual framework for financial reporting
which published in September 2010. According to conceptual structure of chapter 3 and chapter
1 are rectify in the International Accounting Standards Board that are mandatory in the
framework of IASB, instead of altering the complete framework chapter 1 and chapter 3 are
allowing for framework of afterthought in IASB (Pike, et. al., 2015). The revelation summary
contains the IASB that offers the modification in the conceptual framework that are planned to
raise the quality of annual report of the company by providing clear and complete instructions
along with this a set of revised theories.
The International accounting standards foundation was integrated as a tax excused organization
in the U.S. state of Delaware. There are 13 full time Board members and each one of them had
one vote. It is part of three-tier structure employed by the IFRS.
Role of IASB
The IASB has entire responsibility for all mechanical matters and the IFRS Foundation
Constitution gives this responsibility to IASB.
 The issuing and approval of construal developed by the IFRS Interpretations Committee.
 Complete prudence in pursuing and making its technical schema. Subject to specific
discussion necessities with the public and the Trustees.
 The issuing and preparation of IFRS and exposure drafts subsequent due procedure fixed
in the constitution.
There are several elements that occur in the conceptual structure along with this there are some
parts in large component. These parts compact with the presentation or disclosure, financial

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performance, reporting entity, de recognition and measurements. There are some examples of
showing conceptual structures are given below:
 The implication of assets and liabilities comprises the additional wide-ranging
supervision to support the explanation.
 The function of substance and prudence higher than from financial detailing.
 Monetary information is not much appropriate whenever it is composed by the high level
of insecurity.
 To complete the motive of financial reporting it is necessary to have financial
information. It contains information that might be used for the individual resources that
might be assisting in the estimation of supervisory stewardship.
According to the exposure draft, it can be suggested that the (AASB) Australian Accounting
Standards Board motive to make sure that it provide correct standards for both profitable and
non-profitable organizations. The principle of IASB is to make sure that application are framed
and recorded Australian Accounting Standards Board standards in the monitory reporting apply
in all the organizations across Australia. This will provide transparency among all the
organizations and unethical work will remove. AASB supposed to monitor the International
Public Sector Accounting Standards abstract framework. It is done for general reason by the
public sector organizations for their financial reporting (Pike, et. al., 2015).
Based on Australian Accounting Standards Board code 1054.7, it is not mandatory for the
Individual business body to publish their financial statements while implementing with the
(AAS) Australian Accounting Standards. If they make sure the fulfillment of these accounts are
achieve all the requirements of AASB. Whereas, code 1054.8 of AASB says that an individual
business entity can issue their explanation on authorized foundation and any exposure structure,

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on the basis of fiscal statements are being made. These financial statements works as a
motivation for other individual business entities (Cortese, et. al., 2010).
Clarification in the Directors Report and in the Notes to Financial Statements
It is shown in the report of the companies that both the companies have followed the AASB
ethics and companies have made their financial report according to the AASB. Companies have
maintained the transparency in their financial report and mention all the aspect that fulfill the
requirement of AASB standards. The main aim of this standard is to provide the format of
making financial report to the company just to make the statements simple and clear and easily
understandable which shows the positions of liabilities and assets in their balance sheet (Cortese,
et. al., 2010). These standards not only provide financial status of the company to the owners but
also to all the stakeholders who has shown interest in their company. However, there is no
impact of these standards on the amount shown in the fiscal statements of the company. The
company uses past expenses as a base while preparing their final accounts and overlook the
various feature associated to investments. Making the final accounts for the company includes
several aspects of the management. Australian Accounting Standards Board and extra
declaration, which is made by the Australian Accounting Standards and some other acts, are
required by the company to accumulate at the time of making financial reports (Cortese, et. al.,
2010).
Compare and contrast of the two annual reports, identify the differences in disclosures of
these.
The comparison of report of both the companies reveals that Adacel Technologies has followed
more appropriately with the standards of accounting that are prescribed by the Australian
Accounting Standards Board as compared to Activist Limited. The information that has been

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presented in the report reveals that Activist Limited has more fairly complied with the
accounting standards than the Adacel Technologies Ltd. Both the companies have chosen
different methods in order to show and disclose the financial information and annual reports of
their respective companies. The Activist Limited has followed different standard codes like
AASB 2015-3, AASB 2014-9, AASB 2014-4, AASB 2015-1, AASB 2015-2, AASB 2014-9, and
AASB 2014-3etc. Apart from this; the company Adacel Technologies Ltd. follows no kinds of
such codes. On the other hand, both of the companies have followed the standards and
legislations that are laid by the Australian Accounting Standards Board in order to prepare the
final reports for the company (De George, et. al., 2012). For instance, majority of the financial
statements are prepared by following the structure prescribed by Australian Accounting
Standards Board.

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Recommendations:
It can be suggested to the organizations that they should simply reveal the detail of AASB
standards fulfillment. The standards would help the key stakeholders to show their trust on the
companies and they retain with the companies for a longer period. The report also recommended
to other companies to follow the Australian Accounting Standards Board for preparation of the
final accounts. Adacel Technologies and Activistic Limited used and applied the standards of
AASB. From the analyze of the report it is measured that Activistic Limited is more crystal clear
compliance of the ASSB in comparison to Adacel Technologies Limited. Adacel Technologies
Limited also follows the standard of ASSB but they do not make the best use of it that impact
will be negative on their stakeholders. While preparing the final accounts at the end of the year
companies should disclose their all accounts. Companies should provide all necessary
information about the company like Company’s performance, profit and loss, position of assets
and liabilities to the public because ultimately they are the main investors for your company, and
become shareholders. If companies follow the ASSB standards while preparing their final
statements then they will surely retain the confidence of the stakeholders and shareholders.

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Conclusion:
The report concludes that the annual reports of Adacel Technologies Limited and Activistic
Limited have followed the Australian Accounting Standards Board (ASSB). Both the companies
have followed all the aspect of (ASSB) Australian Accounting Standards Board for making their
financial reports. The main principle of ASSB standards is to make sure the quality and
maintaining the quality consistently every year while preparing the financial reports and
company should make report with full transparency. Hence, ASSB helps the companies
indirectly for retaining the interest of stakeholders by providing them correct and relevant
financial report. In addition to this Australian Accounting Standards Board, make sure the
appropriate authority of Australian Securities Exchange. The ASSB expose transparency is high
for Activistic limited because company has undoubtedly stated various accounting aspect that is
followed in annual report of the company. The abstract structures are used and modify by the
ASSB for improving financial reporting of the company in the annual report. Hence at last it can
be concluded that both the companies has followed the Australian Accounting Standards Board
for preparing their company’s financial report and pattern for their annual reports and has
maintained the precision.

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