Contemporary Issues in Accounting

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
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Table of Contents
Identification of the Two Companies in Brief...........................................................................3
Comparison of the Basis of Preparation of the Financial Statements........................................3
Comparison On The Basis Of the Accounting Policies in the Companies................................6
References..................................................................................................................................7
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Identification of the Two Companies in Brief
The two companies, which have been selected for the same industry of Banking, are the
Australian Finance Group, from the Australian Securities Exchange (ASX) and the
Agricultural Development Bank Ltd. listed under the Nepal Stock exchange Ltd. The former
company i.e. Australian Finance Group acts as a mortgage broker to its customers. There are
more services that are offered by the company to its clients such as personal loans, mortgage
brokerage services, commercial finance services and insurances. Throughout Australia, this
particular bank serves majorly for the institutions, individuals and organizations. The
company has started its operations in the year 1994 with its headquarters based in West Perth
of Australia (Bloomberg L.P., 2018). Agricultural Development Bank Ltd. is another
company, which has been taken from the country of Nepal. This bank serve as a cooperative
bank, which is aims to provide proper and required banking solutions to the people. The
services that are offered by this bank to its clients fall in the dimensions of saving accounts,
current and fixed deposit accounts. The company has therefore been founded in the year
1968, which mainly operates in Kathmandu, Nepal (Bloomberg L.P., 2018 a).
Comparison of the Basis of Preparation of the Financial Statements
Financial statements are prepared so as to be able to accurately present the financial reports
by the company’s management. This further helps to identify the financial performance and
position of the company at a specific period of time. There lies a great future of financial
statements in the future days (Barth, 2006). It actually serves as a guide that can enable the
business professionals to understand the financial situations of the organizations throughout
the financial years (Ittelson, 2009). The basis of preparation of the financial statements in the
Australian Finance Group are divided into five major factors, which involves the statement of
compliance, functional and presentation currency, basis of measurement, alterations in
disclosures and accounting policies and lastly through the utilization of judgments and
estimates (AFG, 2017).
Firstly, in the statement of compliance, a company’s financial report complies with the
International Accounting Standards (IFRS) and Australian Accounting Standards as issued by
the International Accounting Standards Board. The financial statement of a company
incorporates the consolidated financial statements. Secondly, the factor named functional and
presentation currency precisely identifies that these consolidated financial statements have
been presented in Australian Dollars. The third factor that constitutes the basis of
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