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Accounting Polices and Approaches Report

   

Added on  2020-04-07

17 Pages4166 Words64 Views
Accounting 1Running Head: ACCOUNTINGAccounting Theory and Current Issue

Accounting 2Executive Summary:This research aims to find out and evaluate the accounting policies and approaches ofWesfarmers Limited. In the research, it is found that the company uses different accountingpolicies for different accounting transactions such as taxation policy, business combination,and the principle of consolidation. Wesfarmers uses flexible accounting system for recordingthe business information. It uses consistent and associate accounting strategies. Furthermore,it is found that the accountants of company comply with IFRS, AASB, ISAB, and otherstandards for ensuring the quality of information in the report. Eventually, the organizationfollows the guidelines in information disclosure to its shareholders.

Accounting 3Table of ContentsExecutive Summary:..................................................................................................................2Introduction:...............................................................................................................................4The body of report:.....................................................................................................................6Background of the Wesfarmers and evaluation of accounting policies:....................................6Section 1: Identify Key Accounting Policies.........................................................................6Section 2: Assess Accounting Flexibility.............................................................................10Section 3: Evaluate Accounting Strategy.............................................................................11Section 4: Evaluate the Quality of Disclosure......................................................................12Section 5: Identify Potential Red Flags................................................................................13Section 6: Compliant with the Conceptual Framework.......................................................14Conclusion:..............................................................................................................................15References:...............................................................................................................................16

Accounting 4Introduction:Accounting policies are the set of different accounting principles, rules, and regulations thatare used by the business firms in preparation of financial statements for the specific year. Theaccounting policies involve the policies related to inventory management and pricing,depreciation on business assets, cost of research and development activities, andconsolidation of the business financial statements. The company selected for this report isWesfarmers, company is the Australia’s Supermarket chain, and business operations of thecompany cover the convenience stores, departmental stores, liquor, hotels, energy andfertilizers, home improvements and industrial health and safety products. The AASB(Australian Accounting Standards Board) works for the development and maintenance of thefinancial reporting standards. AASB stated that management of business organizations needto make the decisions and assumptions regarding the business assets and liabilities on basis ofhistorical performance. As per the guidelines provided by the AASB, it is essential thatbusinesses must make the estimation of the company intangible assets for the preparation offinancial statements.Along with this, this report also discusses the accounting policies in relation to assets andliabilities, income tax, and depreciation. The flexibility in accounting policies discusses thenecessary changes in the used accounting system to make the changes based on the businessoperations and efficient management and need for transactions. This report also presents thediscussion on the accounting strategy and quality of the disclosure in the company financialstatements. Furthermore, the report analyses the potential red flags and conceptual frameworkused by the Wesfarmers. It is also essential for the business that they discuss the changesadopted in preparation of financial accounts in their reports and must follow the accountingpolicies. Furthermore, disclosure term refers to releasing of all the necessary information inthe company financial statements that is important to the company and its stakeholders that

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