Assignment on Accounting and Reporting Frameworks
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Added on 2020-04-07
Assignment on Accounting and Reporting Frameworks
Added on 2020-04-07
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RUNNING HEAD: Accounting policies and estimates used by firm1Name of the Student-Title- Accounting and reporting frameworks University Name-
Accounting policies and estimates used by firm2Table of ContentsIntroduction.................................................................................................................................................3Accounting policies and GAAP rules followed by BP Billiton Company.......................................................4Estimates used by BP Billiton Company...................................................................................................5Estimates used by rivals...........................................................................................................................6Comparison of accounting policies and estimates used by BP Billiton Company s and Morrison plc......6Assesse accounting flexibility..................................................................................................................8Evaluation of accounting strategies and policies.........................................................................................8Changes in accounting estimates by the BP Billiton Company................................................................9Suggestion for accounting policies and estimates prepared by BP Billiton Company............................10Red flag in accounting report of BP Billiton Company...............................................................................10Conclusion.................................................................................................................................................15References.................................................................................................................................................16Appendix...................................................................................................................................................19
Accounting policies and estimates used by firm3Introduction This report reflects the debt understanding on normative and positive theories of financialaccounting. Each and every company needs to establish proper level of harmonization indomestic and international accounting standards. There are several companies such as BPBilliton Company, Wesfarmers plc and Morrison plc that have been running its business sincevery long time in Australia. However, due to the different accounting sets and standards, thesecompanies have been facing several red flag while reporting its financial standardsIn this report,it is given that reporting frameworks of organization are depends upon the accounting standardsand reporting framework of organization. It is observed that Accounting policies are the standardand specific rules, procedure and accounting implication which are used by accountant to preparethe accounts and financial reporting of organization. In this report study has been prepared howBP Billiton Company has been following IFRS rules and possible red flags faced by company inits reporting frameworks. Present description of organizationIn this report BP Billiton Company has been taken into consideration to identify theestimates in accounting reporting and red flags in accounting and reporting of financial statementof company. It is Australian Conglomerate Company which has been providing oil and gasservices on domestic and international level. This company has followed proper level ofinternational financial reporting standards and endeavor towards harmonization in GAAP rulesand regulation and application international accounting standard (Kieso, Weygandt andWarfield, 2010)
Accounting policies and estimates used by firm4Accounting policies and GAAP rules followed by BP Billiton CompanyThere are several financial and accounting policies followed by BP Billiton Company whileaccounting and reporting of financial statement (Irvine and Moerman, 2017).BP Billiton Company has adopted straight line and written down method to chargedeprecation on its assets. With the help of these depreciation methods, company couldreflect the true and fair view to reflects the true value of its assets as per the IFRS rulesand standards (Hussey and Ong, 2017).There is another implication which is related to AASB16 lease, BP Billiton Company hasmade provision of right-of-use assets while reporting its underlying leased assets in thebusiness.All the assets and consolidation of financial statement of company has been done as perthe AASB-5 IFRS rules and accounting standards (Cairns, et al. 2011).With a view to showcase the true and fair view of assets of company, BP BillitonCompany has implemented impairment test in its business functioning. All theimpairment loss has been charged from the cash generating units of organization afterdeducting the amount from the goodwill. (de Ricquebourg and Jonathan, 2013).BP Billiton Company has prepared its financial statement after following AASB 101.This level of reporting frameworks has allowed BP Billiton Company to increase thetransparency and effectiveness of financial statements in determined approach. AASB-117 has also been followed by BP Billiton Company to strengthen its accountingand reporting of its leased assets to its stakeholders in determined approach.
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