Accounting Principles and Policies in Amcor Limited

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Current Issues of Accounting in Amcor
Limited
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Executive Summary
Concepts of accounting theory are determined to be critical and need factors that must be used
while executing a business to manage data and records systematically. The study of accounting
theories and policies includes all types of practices such as accounting and historical practices.
Theories of accounting principles and standards are regarded as a major concept of the
breakdown of accounting theories while executing a business. Applying relevant accounting
theories helps in solving issues related to sustainability, corporate social responsibility, a key
performance indicator, and environmental performance and so on. Thus, the paper provides an
identification of accounting theories and models to overcome accounting issues. It also provides
an analysis of accounting theories and models related to accounting issues. It provided an
understanding of how the theories could be applied Amcor Limited in order to resolve the
accounting issues effectively.

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Table of Contents
Introduction....................................................................................................................................................4
Identify and analyze current theories and models in accounting...................................................................4
Theories......................................................................................................................................................5
Models........................................................................................................................................................8
Apply theories and models in Amcor Limited.............................................................................................11
Discussions:.................................................................................................................................................14
Recommendations....................................................................................................................................18
Conclusion...................................................................................................................................................20
References....................................................................................................................................................21

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Introduction
The paper will provide an understanding of different accounting theories and models that would
be beneficial for the organization to deal with accounting issues effectively. Generally, the
accounting theories do not present the economic events that affect the business. The paper will
provide a clear understanding of the concepts of the accounting theories and how it could be
applied within the business organization. Moreover, the paper will discuss the accounting issues
of Amcor Limited in Australia. Amcor Limited is considered to be a global packaging company
that creates and manufacturer’s flexible packaging, closures, specialty cartons and rigid
containers and services for personal care, medical device, pharmaceuticals and beverages and
other such products. It has been listed on the Australian Securities Exchange (ASX).
Additionally, it also provides information regarding the concepts of financial accounting that
must be followed by the organization in Australia. Therefore, the paper will help in identifying
and analyzing relevant accounting theories and models.
Identify and analyze current theories and models in accounting
Accounting is an important part of a business within an organization. Detailed record-keeping
enables a business to furnish accurate financial reports to the internal revenue Service, lenders,
and shareholders, among others. Constant changes to the hiring and retaining employees, tax
system and the impact of technology are the challenges for the modern accounting industry,
especially in Australia (Stewart, Kent and Routledge, 2015). Thus, the accounting theories and
models are applied by Amcor Limitedin Australia. The accounting theories and models helps the
organization to explain the existing procedures and practices to get a better understanding and to
facilitate an appropriate set of logical principles.

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Theories
Cost Principle theory:-The theory of cost principle records all the assets on the books as
each asset is acquired. Assets could be real property or equipment. According to this theory,
transactions must be listed on the financial records as a historical cost, such as the real value of
cash at the period the asset was bought, rather than the current value of the market. It is defined
as one of the fundamental guidelines for accounting and bookkeeping and also known as the
concept of historical cost. Cost principle is more straight forward and much quicker to record the
assets at their real value than to constantly update financial reports to understand present market
value (Zyznarska-Dworczak, 2018). As this theory is easy and quick to verify the assets value,
auditors and accountants don’t require to spend more time in verifying financial records and also
make it inexpensive for the organization who hire them.
Matching principle theory:-This theory of an accounting holds a transaction as a unit
means it books all expenses related to a detailed revenue. Under the theory of matching
principle, the expenses are presented as the revenue generated at the same time such as a year or
month. In other word, the theory directs the organization to match the expenses and revenues at
the same time to the possibility of the highest extent, regardless of when subsequent events
happen. Such as, a sales commission might be paid in March for the products sold in February.
Therefore the expense in the theory accounts for the commission in February not in March when
it is paid. If the organization is using the theory of matching principle they must be consistent
with the monthly recording costs related to revenues. This theory exists only in the accrual
method of accounting. For example, if an organization has a salesperson who earns 2000 dollars
in commissions for work done in February, the expense for this should be recorded in the same