Accounting Theory and Issues - Assignment PDF
Added on 2021-05-31
13 Pages3094 Words49 Views
Running head: ACCOUNTING THEORY AND ISSUESAccounting Theory and Issues Name of Student:Name of University:Author’s Note:
ACCOUNTING THEORY AND ISSUES1Summary AimsThe research is identified with interpreting the prevailing accounting standard in Boral limitedand connecting the various types of issues existing as per GPFR. Some of the main issues for thediscussions are seen with Issues in accounts receivable, Issues in provision for bad debt, Excessvaluation of the assets, Evidence of leasing contingent and Issues in taxation/ expenses.Major FindingsThe findings on accounts receivable depicts that the group evaluates the accounts receivable asper fair value method. In addition to this, the “trade and other receivables” are initiallyrecognized at the value of the invoice for the customer and subsequently which are recoverablefrom the customer’s based on “amortized cost using effective interest rate method”. Theproblems for bad debt are significant with the accounting judgments estimate and assumptions. Ithas been identified that for “cash, deposits, payables, short-term borrowings, loans andreceivables”, the company does not consider carrying value approximates as per fair valuationmethod because of short-term nature of these liabilities and assets. The recognition of the leasesby the company is based on the valuation standards prescribed as per AASB 16. This method isprojected to set the required standard which is set up as per “significant portion of Boral’soperating leases” which are accounted for on balance sheet as a “right of use asset” and “leaseliability” based on the acceptance of the standard on 1st July 2019.
ACCOUNTING THEORY AND ISSUES2Table of ContentsIntroduction......................................................................................................................................3Limitation........................................................................................................................................3Background......................................................................................................................................3Scope................................................................................................................................................3Discussion........................................................................................................................................3Issues in accounts receivable.......................................................................................................3Issues in provision for bad debt...................................................................................................4Excess valuation of the assets......................................................................................................4Evidence of leasing contingent....................................................................................................5Issues in taxation/ expenses.........................................................................................................6Recommendations............................................................................................................................7Conclusion.......................................................................................................................................7References........................................................................................................................................9
ACCOUNTING THEORY AND ISSUES3IntroductionLimitationThe main limitation of the research study is identified with the financial reporting issuesonly for Boral Limited.Background“General Purpose Financial Reporting” are issued to aid the investors and the creditors onseveral types of decision-making process. A set of GPFR includes “balance sheet, incomestatement, statement of owner’s equity/retained earnings, and statement of cash flows”. Certainfinancial statement is termed as GPFR as it entails basic financial statements which can be usedby a “broad range of people for a broad range of activities” (Henderson et al. 2015). Financialreports such as “production flow” process and market analysis are not included in the GPFR. Forinstance, both creditors and investors are able to interpret their set of financial statements whichis conducive in prediction of future performance and the ability of the company to pay off itsfuture and current debts (Asic.gov.au 2018).ScopeThe main scope of the research is identified with interpreting the prevailing accountingstandard in Boral limited and connecting the various types of issues existing as per GPFR. Someof the main issues for the discussions are seen with Issues in accounts receivable, Issues inprovision for bad debt, Excess valuation of the assets, Evidence of leasing contingent and Issuesin taxation/ expenses.DiscussionIssues in accounts receivableThe group has considered the account receivables at the “end of financial year”. It hasbeen further identified that the group evaluates the accounts receivable as per fair value method.In addition to this, the “trade and other receivables” are initially recognized at the value of the
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
SUGGESTIONS REGARDING ASSIGNMENT 1.lg...
|2
|366
|242
Accounting Theory and Contemporary Issueslg...
|24
|4158
|158
Financial Reporting: Provisions, Contingencies, Leased Items and Valuation Methodslg...
|15
|2345
|180
Business Analysis and Interpretation ACC10707lg...
|10
|1161
|40
Financial Statements Analysislg...
|13
|2121
|397
Financial Statements Analysislg...
|11
|2125
|95