Application of Accounting Theories on the Annual Report of Iluka Resources
Added on 2021-06-18
16 Pages3279 Words102 Views
Running head: ACCOUNTING THEORY AND ISSUESAccounting Theory and IssuesName of the Student:Name of the University:Author’s Note:Course ID:
1ACCOUNTING THEORY AND ISSUESExecutive Summary:The current report is prepared on the application of various accounting theories on thebusiness activities and operations of Iluka Resources. For this purpose, various accountingtheories on the current annual report of the organisation have been applied. It has been found thatIluka Resources did not have a strong financial year due to the net loss suffered and increaseddebt burden in 2017. However, it has managed to ensure increased dividend payouts to itsshareholders for maximising their wealth. The issues related to liquidity, solvency, comparabilityand investment in capital projects for which suitable recommendations have been provided toIluka Resources to increase its financial position and transparency in reporting.
2ACCOUNTING THEORY AND ISSUESTable of Contents1. Introduction:................................................................................................................................31.1 Company profile:...................................................................................................................31.2 Products and services:............................................................................................................31.3 Iluka Resources’ share price is increasing- News:................................................................32. Accounting theory and items:......................................................................................................53. Conceptual framework:...............................................................................................................63.1 Reliability:.............................................................................................................................73.2 Relevance:..............................................................................................................................83.3 Understandability:..................................................................................................................93.4 Comparability:.......................................................................................................................94. Agency theory:..........................................................................................................................104.1 Directors’ remuneration:......................................................................................................105. Critical evaluation of the application of accounting theories on Iluka Resources:...................126. Recommendations:....................................................................................................................137. Conclusion:...............................................................................................................................13References:....................................................................................................................................14
3ACCOUNTING THEORY AND ISSUES1. Introduction:This report is prepared on the application of various accounting theories on the businessactivities and operations of Iluka Resources. For this purpose, various accounting theories on thecurrent annual report of the organisation have been applied. Under this specific framework, thissegment represents the organisational profile along with its associated products and services.After this, the section provides a brief description of the increasing share price of theorganisation. 1.1 Company profile:Iluka Resources, which is listed on the Australian Stock Exchange (ASX), is a significantparticipant in the international minerals sand industry. The organisation is involved in projectdevelopment, exploration, marketing and operations of mineral sand products. The primaryassets and operations of the organisation are situated mainly in Australia; however, its operationsare present in US and Sierra Leone as well (Iluka.com 2018). 1.2 Products and services:Iluka Resources is the biggest provider of titanium-dioxide derived rutile, zircon andsynthetic rutile internationally. In addition, it is involved in mining heavy mineral sands and itsegregates the concentrate into individual mineral components like ilmenite, zircon and rutile.Furthermore, it owns the royalty over the revenues of iron ore sales from the tenements of themining area of BHP Billiton (Iluka.com 2018). 1.3 Iluka Resources’ share price is increasing- News:It has been observed that the share price of Iluka Resources has risen to $11.43 on 3rdMay 2018 after it has released its annual results on February 27. Even though it has declared net
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