Advance Financial Accounting

Running head: ADVANCE FINANCIAL ACCOUNTING
Advance financial accounting
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1ADVANCE FINANCIAL ACCOUNTING
Table of Contents
Introduction.................................................................................................................................2
1. Accounting concepts............................................................................................................2
2. Measurements issues associated with conceptual framework............................................3
3. Fundamental qualitative characteristics...............................................................................5
Conclusion..................................................................................................................................6
Reference....................................................................................................................................7

2ADVANCE FINANCIAL ACCOUNTING
Introduction
Main purpose of the report is to focus on the annual report of ASX listed company OZ
Minerals in context of the accounting concepts used by it. For that purpose the report will 1st
list down different types of accounting concepts available to be used by the entities while
preparing the financial statements. The report will also discuss the issues related to
measurement in accordance with the conceptual framework. Further, the report will discuss
about the qualitative characteristics like faithful representation and relevance in context of the
annual report of the company for the year ended 2018. OZ Mineral is the modern mining
entity that is based in Australia and listed under ASX. It is focused on generating value for its
shareholders. OZ Minerals is operates and own the copper gold mine and is concentrated in
copper and hence is focused in creating the pipelines for gaining opportunities
(Ozminerals.com 2019).
1. Accounting concepts
Accounting concepts involves theory as well as practical aspects that is build on the
accounting principles and the accounting principles are build on assumptions that is known as
accounting concepts. It segregates the business from its owners. In context of accounting the
business and the owner are considered as 2 different entities. It helps the accountant to
identify the transaction involved in the business and the personal transactions. However, all
the business organization irrespective of company, partnership and proprietorship shall
follows these accounting concepts (Deegan 2013). Various accounting concepts are listed
down below –
 Money measurement concept – this concept states that only the transactions those are
related to finance and can be measured in terms of money to be reported in the books
of accounts. Hence, transaction those cannot be expressed in terms of money shall not
be reported in the financial accounting irrespective of its significance.
 Cost concept – this concept states all the assets reported in the accounting books shall
be reported at the price at which they have been acquired or purchased. The purchase
price is inclusive of the acquisition cot, installation and transportation cost. In
subsequent years the price remains the same and only the depreciation and
impairment loss if any is charged. Hence, the asset’s market price is not taken into
consideration (Francis, Hasan and Wu 2013)
 Full disclosure concept – this concept states all the relevant information shall be
disclosed in accounting statements. Number of external users takes their investment
and credit related decision based on the information and disclosures provided in the
financial statements. Hence, no information shall be omitted from the statements for
the benefit of the entity as well as its stakeholders (Ifrs.org 2019)
 Going concern concept – it presumes that the business will be able to continue its
operation for the indefinite period and for the foreseeable future the entity will not wind
up its business. It leads to assumption that business of the entity will not require to sell
its assets in near future and it will be able to meet its obligations efficiently (Frias‐
Aceituno, Rodriguez‐Ariza and Garcia‐Sanchez 2013)
 Accounting period concept – in accordance with this concept, each organization must
choose the time period for completing its accounting cycle. Normally, time is chosen is