Advance Financial Accounting Report: Bega Cheese Ltd Analysis

This report provides an in-depth analysis of the financial accounting practices of Bega Cheese Ltd, an Australian-based dairy company. The report begins with an introduction to financial accounting and its role in recording and presenting a company's financial transactions. It then explores key accounting concepts such as business entity, dual aspects, going concern, cost, realization, and accounting year concepts, and analyzes how Bega Cheese Ltd applies these concepts in its annual report. The report further examines the conceptual framework in accounting, its purpose, and its influence on accounting standards. It also discusses measurement in accounting, including historical cost and fair value, and identifies potential issues in measurement. The report concludes with an overview of financial statements, including their characteristics and the fundamental characteristics of useful information, such as relevance and faithfulness. The report references the Bega Cheese Ltd annual report and relevant academic literature to support its analysis.

Running head: Advance Financial Accounting
Advance Financial Accounting
Name of the Student
Name of the University
Author Note

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Advance Financial Accounting
Table of Contents
Introduction................................................................................................................................4
Discussion..................................................................................................................................4
Accounting Concepts.............................................................................................................4
Analysis of Company Annual Report in regards of accounting concepts.............................6
Conceptual Framework in accounting...................................................................................6
Measurement in Accounting..................................................................................................7
Issue in the Measurement as per the company.......................................................................8
Financial Statement................................................................................................................9
Fundamental Characterise of Useful Information..................................................................9
Conclusion................................................................................................................................10
Reference..................................................................................................................................11
Appendix..................................................................................................................................13

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Introduction
Financial Accounting is the process of accounting which record of the financial
transaction of the company in their financial statement. It shows all the guidelines which the
company should use it for the preparation of the financial statement of the company (Beatty
and Liao 2014). It show the process which the company should use for the account of the
transaction in their financial statement. It checks all the record have been maintained by the
company properly or not and how the company is able to follow all the prescribed method of
accounting in the financial statement (Edgley 2014). It includes all the financial statement of
the company as income statement, balance sheet and cash flow of the company. The
assignment is been based upon the company name Bega Cheese Ltd, which is an Australia
Based company. The company deals in the dairy product and carry its operation in Australia.
The report show about the accounting concepts and how it’s been followed by the company.
It also show about the different qualities of the financial information and how the company is
bale to made it through their financial statement of the company.
Discussion
Accounting Concepts
Accounting concepts are the concepts which are been based by the company to follow while
preparing the financial accounts of the company (Gassen 2014). It shows the different
concepts which help the company to know how it should treat the items in the financial
statement of the company. Some accounting concepts are been described below:
1. Business Entity Concept – As per the accounting rule and principle it should be seen
that the owner of the business and business itself should be treated differently in
regards of the financial accounting as it should treat both as a separate entity and also

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should be treated differently while preparing the financial statement of the account
(Granof et al., 2014).
2. Dual Aspects Concept – It said that there is always a debit if a transaction and also
the credit so if the company record debit than it should also have a credit in the same
(Henderson et al., 2015). So it say that the company should always follow dual
accounting method while preparing the financial statement of the company.
3. Going Concern Concept – It said that the company is always expected to have a
going concern as it have say that the company is able to go for a long-run business
and it will able to create and fulfil all the necessary obligation which are been due in
the company (Hoyle, Schaefer and Doupnik 2015).
4. Cost Concept – It is been said that the company should record all the amount of fixed
asset in cost on the first year of accounting and than it should be followed the process
of deprecation as the asset should be deducted by the deprecation amount so that the
original value of the asset can be easily understand by the company (Kaplan and
Atkinson 2015). So it should follow the same in the financial statement of the
company.
5. Realisation Concept – It state that company should not record the transaction when
the able to know that there is full chance of occurrence of the income in the business
than only it should record the same in the financial statement of the company (Kieso,
Weygandt and Warfield 2016).
6. Accounting Year Concept – The accounting information should be based on a timely
basis as it should be of one year so that it can help the user to know how much the
company is able to increase its performance and also able to judge the same in the
financial statement of the company (Kimmel et al., 2016).

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Analysis of Company Annual Report in regards of accounting concepts
As per the company annual report it can be seen that it have maintain all the above
mentioned points as the shareholder and the company is been treated differently and they
been given the amount of profit only which the company is able to earn from the business so
it can be said it is different in the entity of the two (Asx.com.au 2019). It also seen that the
company is following accounting year concept which preparing the financial as it follow year
concept of accounting so it be said that it able to do the accounting for each year. It can also
be seen that the company is following realisation concept as it have recorded the revenue
only when it is been occur in the business and before that it has not made any recording of the
events is been done by the company (Asx.com.au 2019). Dual concept is also been followed
by the company as it have recorded both aspects off each account which can be seen from the
financial statement of the company and also it able to record all the transaction properly in
the financial statement of the company.
Conceptual Framework in accounting
‘ It is process from which different rules are being created in the accounting. It is
system which gives idea about the new changes which are there to be done in the standard so
that the company can able to follow it more effectively and is able to make the financial
statement more properly in the eyes of the shareholders of the company (Libby 2017). The
rules are been made in such a way that each company can able to follow it and able to present
it in a more prescribed manner in the financial statement of the company. The reason for
having the framework is that it able to set a proper framework in regards of the accounting
standards, it help in clear the dispute which can occur in the accounting process by the
company, it summarize all the principles so that it can able to follow the prescribed standard
properly in the financial statement (Mullinova 2016).

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Measurement in Accounting
The valuation of the asset and liabilities is been done using the given four method as it
depend upon the company to follow which method for the valuation of the asset and
liabilities of the company. The four measurements can be classified as:
Historical Cost - It is the amount of money which the company have spend in acquiring the
asset and in regards of the liability also the same is to be done by the company. It is a concept
which is been used by many industries and also many entity think that it should be good if
they show their asset and liabilities in historical cost (Narayanaswamy 2017). As the
company Bega Cheese Ltd it can be seen that the company has prepared the accounting with
the basis of historical cost convention and it is also been modified by the effect of revaluation
upon the financial asset and liabilities of the company.
Fair Value of Accounting – It is the accounting method which uses the current value to
recognize the liability and asset of the company (Nilsson and Stockenstrand 2015). It show
the real price which can be get by the company when they go for selling the asset and also
when they go for clearing the liability. It helps the company to show the real position of the
firm to the financial user. It show the fair value of the asset and liability so that the company
can able to judge the same in regards of the financial performance of the company (Nobes
2014). As per the company Bega cheese Ltd it can be seen that the company have done fair
value estimation in regards of the asset and liabilities which is been consider for the purpose
of recognition an also help the company for the proper amount of disclosure in the financial
statement of the company. So it can be say that the company is using fair value for some asset
and liabilities. It is been shown in the appendix about the value so the connection of this
paragraph can be done easily.

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Issue in the Measurement as per the company
There can be many issues which the company can face while preparing the financial
statement as the issue which the company is able to face are been listed below:
1. Objectivity- The first issue which the company face is that it is not able to recognize
that what amount is to be recorded and what it should not record in the financial
statement of the company. As it require proper document of the evidence of asset and
liabilities so that it will be able to record the same in the financial statement of the
company (Schaltegger and Burritt 2017).
2. Matching – The second issue is that it able to match the asset with the liability so it is
a problem which make the company financial statement weak and so a result it does
not able to show a proper position of the company so the company should able to
record the same properly in the financial statement of the company (Simkin, Norman
and Rose 2014).
3. Revenue Recognition - The issue is that it does not able to know the amount which
should be recognize as an revenue by the company so it should be a problem as if they
do not able to record the transaction properly so it will directly affect the company
financial statement of the company (Wang 2014).
4. Consistency – The issue is that it able to select proper method for the measurement so
it not possible for the company to follow different method for different amount of
asset so it is been consider as an issue as this not able to make the company properly
record the transaction in the financial accounts of the company (Warren and Jones
2018).
So these are the issue which the company face while doing the measurement of the asset and
liabilities of the company. It also checks about the method which the company have used to
value its asset and liabilities in the financial statement of the company.

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Financial Statement
Financial statement is the record of the business which show how the company is
performing well in the industry. It shows all the details of the business so that the financial
user can able to take proper decision in regards of the company performance. It includes
various report of the company as balance sheet of the company, income statement of the
company and many other report of the company.
Fundamental Characterise of Useful Information
1. Relevance – The first and most important features is that it should provide useful
information to the financial user. It should provide all the detailed financial
information to the user as it should not contain any irrelevant or non-financial
information as it will affect the decision of the financial user of the company. As per
the company it can be seen that they have provided all the useful information in the
annual report of the company and also it can be seen that the company is having all
the notes also so that the user can able to understand the accounting process and also
help them to take proper decision (Asx.com.au 2019).
2. Faithfulness Information – These features suggests that the information which are
been provided in the financial statement are true and fair and no false
misrepresentation is been done by the company upon the financial statement of the
company so that the user will able to get proper amount of information which lead
them to give proper amount of information so that it able to take proper decision in
regards of the financial statement of the company (Asx.com.au 2019). As per the
company Bega cheese Ltd it can be seen that the company have provide all the fair
information in the financial statement and also provide necessary disclosure in related
to the accounting so that more clarity can be occur in the financial statement of the
company (Asx.com.au 2019).

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As per the above it can be seen that the both are been an important feature but if among two it
have to consider one as so it will be faithfulness as the information should be real which are
been shown in the financial statement of the company as if the company is not able to provide
real amount so that it will affect the financial user decision as they will be directly affected by
the value so this is been consider as one of the primary and important features of the useful
information.

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Conclusion
The report concludes that how the financial accounting process help the company as it
show all the guidelines which should be followed by the company in order to get a proper
financial statement of the company. It shows how the company should record the asset in the
financial statement and also the proper valuation is been done by the company or not. It also
shows them the proper amount of disclosure should be done by the company or not.
It also shows about the company name Bega Cheese Ltd, which is a dairy based
company. It shows about accounting concepts as how the company follow it’s in the
accounting of the financial transaction. It concludes that the company follow both historical
cost as well as fair value of accounting to record the accounting transaction of the company.
It is also conclude about the conceptual framework and measurement in accounting as it show
the different principle which the company used for the accounting and also show what are the
issue which the company have faced while preparing the account using those measurement
concepts as a whole. Lastly it conclude about the financial statement and what are its
important features which help the financial user to take necessary decision in regards of the
financial performance of the company. As if the company is not providing relevance
information in the financial statement that it will not be possible for the financial user to take
decision in regards of the financial performance and also it will affect their decision as the
amount is not real than it can be material misstatement in the financial statement.

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Reference
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