Accounting Concepts and Measurement in Super Retail Group

Advance Financial Accounting
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Executive Summary
This report has been developed for the purpose of examining the accounting concepts and
the conceptual accounting framework principles adoption within an ASX listed entity, that is,
Super Cheap Auto. It has been identified on the basis of the report that the company integrates
the use of going concern, money measurement and going concern concept for development of
financial reports. Also, it has adopted a mixed model of accounting that integrates the use of
historical and fair value method for accounting of its assets and liabilities.
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Contents
Introduction.................................................................................................................................................4
Part 1: Description of accounting concepts used by Super Retail Group to prepare the annual report......4
Part 2: Issue of Measurement in Accounting with Example from Allocated Company................................9
Part 3: Examination of Relevance and Representational Faithfulness of Financial Statements with the use
of Allocated Company...............................................................................................................................12
Conclusion.................................................................................................................................................14
References.................................................................................................................................................15
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Introduction
The present report has been developed for analyzing and examining the importance of
conceptual framework of accounting for development of high quality financial reports. The
usefulness of relevance and faithful representation of financial information provided by the
conceptual framework has been discussed within the report in context of a selected ASX listed
company. The issue associated with measurement approach used for accounting of assets and
liabilities has also been discussed within the report by citing example from the selected
company. The company selected for analysis purpose is Super Cheap Auto, a subsidiary of Super
Retail Group Limited, an Australian based company that is involved in operating a portfolio of
retail brands across Australia. Super cheap auto subsidiary of the Group is a recognized
automotive retailing company of Australia that is involved in production of auto spares parts and
accessories.
Part 1: Description of accounting concepts used by Super Retail Group to
prepare the annual report
There are different accounting policies and treatments that can be followed to account for
the same financial items. So it becomes necessary to bring some uniformity and consistency in
accounting for the user’s sake so that books of accounts maintained by companies globally can
become comparable. Taking a note to the matter of maintain uniformity and making books of
accounts comparable, international accounting bodies laid down some principles and guidelines
which are to be followed while preparing the accounts of the company. These principles and
guidelines are classified as accounting concepts and conventions. Some of the accounting
concepts are discussed in below points which have been followed by Super Retail Group in its
financial reporting process (Needles, Powers and Crosson, 2013).
Business Entity Concept: Business entity concept assumes the corporate and its owners two
separate entity. Company maintains its corporate veil between owners and company.Which
shows that every single transaction will be done by the company and for the company and not for
any personal gain of the owners and managers. Super Retail Group has shown owner’s capital or
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