Advanced Financial Accounting: Concepts, Framework, and Measurement

Advanced financial accounting

Table of Contents
Introduction........................................................................................................................................3
Description of Accounting Concepts..........................................................................................3
Conceptual framework and issue related to measurement....................................................6
Fundamental qualitative characteristics.....................................................................................8
Conclusion.......................................................................................................................................11
References.......................................................................................................................................12

Introduction
This report is associated with financial accounting, which is advancing in nature as it
is concerned with the summary, examination along with the reporting associated with
monetary activities of business organization. This report provides an effective focus
on Oil Search Limited as it deals in oil and gas exploration in Australia. This report
includes the accounting concepts description. Along with this, the examination needs
to be done of a conceptual framework as well as issues of measurement. Apart from
this, it also includes the qualitative characteristics in understanding the application
authenticity.
Description of Accounting Concepts
The accounting principles are prepared by using the basic concepts as it helps in
preparing effective financial statements. Basic accounting concepts cannot be ,
which is listed by the other authors. These concepts are widely accepted in
preparing the financial statements and needs to verify these statements by hiring the
auditors.
Business Entity Concept: This concept based on different assumptions that
financial statements and also the other accounting information are included for the
specific business purpose as it is different from its owners. The assets and liabilities
of the business organization are associated with the business activities, but the
transactions are related to the owners of business organization. This concept helps
in distinguishing the personal as well as business transactions, and also apply to the
different enterprise (Accounting Tools, 2019).
Money Measurement Concept: This concept describes that accounting is a
measurement along with the communication process of activities because this helps
in measuring the value in monetary terms. The financial statements describe the

used money. This concept implies the two limitations of accounting that is it is
associated to the limited production of data which is expressed in terms of the
monetary unit and another is it concerns with the limitations of monetary unit as a
unit of measure. The main characteristic of this unit is purchasing power and also the
goods which obtained money by his concern.
Going Concern Concept: This concept helps business organization in providing the
justification to the valuation of assets according to the non-liquidation and also calls
for the utilisation of historical cost for the different valuations. In this concept, the
fixed assets, as well as intangibles, are amortised for the useful life instead of a
shorter period in providing the expectations of early liquidation. This concept leads to
the proposition of financial statements, which becomes part of continuous
improvements. Apart from this, it is a concept which is helpful for data
communication, which is tentative in nature as well as discloses the adjustments
which are revealed by more developments (Chatterjee, 2016).
Accounting Period Concept: According to this concept, financial accounting offers
the information or data associated to the economic activities of the business
organization but for a specific period of time that is lesser than the life of the
business organization. In this concept, the time period is of equal length, which aids
in facilitating the comparison. In the financial statements, the time period is identified,
but usually, the time period is taken 12 months but sometimes quarterly as well as
half-yearly statements are also issued by the company.
Accounting cost concept: This concept describes that all the assets along with the
resources of the company are recording in the financial accounts on their purchase
price as it includes the cost of acquisition of a product, installation cost,
transportation cost but not at its market price. This concept includes fixed assets