Advanced Financial Accounting: Elements of Financial Report, Conceptual Framework, Reporting Entity, Revenues and Gains, Property Plant and Equipment

This document provides an overview of advanced financial accounting, focusing on elements of financial reports, the nature and benefits of the conceptual framework, determining if a company is a reporting entity, differentiating revenues and gains, and understanding the measurement and valuation of property, plant and equipment. The case study used is Japara Healthcare Limited, an Australian-based company providing services to aged people.

Advanced Financial
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Elements of financial report with relevant examples and critically discuss the nature and the
benefits of the conceptual framework for accounting.................................................................1
2. Identify and critically discuss if allocated company is a reporting entity, provide detailed
and relevant examples and factors to support argument.............................................................3
3. Identify and discuss if allocated company show revenues and gains? In your view, do you
think differentiating revenues and gains is of a benefit to the users of the financial statements?
Explain and provide examples....................................................................................................3
4 Explain and discuss the list of Property, Plant and Equipment, including impairment
assessments in the financial statements and the related notes. How are these assets measured
and valued?..................................................................................................................................4
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Advanced financial accounting is studied with financial reporting and business ability
which are applied by the organisations to deal with international business entities. The members
of company who provides assurance about the financial reports and prepare all the financial
statements as per the IFRSs. In this accounting consist of transaction, structure, merger of public
holding companies, changing financial statement designed as foreign and local currencies (Chen
and Komal, 2018). This report based on the Japara healthcare limited. It is a Australian based
company that listed into Australian securities exchange and provide services to aged people. In
this report consist of nature and benefits of conceptual framework for accounting and analysis
allocated entry in detailed manner with examples. Along with identify revenues and gains of
selected organisation and benefits for users of the financial statements. Moreover, make a list of
plant and property from financial statement and measurement of assets.
MAIN BODY
1. Elements of financial report with relevant examples and critically discuss the nature and the
benefits of the conceptual framework for accounting
Japara is one of Australia's leading business that provides and design of residential aged
care where deliver better living standard to elderly Australians. After the analysis of annual
report of company it is getting that company prepare different types of financial statements
prepare by the business to present the actual financial position of business. It supports board of
directors to take right decision for future investments. There are mentioned different elements of
financial report of Japara such as:
 Assets: It is categorised into current and non current assets. In the section of current
assets consist of different items such as, in 2019 cash was 31472, trade and other
variables 14640, current tax receivables nil and other assets were 6216. In the other
section of non current assets consist of in the year of 2019 was trade and other
receivables was 2347, property plan and equipment was 787767, intangible assets was
555319 (ÖZCAN, 2019).
In the year 2020, current assets and non current items are some decreased and some are increased
due to flexible situation. In the section of current assets, cash was 48286, trade and other
receivables was 15326, current tax receivables was 1860 and other assets was 3681. In the
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section of non current assets concentrate on the trade and other receivables was 2574, property,
plant and equipment was 833202 and intangible assets was 265761.
 Liabilities: In the year 2020 analysis the current and non current liabilities. In both
sections includes different items such as, trade payable which was 34104, borrowings
was 58250, lease liabilities was 2338 and many others. In non current consist of
borrowings was 180750, employee provisions was 5608 and other financial liabilities was
5039 (Chychyla, Leone and Minutti-Meza, 2019).
 Profit & loss: In this statement consist of revenues of company which was 422242 in the
year 2020 and profit before income tax was (292882) and profit for the year was
(292087).
A conceptual framework is defined as a system of ideas and objectives that helps to make
consistency in business and helps to set effective financial standards.
Nature: The nature of conceptual framework to assist in the improvement of potential
activities that based on IFRS and analysis of currently standards by setting out underlying
concepts. Along with it promote harmonisation of accounting regulations and standard use to
reduce the number of errors that occur in set framework.
Benefits: There are mentioned different benefits of conceptual framework which are used
by the Japara healthcare limited:
 This framework beneficial to develop and set up established body of concepts and
objectives
 It is providing a particular structure for sort out new and emerging practical difficulties of
accounting (Hairston and Brooks, 2019).
 To increase comparability among entities financial reports. Along with it helps to leading
to the improvement of accounting standards that are internally consistent with each other.
 Enhance financial statement users to understand of financial reporting
 It is beneficial to ignore the situation that based on the standards and accounting
problems is identified on basis of having emerged then channeled into standardization.
 In this framework setting particular accounting standards on basis of sort out accounting
disputes and do not repeated accounting standards (Ng, 2018).
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2. Identify and critically discuss if allocated company is a reporting entity, provide detailed and
relevant examples and factors to support argument
Reporting entity is an entity where expect that users depend on the general purpose report
to analysis the effective financial position and performance of the business. On the basis of
results make effective decisions and collect all the financial report. The Japara healthcare limited
is a reporting entity who depends on the general purpose financial reporting. On the basis of
these purposes company meet with the objectives of management and determining decisions in
regard of the allocation of resources. The company is responsible to maintain all the financial
accounts and contains a record in which specified of particular financial transactions to the
income tax authority (Han, He, Pan and Shi, 2018).
It is reporting entity because it is prepared a GPFR that means Australian accounting
standards applied at the preparation of financial report. Therefore, when an entity is considering
as non entity so that time requires to prepare a special reason of financial report that does not
require to apply all the Australian accounting standards. There are many benefits that occur for
the reporting entity that every reporting framework is addressing all the risk whether all incorrect
Australian securities and investment commission will examine those charges with commission
and breaching the reporting requirements.
For example, Japara prepare different types of financial statements such as., profit and
loss statement, cash flow statements. These are based on the GPFR Australian accounting
standards (Himick and Brivot, 2018).
3. Identify and discuss if allocated company show revenues and gains? In your view, do you
think differentiating revenues and gains is of a benefit to the users of the financial
statements? Explain and provide examples.
The revenues and gains of the company presents the actual financial health and helps in
decision making procedure. For the revenues requires to prepare statement of profit and loss in
which mention all the income and expenses after that get the amount of net gain. There are
analysing five year revenues and gains of the company such as
Particular 2019/20 2018/19 2017/18 2016/17 2015/16
Operating revues 427.5 399.8 373.2 362.2 327.3
Net Gains (Profit) -292.1 16.4 23.3 29.7 30.4
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As per the above data it has been analysed that company generate different revenues and
gains in every year. The data presenting in increasing manner it means company has effective
financial performance. Net gains of the Japara fall down due to face pandemic situation and it
impacts on the business in direct manner. In the year of 2020 company has 422,242 revenues and
in 2019 have 394937.
Most of the organisations record different items like gains, revenues, expenditure and
losses that record in the income statements. These items are sounding same but it is different in
practice use for gains and revenues. As per the my point of view it is saying that revenues and
gains are differentiated is profit because in revenues includes all taxes and interests that need to
pay. On the other side in gains less taxes, interest that use to present the actual position of the
business. Thus, it is saying that it is right for the accounting users to differentiate of the revenues
and gains (Kozlowski, Issa and Appelbaum, 2018).
Revenue is amount which is generated by the business entity after complementation of
main operating activities like retailer selling merchandise of effective law that providing legal
services. On the other side Gain is defined as outcome of marginal operations like retailer
selling of the old delivery trucks. A gain arise when the cash amount received and it is noticed in
excess manner and referred to as the asset's book value. For example, when an organisation
receives $5000 for old delivery truck and the carry amount noticed at the book value so sales
was $800, the company will have a gain $4200.
Differentiation of gains and revenues is beneficial for users because they are easily record
all the transactions and less operating expenses from the revenues. After all the deductions get
the amount of the gains that presents actual position and take right decision in regard of future
investments.
4 Explain and discuss the list of Property, Plant and Equipment, including impairment
assessments in the financial statements and the related notes. How are these assets
measured and valued?
Property, plant and equipment is mentioned at the cost and from the amount less
depreciation amount and impairment losses. The carrying amount of property, plant and
equipment is analysis on yearly basis as per the guidance of organisation directors to guaranteed
about the excess of the recoverable amount from these assets. The recoverable amount has been
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analysed on the basis of set net cash flow which will be accepted from asset's employment and
subsequent disposal. The expected net cash flow has been based on the discounted present
values to analysis of recovering values.
The subsequent cost are consisting of carrying value of assets in effective way that is
reasonable to potential future economic advantages with the item that will go with flow to the
group and all the cost of different items can be measured in effectively (Leuz, 2018). At the
preparation of profit and loss statement focus on the impairment loss and other comprehensive
income in the particular financial year. There are making the list of plant, property and
equipment such as
At the end
of year 2020
Land and
building
Property
improvemen
t
Plant and
Equipment
Motor
Vehicles
Capital
Works in
Progress
Total
Balance at
the
beginning of
the year
606868 41405 55201 46 84247 787767
Additions 15624 2398 8817 - 71531 98370
Disposals -9422 -2697 -46 -8 - -12173
Transfers
from capital
works in
progress
68493 21889 240 - -90622 -
Transfers to
investment
property
-12163 - - - - -12163
Transfers to
assets held
for sale
-2100 - - - - -2100
Depreciatio -12482 -2087 -9480 -27 - 24076
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n expense
Impairment -1890 -41 -492 - - -2423
Balance at
the end of
the year
652928 60867 54240 11 65156 833202
Measurement and valuation of PP&E
1. It is likely that potential economic advantages related with the assets will flow to the
business in particular financial year which is more than a year.
2. The cost of assets calculated on the estimated reliably.
3. Any purchase price and other import duties, sales, discounts and consider other rebates.
4. To predict the values of costs that reduce from the assets and restoring the site where it is
located. The company mainly focus on the asset retirement obligation (ARO).
For the valuation of PPR requires to concentrate on the amount of depreciation and
capital expenditure for the development of different activities that are mentioned at the carried
cost. From the amount less the amount of impairment loss (McNellis, 2018). In the cost consist
of constructions cost, professional fees, internal wage expenditure and many others that
contribute in the developing activities. After the classification of assets as land and building as
per property improvements. At the time of financial year construct of two aged care homes such
as, The regent in Victoria and Robina rise in Queensland.
Property, plant and equipment is measured at the cost and subsequently calculated either
on set cost, other wise use revaluation model. After that apply the depreciation value in
systematic manner to know actual cost of the PPE at the end of financial year. For the
measurement add the amount of gross property, plant and equipment that mentioned on the
balance sheet to capital expenditures. After that less amount of accumulated depreciation from
the outcomes and get actual amount of PPE (Moll and Yigitbasioglu, 2019).
CONCLUSION
As per the above report it has been concluded that advanced financial accounting based
on the set objectives and standards. It is following by the different organisations to achieve their
set objectives. For this requires to following conceptual framework that is beneficial to sort out
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accounting errors in shorter period of time. Along with analysis of reporting entity which is
based on the general purpose and complete all the task in particular period of time.
REFERENCES
Books and Journals
Chen, S. and Komal, B., 2018. Audit committee financial expertise and earnings quality: A meta-
analysis. Journal of Business Research. 84. pp.253-270.
Chychyla, R., Leone, A. J. and Minutti-Meza, M., 2019. Complexity of financial reporting
standards and accounting expertise. Journal of Accounting and Economics. 67(1).
pp.226-253.
Hairston, S. A. and Brooks, M. R., 2019. Derivative accounting and financial reporting quality:
A review of the literature. Advances in accounting. 44. pp.81-94.
Han, J., He, J., Pan, Z. and Shi, J., 2018. Twenty years of accounting and finance research on the
Chinese capital market. Abacus. 54(4). pp.576-599.
Himick, D. and Brivot, M., 2018. Carriers of ideas in accounting standard-setting and
financialization: The role of epistemic communities. Accounting, Organizations and
Society. 66. pp.29-44.
Kozlowski, S., Issa, H. and Appelbaum, D., 2018. Making government data valuable for
constituents: The case for the advanced data analytics capabilities of the ENHANCE
framework. Journal of Emerging Technologies in Accounting. 15(1). pp.155-167.
Leuz, C., 2018. Evidence-based policymaking: promise, challenges and opportunities for
accounting and financial markets research. Accounting and Business Research. 48(5).
pp.582-608.
McNellis, C. J., 2018. Dynamic Divestures: A codification exercise on the reporting of
discontinued operations. Issues in Accounting Education. 33(1). pp.53-63.
Moll, J. and Yigitbasioglu, O., 2019. The role of internet-related technologies in shaping the
work of accountants: New directions for accounting research. The British Accounting
Review. 51(6). p.100833.
Ng, A. W., 2018. From sustainability accounting to a green financing system: Institutional
legitimacy and market heterogeneity in a global financial centre. Journal of Cleaner
Production. 195. pp.585-592.
ÖZCAN, A., 2019. Analyzing the impact of forensic accounting on the detection of financial
information manipulation. Manas Sosyal Araştırmalar Dergisi. 8(2). pp.1744-1760.
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