Advanced Financial Accounting

Running head: ADVANCED FINANCIAL ACCOUNTING
Advanced Financial Accounting
Name of the Student
Name of the University
Author’s Note

ADVANCED FINANCIAL ACCOUNTING1
Table of Contents
Introduction................................................................................................................................2
1. Concepts of Accounting.........................................................................................................2
2. Lease AASB 16......................................................................................................................4
3. Lease Disclosures by Whitehaven Coal.................................................................................6
Conclusion..................................................................................................................................9
References................................................................................................................................10

ADVANCED FINANCIAL ACCOUNTING2
Introduction
Business organizations can record the financial transactions with the help of
accounting while accounting also plays a crucial part in conveying a business’s financial
position. The application of accounting principles is of significant importance in accounting
processes; and the main components of the accounting principles are the accounting concepts
and conventions. It can be ensured that the financial accounts of the corporations are
informative as well as reliable when the use appropriate and relevant accounting concepts in
developing the financial accounts and reports. The first objective of the report is to provide
the description of the used accounting concepts in Whitehaven Coal’s 2018 annual report. In
the recent years, business organizations have witnessed massive changes in the way of
accounting for lease because of the initiative to introduce AASB 16 Leases where the
accounting authorities have included certain changes in order to make lease accounting more
transparent. More specifically, the previous lease standard that is AASB 117 Leases is not
going to be relevant because of the introduction of AASB 16 Leases. Therefore, the second
objective of this report is to shed lights on the new changes that the accounting authorities
have brought in AASB 16 Leases. The third objective of this report is to discuss about the
lease accounting of Whitehaven Coal.
1. Concepts of Accounting
Whitehaven Coal has applied certain accounting concepts in their annual report for
the year 2018 and these are discussed below:
Concept of Business Entity – The annual report and the financial as well as non-financial
information provided in it about Whitehaven Coal is at the name of the company that is
Whitehaven Coal (whitehavencoal.com.au, 2019). The demonstrates the inclusion of business

ADVANCED FINANCIAL ACCOUNTING3
entity concept in the annual report of Whitehaven Coal that states the business owners need
to treat the business transactions separately (Birt et al., 2019).
Concept of Money Measurement – The annual report for the year 2018 of Whitehaven Coal
includes the values or amounts of all the financial transactions which can be seen in the
financial statements like income statement, balance sheet and others (whitehavencoal.com.au,
2019). This supports the money measurement concept of accounting which states that the
financial statements only keep thee business transactions that can be articulated through
monetary values (Needles, Powers & Crosson, 2013).
Concept of Going Concern – The consolidated statement of financial position of
Whitehaven Coal includes information on total assets and total liabilities; and it is visible that
total current assets and total assets are more than total current liabilities and total liabilities
(whitehavencoal.com.au, 2019). The key motive of Whitehaven Coal to disclose this
information is the application of the concept of going concern discusses about a firm’s ability
to continue as a going concern for unexpected future (Read & Yezegel, 2018).
Concept of Cost – In Whitehaven Coal, there are certain fixed assets like property, plant and
equipment whose measurement has been done at cost basis while considering depreciation
and impairment losses (whitehavencoal.com.au, 2019). This is the proof of the application of
cost concept in Whitehaven Coal’s annual report that says original cost needs to be
considered for recording the fixed assets (Inman, 2014).
Concept of Accounting Year – Whitehaven Coal’s annual report for 2018 covers the period
commencing from 01/07/2017 to 30/06/2018 (whitehavencoal.com.au, 2019). This supports
the application of the accounting year concept which states a specific time needs to be chosen
by the corporations for completing a business cycle (Gupta, 2016).