Advanced Financial Accounting Overview

Running head: ADVANCED FINANCIAL ACCOUNTING
ADVANCED FINANCIAL ACCOUNTING
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ADVANCED FINANCIAL ACCOUNTING
Executive Summary
The aim of the study focusses on the reporting entity concept which is related to the
differential reporting method that is used in Australia. The approach of the study is to develop
an in-depth understanding of concept related to financial accounting to provide information to
the users of the financial statements. The study also reflects the criteria of a reporting entity
along with the identification of Bellamy’s Australia Limited as a reporting entity. Lastly, the
report concludes that relevance and representational faithfulness are the fundamental
qualitative characteristics recognized in the IASB Conceptual Framework for financial
reporting in relation to the useful details of the financial statements and in order to be useful,
the information of the financial statements must be relevant along with its represent
faithfulness in terms of the circumstances it imparts to represent.

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ADVANCED FINANCIAL ACCOUNTING
Table of Contents
1. INTRODUCTION..................................................................................................................3
2. DISCUSSION........................................................................................................................3
2.1 Reporting entity concept..................................................................................................3
2.2 Criteria of a reporting entity.............................................................................................4
2.3 Identification of the reporting entity................................................................................6
2.4 Qualitative Characteristics of useful financial information.............................................7
2.4.1 Relevance..................................................................................................................7
2.4.2 Faithful Representation.............................................................................................8
3. CONCLUSION......................................................................................................................9
References................................................................................................................................11

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ADVANCED FINANCIAL ACCOUNTING
1. INTRODUCTION
The reporting entity concept has been the beginning of different reporting system in
Australia. These organizations have been mend mandatory to provide financial reports based
on “Generally Accepted Accounting Principles” or GAAP while other non-reporting
organizations are not adhering to follow such principles and provide ‘Special purpose’
reports. Moreover, Statement of Accounting Concept (SAC) 1 has set out the concept for
providing information to the users along with the area of general purpose financial reports
(Handley, Wright and Evans 2018). In other terms, the group of organization which are stated
under this concept can include organization having the existence of users depending on the
financial statement report for their decision making regarding resource allocation. It can be
also noted that the reporting entity concept is not dependent on the different sectors under
which the organization is operating. It simply involves all entities with the users depending
on the financial statement report for their decision making.
2. DISCUSSION
Bellamy’s Australia Limited is an organization, that provides infant nutrition and food
brand throughout Australia and China. The organization deliver more than 40 products which
covers organic food, infant milk formula and toddler milk
(Investors.bellamysorganic.com.au. 2020). They do have a direct channel with the consumers
that does have an Australian label products and are supplied through the Australian
supermarkets and retailers of pharmacy.
2.1 Reporting entity concept
Reporting entity concept defines as an entity where different users such as employees,
staff members, departmental staffs, borrowers, investors and shareholders can rely on the