Advanced Financial Accounting: Qualitative Aspects, Government Regulations, and Asset Revaluation

Running head: ADVANCED FINANCIAL ACCOUNTING
Advanced Financial Accounting
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1ADVANCED FINANCIAL ACCOUNTING
Table of Contents
Question Part A....................................................................................................................2
Question Part B....................................................................................................................4
Question Part C....................................................................................................................6
Question Part D....................................................................................................................7
Section a...........................................................................................................................7
Section b..........................................................................................................................8
Section c...........................................................................................................................8
References..........................................................................................................................10

2ADVANCED FINANCIAL ACCOUNTING
Question Part A
The conceptual framework developed by “Australian Accounting Standards Board
(AASB)” indicates that there are two qualitative aspects related with the financial reporting that
are enhancing as well as important (Abdel-Maksoud, Cheffi and Ghoudi 2016). The fundamental
qualitative characteristics are deemed to be relevance as well as faithful representation along
with improving the qualitative aspects. Such features include timeliness, comparability
understandability as well as verifiability. The financial statements value is enhanced in the
existence of mentioned qualitative aspects for the users of the financial statements. The vital
users of these statements include borrowers, investors, creditors and a few more. The explanation
under indicates absence of qualitative aspects within the framework of financial reporting
framework explained in the IFRS (Birkland 2015).
Every financial statement is necessary in attaining suitable qualitative aspect of
understandability as such feature might improve the quality of overall financial statement. In
addition, at the tine such aspect is present within the financial statements, it turns out to be
simple for the users to classify overall financial information for the reason that depiction is made
in a way that information concerning the recent financial position of the companies is offered to
them. From the statements presented by finance head of AXA “Geoff Roberts”, the investors of
the companies totally depend on the management report for obtaining suitable understanding of
financial situations (Camfferman and Zeff 2015). Considering the same, the individual has
indicated that there is less understandability factor present within the company’s financial
statements developed in alignment with the IFRS. The complexity within financial statements
might be recognized to be the major cause behind IFRS implementation. Conversely, it fails to

3ADVANCED FINANCIAL ACCOUNTING
offer necessary understandability factor within the company’s financial statements. Focused on
this, it might be gathered that financial statements must have qualitative aspect of comparability
and it is deemed to be an aspect of improving the qualitative characteristics. The function of this
feature is to facilitate the users in recognizing the similarities and differences in the company’s
financial statements (Villiers, Rinaldi and Unerman 2014). Considering the viewpoint presented
by Terry Brown of Wesfarmers Limited, the financial analysts deal with the difficulties in
analyzing the financial notes explained within financial statements of companies as this might
interpret them because of lack in necessary technical know-how. Such situation indicates that the
users of the financial statement need to include significant financial account based technical
know-how. This is to make sure that financial notes might be developed in compliance with
IFRS that can be easily interpreted. Hence, it might be stated that understandability and
comparability is not present within financial statements developed under IFRS.
Faithful representation is deemed as a considerable qualitative aspect as it facilitates in
offering useful financial information to the financial statement users. In addition, this specific
aspect makes sure in confirming financial statements with the necessary principles and standards
of accounting. Focused on viewpoint presented by David Craig “CEO of Commonwealth Bank”,
the suitable overview of the company’s real financial situation might not be offered with support
of financial statements developed in IFRS framework confirmation (Dutta and Patatoukas 2016).
This has been the major cause for which investors might be suitable consideration of annual
report in attaining important information for attaining suitable investment decisions. This
explains the fact that faithful representation is not maintained in the company’s annual report as
the absence of compliance does not offer better insight regarding the company’s financial
situation. However, in such situation where this aspect is not present, it indicates that several