Advanced financial accounting Name of the university Student ID

ADVANCED FINANCIAL ACCOUNTING ADVANCED FINANCIAL ACCOUNTING Advanced financial accounting Name of the student Name of the university Student ID Author note Introduction: 3 Discussion: 3 Description of accounting concepts: 3 Conceptual framework and the issue of measurement: 6 Fundamental qualitative characteristics: 9 Conclusion: 10 Introduction: The report is prepared to gain an understanding of the theoretical concepts of accounting with reference to the financial reporting issues of the listed organization in accordance with the AASB standards. The evaluation of the accounting concepts is done from of the

Running head: ADVANCED FINANCIAL ACCOUNTING
Advanced financial accounting
Name of the student
Name of the university
Student ID
Author note

ADVANCED FINANCIAL ACCOUNTING
Table of Contents
Introduction:..................................................................................................................3
Discussion:...................................................................................................................3
Description of accounting concepts:.............................................................................3
Conceptual framework and the issue of measurement:...............................................6
Fundamental qualitative characteristics:......................................................................9
Conclusion:.................................................................................................................10

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Introduction:
The report is prepared to gain an understanding of the theoretical concepts of
accounting with reference to the financial reporting issues of the listed organization
in accordance with the AASB standards. The basis of preparing the financial
statements, estimates and accounting is dependent upon the accounting policies
and concepts that are used by the organization. The evaluation of the accounting
concepts is done from of the chosen companies from that ASX that is Atlas Arteria
FP Ordinary Stapled Securities which is a global developer, investors and operator
of infrastructure. The objective of the company is to provide investors with the
exposure of global portfolio of toll roads that helps offer resilient long term
performance and cash flow through economic cycles (Atlasarteria.com 2019). The
conceptual framework and the issues of measurement faced by the organization in
preparing the financial report are also demonstrated in the report. In addition to this,
the report also addresses the understanding of the qualitative characteristics of
financial reporting that includes relevance and faithful representation.
Discussion:
Description of accounting concepts:
In this section, the concepts of accounting have been outlined that helps in
critically estimating the accounting treatment concerning the significant events of the
organization. Accounting concepts can be defined as the set of rules that are
followed by every organizations in determining the estimated and assumptions for
preparing the financial report. The chosen organization for which the concepts of
accounting have been illustrated is Atlas Arteria FP Ordinary Stapled Securities and

ADVANCED FINANCIAL ACCOUNTING
the management of the organization is required to indentify the critical estimates and
the judgment when preparing the financial report. For preparation of the financial
report, the company has adopted certain accounting policies in accordance with the
requirement of the accounting standard board of Australia. There is a cooperation
deed into which ATLAX has entered that helps in adoption of consist accounting
policies However, the key decision is still reserved to the board of the company. The
relevant notes of the organization presented in the financial report include the
significant accounting policies, estimates and key judgments. The financial report of
the Atlas Arteria is prepared in accordance with AASB that requires the management
to use certain critical estimates. In addition to this, the application of the accounting
policies is done by exercising of judgments by the directors. Such judgment might
carry the risk of causing a material adjustment to the carrying amount of liabilities
and assets with all such materiality discussed in the notes to financial statements
(Andon et al. 2015). \
For the financial year 2018, the group has adopted AASB 15 that has an
impact on the analysis of the adjustments to the amounts that is recognized in the
financial report along with the accounting policies. The associated accounting
policies have been changed wherever it is required for ensuring that such policies
are consist with the group.
The financial position and the results of group of entities having functional
current that is different from the present currency are translated in the current
currency using particular accounting policies. The translation of liabilities and assets
for each statement of the financial position is done at the closing rate at the date
when financial statement is prepared. In addition to this, translation of expenses and
income for each statement of comprehensive income is done at the exchange rate or

ADVANCED FINANCIAL ACCOUNTING
at an average rate that is appropriate at the transactions date (Ellwood and
Greenwood 2016). Furthermore, it is observed from the annual report that from 1st
January, 2018 the group has adopted ASSB 9 which resulted change in the analysis
of possible adjustments to the amount that have been recognized in the financial
statements and accounting policies. The balance sheets as on 31st December, 2017
do not reflect the adjustments and reclassification according to the traditional
provisions in AASB 9. However, such adjustments are recognized in the opening
balance sheet as on 1s January, 2018 (Atlasarteria.com 2019).
Some other accounting policies that are adopted by the organization is
regarding lease. The measurement of liabilities and assets that is arising from lease
is done initially at the net present value according to AASB 16. The interest rate
implicit in the lease are used for discounting lease payments and the leases of the
group is materially denominated in the foreign currencies (Atlasarteria.com 2019).
The standard is applicable from the current year that will measure the right of use
assets for leases on the transition. Some examples depicting the measurement basis
and accounting policies or certain accounts are as follows:
Income tax- The balance sheet method is used by the organization for
determining the deferred income tax and then recognition of deferred tax assets are
done for used tax losses and deductible temporary differences only when such
temporary differences and losses being utilized by the future taxable amount. The
tax rate is used for determining the deferred income tax that has been enacted by
the date of balance sheet (Henderson 2015).
Goodwill- Goodwill that arises from the business combination in included on
the financial statement face and they are tested on annual basis for the purpose of

ADVANCED FINANCIAL ACCOUNTING
impairment when there is an indication that the carrying amount cannot be
recovered. Determination of cash generating unit of goodwill is done on the basis of
fair value by deducting the cost of disposal calculations.
Revenue and contribution to profit- Revenue is recognized in accordance
with AASB 15 revenue from contracts with customers. All the current guidance on
the recognition of revenue from contracts is replaced by this accounting standard.
Recognition of revenue is done when the performance obligations are satisfied that
occur when the goods and services control are transferred to the customers
(Atlasarteria.com 2019).
Foreign currency transactions-The financial report of the items for each of
the group of entities are measured using the currency of the economic environment
in which entity is carrying out its operation.
GST- Recognition of the amount of GST is done as a part of the acquisition
cost of assets or an expense that is adjusted from the proceeds of the securities that
are issued.
Transaction cost- Recognition of the transactions costs related to the
business combination is done at the profit and loss. There is direct recognition of the
transactions cost that arises on issuing of equity instruments and the costs that
arises on borrowing are netted with the liability and are incorporated in the interest
expenses using the method of effective interest (Atlasarteria.com 2019).
Conceptual framework and the issue of measurement:
As stated in the conceptual framework, the principles of measurement are the
process of determining the numbers that are to be presented and disclosed in the

ADVANCED FINANCIAL ACCOUNTING
financial statements. It would be difficult for the organization to provide with all the
relevant information associated with the liabilities and assets using a single basis of
measurement. The financial reporting objectives and the qualitative characteristics
help in forming the basis of fundamental principles of measurement. The way in
which the impacts are created by the financial statements is dependent upon the
reliance if information that is provided by any particular basis of measurement. Fair
value, cash and measures of cash flow are the three categories of measurement that
has been recognized by the measurement methods (Atlasarteria.com 2019).
However, the single method of measurement is mandated under the revised
conceptual framework.
The conceptual framework is used by the organization in preparing the
financial report that is well aligned with the accounting policies along with interpreting
and understanding the standards. Comprehensive framework adopted by Atlas
Arteria FP Ordinary Stapled Securities is the set of comprehensive concepts of the
standard settings, guidance and financial report for developing the accounting
policies (Whittington 2015). For the purpose of financial reporting, a revised IFRS
(International financial reporting standard) conceptual framework is issued by IASB.
Such framework provides assistance to the standard setter in development of the
accounting standards along with helping them in accounting policies development in
the event when one particular issue cannot be addressed by the similar or specific
standard. Some of the amendments that were made in the revised conceptual
framework include the amendments in the recognition criteria and definition for
income, liabilities, assets, expenses and other relevant concepts of financial
reporting. For the group, the framework would be effective for the annual periods

ADVANCED FINANCIAL ACCOUNTING
beginning on or after 1st January, 2020 (Atlasarteria.com 2019). The timing of
adoption and the impact of the revised framework is being assessed by the group. In
addition to this, there are no other interpretations or standard that would have any
material impact on the future or current reporting period and are not yet effective.
The business model applicable to the financial instruments which is held by
the group is assessed on 1st January, 2018 and they have been classified according
to the categories of ASSB 9. The classification of financial liabilities and assets is
done in accordance with ASSB 9 and subsequently they are measured at either fair
value through profit and loss or at amortized cost. However, no changes were
witnessed in the measurement of the financial instruments of the group. The
measurement and classification of the financial liabilities and assets do not have any
impact on the statement of changes in equity and statement of comprehensive
income (Schaltegger and Burritt 2017).
Measurement basis of financial items:
Source: Atlasarteria.com 2019
Assessment of the fair value of the financial liabilities and assets are done in
accordance with the hierarchy of level 1, level 2 and level 3. In addition to this,

ADVANCED FINANCIAL ACCOUNTING
measurement of derivative financial instruments of AKX is done at fair value on a
recurring basis.
Financial instruments measurement basis
Source: Atlasarteria.com 2019
There are also some other financial instruments held by the group which is
not measured at the fair value in the balance sheet. There are no material
differences between the material value and fair value of the instruments and the ALX
group uses a method of discount cash flow analysis for determining the fair value of
the financial instruments. As on 31st December, 2017, the fair value of liabilities and
assets are approximated at their fair value.
Fundamental qualitative characteristics:
The IFRS revised conceptual framework provided by IASB lays down the
fundamental quantitative characteristics of faithful representativeness and relevance
in preparing the financial statements. These two qualitative characteristics help in
determining the usefulness of the financial information that is prepared in the

ADVANCED FINANCIAL ACCOUNTING
financial report of the organization. The correspondence or agreements between
accounting numbers, significant transactions or events that purports to be
represented is identified by the representational faithfulness. Relevant on other hand
is the criticality and usefulness of the financial information that assist the investors in
their decision making process. The former helps in determining financial information
reliability which must be verifiable and neutral. Representativeness and faithfulness
are the phenomenon that might change due to occurrence of any transactions is to
be represented according to the representative faithfulness (Nobes and Stadler
2015).
Atlas Arteria FP Ordinary Stapled Securities has represented the financial
information in accordance with the relevant accounting standard and that are
relevant to the specific treatment and accounts. Users of the financial statement are
able to predict the past, future and present events using the relevant financial
information presented in the financial report and contribute to the decision taken by
the users. Materiality is one of the specific aspects of relevance that is based on
nature and magnitude of items in the financial report of the entity (Schaltegger and
Burritt 2017).
From the analysis of the financial report of Atlas Arteria, it is inferred that the
financial statements presents a true and fair view about the financial position of the
entity. All the relevant exceptions and implications are presented in the report
against the three principles. The portfolio companies of the group have adopted the
risk management framework for ensuring that they comply with the relevant
regulations and standard. All the key judgment, estimates and the accounting
policies have been explained in the relevant notes. In addition to this, the amounts
presented in the relevant entities financial report is reflected by the financial

ADVANCED FINANCIAL ACCOUNTING
information disclosed in the annual report. The impact of the relevant accounting
standard and its interpretation that has not been adopted is assessed by the group
so that the users are provided a clear and clarified view on the estimates and the
assumptions involved in the computations or valuation (Apostolo et al. 2017). It is
also mentioned in the annual report that the users have reasonable ground to
believe in the ability of Atlas Arteria to make its debt payment as and when they will
fall due and become payable. The enhancement of the information relevance in the
financial report can also be determined by the opinion of the auditors on the financial
statement of the group. They have formed an opinion that the financial statement of
the group presents a true and fair view about the financial performance of the group.
It is so because they have also provided reasonable assurance about the fact that
the financial statements are free from materiality or misstatements. Moreover, any
accounts that are considered material and might have significant influence on the
economic decisions of the users are considered by the auditors for evaluation and
are recognized as key audit matters in a separate section. This must be considered
by the auditors when making investment decisions. All the financial information and
the accounting treatment of the specific transactions relating to the account are done
in accordance with the applicable accounting standards AASB and IFRS (Dyckman
and Zeff 2015). There seems to be consistency between the qualitative
characteristics of relevance and faithful representative with the factors that are used
in the basis of measurements. However, the relevance of information is influenced
by the characteristics of liabilities and assets and their contribution to the cash flow.
The faithful presentation of the information is affected by the inconsistency or
uncertainty which the basis of measurement provides. The faithful representation of
financial information is not impacted as any uncertainty or inconsistency has not

ADVANCED FINANCIAL ACCOUNTING
been identified. Therefore, from the analysis of the facts presented on the financial
information, it can be inferred that the financial information complies with the
qualitative characteristics of relevance and faithful representation (Gaynor 2016).
This is so because the financial report of the organization provides sufficient reason
ground that might create any impacts on the accounts that are relevant for the
investors and users of financial statements.
Conclusion:
The report has been prepared to address the measurement basis and
accounting policies adopted by Atlas Arteria FP Ordinary Stapled Securities.
Evaluation of the accounting concepts and the measurement basis of the accounts
are done by analyzing the facts and figures presented in the financial report
published by organization. From the analysis of the financial report of the company, it
was ascertained that the preparation of the financial statements and accounting
treatments of specific accounts are done according to the applicable and relevant
accounting standard. In addition to this, it has been found that the revised conceptual
framework is adopted in the current year; however the impact of revised framework
is being assessed by the group. Furthermore, the company has made a fair
representation of the financial information that is relevant for the users in making
decisions.

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