Description of Accounting Concepts for Cleanaway Waste Limited

Running head: ADVANCED FINANCIAL ACCOUNTING
Advanced financial accounting
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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

ADVANCED FINANCIAL ACCOUNTING
Introduction:
The report elucidates the description of the accounting concepts for one of the
companies listed on Australian stock exchange. Every organization has some accounting
concepts that forms the basis of preparation and the financial statements, judgment and
estimates. For the purpose of analysis and conducting an evaluating of the accounting
concepts, the chosen organization is Cleanaway Waste limited which is a leading waste
management, industrial services and recycling company of Australia (Cleanaway.com.au
2019). The company is engaged in delivering range of solutions that offers customers with
extraordinary benefits. In addition to this, the report also demonstrates the issue of
measurement and the conceptual framework that is adopted by the organization for the
presentation of the financial statements. The fundamental qualitative characteristics that
demonstrates the understanding of the representational faithfulness and relevance has also
been addressed in the report.
Discussion:
Description of accounting concepts:
This section outlines the concept of accountings that is used by the organization to
critically estimate the accounts and prepares the financial report. Accounting concepts are
basically the accounting rules that are followed by organization while preparing the financial
statements. The preparation of the financial report of Cleanaway waste limited requires the
use of certain critical accounting estimates for which the judgment is required to be exercise
by the management of organization in the process of applying the accounting policies. The
accounting policies that have been adopted by the company form the basis of preparation of
the financial report. At the time of preparation of the financial statement of the group, the

ADVANCED FINANCIAL ACCOUNTING
initial accounting for the business combination was not complete and accordingly there has
not been the disclosure of the details of the financial effect of the business combination.
The consolidated financial report of Cleanaway waste limited is a general purpose
financial report which has been prepared on a basis of going concern in accordance with the
Corporation Act, 2001, requirements of AASB (Australian accounting standard board) and
IFRS (International financial reporting standard). In addition to this, the financial report has
been prepared on the basis of historical cost expect for the derivative financial instruments
and certain noncurrent assets. The treatment of several financial items presented in the
financial statements such as revenue, finance cost, maintenance and repairs, impairment of
assets, foreign currency, trade receivables, property, plant and equipment, inventories, cash
and cash equivalent (Yurisandi and Puspitasari 2015).
Impairment of assets- For determining the objective existence of the impairment of
assets, assessment of the same is done and the losses on impairment is directly written off to
the consolidated income statement. The intangible assets and goodwill are assessed having
indefinite life are tested for the impairment on an annual basis. However impairment of other
assets is done when there is indication that the recoverable amount of assets is less than the
carrying value. Assets are grouped at the lowest level which are largely independent from the
cash flow and have separately identified flow of cash (Disle et al. 2016).
Inventories- Valuation of inventories is done at cost and net realizable value and the
inventories cost is based on the method that is appropriate for particular inventory class.
Costing of work in progress and manufactured inventories are done using an appropriate
share of production overhead that is based on the normal operating capacity
(Cleanaway.com.au 2019).