Analysis of Annual Report of Stockland Corporation Limited

Accounting Theory
Written Report – individual assessment
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Introduction
The present report is developed to provide an understanding of the process of general
purpose financial reporting followed by business corporations within Australia. In this context, it
has undertaken an analysis of the annual report of an Australian ASX 100 listed corporation and
has examined its adherence to AASB, true and fair, conceptual framework and corporations law.
The business entity selected for the purpose is Stockland Corporation Limited, an Australian
property development company listed on ASX. The financial performance of the company is also
compared with another entity listed on the ASX. The company selected for the purpose is
Scentre Group, an ASX listed real estate investment and development entity. At last, it provides
an analysis of the investment decision within the company on the basis of examining the annual
report information.
Critical Analysis of Annual Report of Stockland Corporation Limited
Stockland Corporation Limited, an Australian property development company traded on
ASX and is involved in developing of residential communities, shopping and industrial centers.
The company is listed on ASX and therefore develops its annual reports as per the accounting
policies and standards of AASB (Australian Accounting Standards Board). The financial report
of the company has included a statement of compliance for ensuring that the financial statements
are developed as per the AASB and IASB standards. AASB has directed all the ASX listed
entities to comply with the IASB standards for reporting of their financial information. IASB
requires the business entities to adopt the conceptual framework of accounting for reporting of
the financial information (Stockland: Annual Report, 2017). The conceptual framework of
accounting has provided the qualitative characteristics that the business corporations need to
comply during preparation of their financial reports. The fundamental qualitative characteristics
are relevance and faithful presentation of information while the enhancing characteristics are
comparability, verifiability, understandability and timeliness. As such, Stockland Corporation
also needs to follow these principles of conceptual framework of accounting in order to comply
effectively with AASB standards (Conceptual Framework for Financial Reporting, 2018).
As per the relevance characteristic of the conceptual framework of accounting, the
company needs to disclose relevant information to the end-users that is able to guide them in
their decision-making process (Stockland: Annual Report, 2017). The financial information can
said to be relevant when it has both predictive and confirmatory value. It is predictive if it is able
to make future predictions based on the past and present financial information and confirmatory
that represents the confirmatory position of a firm. The company has adopted the use critical
accounting estimates and judgments for predicting the value of key financial items that are based
on past information ad adjusted as per the current market conditions. The confirmatory value is
depicted with the use of key accounting policies to representing their real and fair value that is
disclosed in the notes to financial statement section (Gaffikin, 2003).
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The company as per the faithful presentation of information has included the auditor’s
declaration for ensuring that it is complete, neutral and error-free as depicted below:
(Source: Annual Report Stockland Corporation 2017)
The company according to the enhancing characteristic of understandability has
adequately disclosed the relevant accounting policies and methods adopted for measuring the
value of key financial items in the notes section as depicted below:
(Source: Annual Report Stockland Corporation 2017)
The financial information presented in the annual report of the company is also
comparable with that of the previous year as per the comparability characteristics of the
conceptual framework of accounting (Alexander and Archer, 2008). This will help in analyzing
the percentage financial growth realized by the company in comparison to the previous year as
depicted below:
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