Contemporary Issues in Accounting: Analysis of Armour Energy's Compliance with Conceptual Framework

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
Name of the Student
Name of the University
Author’s Note

1CONTEMPORARY ISSUES IN ACCOUNTING
Executive Summary
The report aims at the analysis of various aspects of conceptual framework in respect to Armour
Energy. The first of the report involves in analyzingd the conformity of the company with the
measurement requirement of conceptual framework. The next parts of the report involves in the
analysis of the compliance of the company with both the fundamental and enhancing qualitative
characteristics of conceptual framework. The next part shows the credibility of the financial
statements of Armour Energy for the purpose of decision-making. The last part of the report
analyzes whether the users need more than basic accounting knowledge for analyzing the
financial statements of the company.

2CONTEMPORARY ISSUES IN ACCOUNTING
Table of Contents
Introduction......................................................................................................................................3
Measurement Requirement of Conceptual Framework...................................................................3
Compliance with the Fundamental Qualitative Characteristics.......................................................5
Compliance with the Enhancing Qualitative Characteristics..........................................................8
Use of the Report to Make Decisions............................................................................................10
Requirement of Basic Knowledge for the Analysis of the Company............................................14
Conclusion.....................................................................................................................................16
References......................................................................................................................................18

3CONTEMPORARY ISSUES IN ACCOUNTING
Introduction
It is needed for the companies to make necessary compliance with the accounting
standards and regulations at the time to conduct their financial reporting related operations. In
this manner, they are able to avoid the accounting and financial reporting related problems in
their business operations. This is also applicable for the Australian Securities Exchange (ASX)
listed companies as they are also needed to comply with the necessary standards of accounting
conceptual framework. In Australia, the presence of an accounting conceptual formwork can be
seen provide by International Financial Reporting Standards (IFRS) and the companies must
comply with the standards of this. The main aim of this report is to analyze and evaluate the level
of compliance with different segments of accounting conceptual formwork by one of the ASX
listed companies, Armour Energy.
Measurement Requirement of Conceptual Framework
According to the conceptual framework, it is needed for the companies to take into
account the measurement requirements in the process of financial reporting; and it is also needed
for Armour Energy to consider the same. They are discussed below.
According to the conceptual framework, the companies are needed to adopt two
measurement bases in order to report their assets and liabilities; they are Historical Cost and
Current or Fair Value (aasb.gov.au 2018).
According to the conceptual framework, an asset can be considered as a resource that the
business entities control and it develops as a result of the past event and from the future
economic benefits. On the other hand, liability can be considered as a present obligation of the