Financial Reporting & Prudence
Added on 2020-03-13
21 Pages1880 Words139 Views
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Contemporary Issues in Accounting1
Executive SummaryThis report has analyzed and examined the compliance of AASB standards by the ASXlisted companies that are. AGL Energy and Origin Energy Ltd, this has been done in order toensure that Australian listed companies develops their financial reports as per the AASBstandards in order to meet the needs of end-users of financial reports This is necessary formaintaining prudence of transparency in the accounting practices. The report emphasizes on theneed of complying with the conceptual accounting framework by businesses globally forenhancing the usefulness of financial reports for decision-making purposes. 2
ContentsIntroduction.................................................................................................................................................4AGL Energy Ltd............................................................................................................................................4Compliance with AASB standards as per Conceptual accounting Framework Requirements.................4Auditor’s Declaration...............................................................................................................................6Financial Statement Analysis...................................................................................................................7Income Statement- Screenshot...............................................................................................................7Income Statement- Analyses...................................................................................................................8Findings:..............................................................................................................................................8Income Statement- Graphical analyses...................................................................................................8Consolidated Position of Financial Statement- Analyses:......................................................................10Findings:-..........................................................................................................................................10Consolidated Position of Financial Statement- Graphical presentation................................................10Recommendations:................................................................................................................................11Origin Energy.............................................................................................................................................11AASB Compliance..................................................................................................................................11Future Compliance................................................................................................................................13Auditor’s Declaration.............................................................................................................................13Financial Statement Analysis.................................................................................................................15Income Statement- Screenshot.............................................................................................................15Income Statement- Analyses.................................................................................................................15Findings:............................................................................................................................................16Income Statement- Graphical analyses.................................................................................................16Consolidated Position of Financial Statement- Screenshot...................................................................17Consolidated Position of Financial Statement- Analyses:......................................................................18Findings:-..........................................................................................................................................18Consolidated Position of Financial Statement- Graphical presentation................................................18Recommendations:................................................................................................................................19Prudence Inclusion in Conceptual Framework..........................................................................................19Recommendations.....................................................................................................................................193
Conclusion.................................................................................................................................................19References.................................................................................................................................................204
IntroductionThe present report aims to analyze the compliance of conceptual framework and AASBstandards by tow of the Australian companies registered on ASX. The selected companies areAGL Energy and Origin Energy Ltd operating in the energy sector of Australia. The report, inthis regard, evaluates the general purpose financial statements of both the companies foranalyzing the compliance of these statements as per the conceptual accounting framework. Forthe purpose, the report examines the conceptual framework of accounting for both the companiesby taking into consideration prudence theory. The analyses of compliance with AASB standardsby both the companies have been done in the report by extracting the screenshot from their latestannual financial reports. AGL Energy LtdCompliance with AASB standards as per Conceptual accounting Framework RequirementsAs analyzed from the director’s report of the company, it implements and adopts AASBstandards in preparation of its financial statements (AGL Energy Limited: Annual Report,2016). The notes to financial sttaments of the company state the basis of preparation of accountsas per the AASB standards determined by the Corporations Act 2001.5
The company has also provided all the segment information as per the AASB standards(AGL Energy Limited: Annual Report, 2016). It has adopted the AASB 8 standards forreporting its segment information to its stakeholders as evident from the attached screenshot:The company as per the AASB 139 standards also incorporate the use of derivative financialinstruments for managing its exposure to interest rates and foreign exchange rates as evidentfrom the below screenshot of the annual report:6
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