Accounting Concepts and Relevance in AusNet Services Limited

ADVANCED FINANCIAL ACCOUNTING

AusNet
Executive Summary
The annual report of the company is a mirror wherein the actual position of the company can
be viewed. Hence, the annual report must comprise all the relevant information that helps in
defining the business. The present report is concerned with the company named AusNet
services Limited. The report is segregated into three major parts that are the identification of
the accounting concept uses, the adherence to the conceptual framework and the fundamental
characteristic of relevance and representational faithfulness. The overall analysis of the
company with the help of the annual report represents the fact that the organization provides
relevant information and hence, it assists the users in the process of decision making.
2

AusNet
Contents
Introduction...........................................................................................................................................4
1. Accounting concepts that were used..............................................................................................4
2. Measurement issue with an example...............................................................................................5
3. Relevance and representational faithfulness....................................................................................6
Conclusion.............................................................................................................................................9
References...........................................................................................................................................10
3

AusNet
Introduction
AusNet Services is an Australian company that currently owns and operates electricity and
gas network resources worth not less than AUS $11 billion. The Australian company is into
the distribution of gas and electricity resources and has a consumer base of at least 1.4
million (AusNet., 2018). The company has a total workforce of around 1,900 personnel at
present. The company aims at the preservation of natural resources and for this purpose, the
same has taken necessary initiatives by allowing its consumers to regulate their overall
energy usage. AusNet Services preaches its consumers and therefore, keeps their wellness as
a priority always (AusNet., 2018).
The Board approved the consolidated financial statements of the aforesaid company and its
subsidiaries on May 13, 2018. These statements were projected in Australian dollars and
were developed by a for-profit company. The financials of the company were made in full
adherence to all the necessary accounting standards. As per the business activities and the
financial performance of the AusNet Services, it can be said that the company has a long way
to go and it is most likely to accomplish all its long term goals. The company has cash in
hand of $658.2 million and bank debt of around $545.5 million as of March 31, 2018
(AusNet., 2018). The future of the AusNet Services seems really bright and the company
shall continue to rise and shine in the same way if it chooses to operate ethically just like the
way it has been doing all this time.
1. Accounting concepts that were used
There are various concepts used for accounting purposes. However, there are certain concepts
that are the basis of accounting. These are consistency, the principle of objectivity, matching,
and revenue recognition.
The financials of an organization must always reflect the utmost transparency. The
facilitation of transparency in the financial statements of an organization will always ensure
that there is a representation of the true and fair view of its actual state of affairs. The
principle of objectivity is a very important accounting concept. It not only benefits the
readers of the financial statements but also benefits the organization in the long-term. The
management of an entity must always ensure that the financials of the same are prepared
ethically and there is a clear projection of the true and fair view of its actual well being. The
4