Conceptual Framework and Accounting Policies

This article discusses the compliance of a company with the measurement requirements and qualitative characteristics of the conceptual framework and accounting policies. It analyzes the preparation of financial statements, the relevance and reliability of the information, and the ability of users to make decisions based on the reports. The article concludes that the company has successfully complied with the conceptual framework and accounting policies, enabling users to make informed decisions.

Running Head: CONCEPTUAL FRAMEWORK AND ACCOUNTING POLICIES
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CONCEPTUAL FRAMEWORK

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Has the company complied with the measurement requirements of the conceptual
framework?
A conceptual framework is an analytical tool, with several with several variations and contexts.
To grab an overall picture of the company the conceptual framework is necessary. The best
feature of the conceptual framework lies in the fact that they process in the real manner to
capture it for the longer duration (Australian Accounting Standards Board, 2016). Info media
Limited Company it can be said that the company has carefully as well as successfully implied
the requirements successfully. Majorly the preparation of the annual reports is done on the basis
of the set directions and rules. In order to collect the information Info media have complied with
accounting financial standards. Not only this has the company followed the guidelines of the
IFRS medium, the company has also set the some of the financial and the accounting scenarios
according to the conceptual framework (Australian Stock Exchange, 2018).
Financial statements are generally prepared taking into consideration the objectives of the
conceptual framework as well as the guidelines of the IFRS in order to provide the reports to the

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investors, shareholders and creditors so that they can make the decisions in the most presentable
manner. This helps in analyzing the overall performance of the organization. The conceptual
framework has also been analyzed keeping in mind the external market factors of the company.
Henceforth from the entire analysis it can be stated that the company has presented the
statements in the most reliable manner and it’s quite satisfying (Australian Accounting Standards
Board, 2015).
Have they complied with the fundamental qualitative characteristics?
The financial statements of the Info Media Limited have thoroughly complied with the factors
and the characteristics of the qualitative nature. Few of the factors have been discussed below
(Australian Accounting Standards Board, 2016).
Relevance
The relevance is one of the most important critical factors in building the relationships with the
stakeholder. The annual report of the Info media helps the stakeholders to take the decisions on
the basis of the figures provided in the balance sheet as well as the income statement. At the
same time the relevant evidence must also be catered to the investors so that the decision can be
taken quickly.
Reliability
Reliability of the financial representation depends upon the recording of the financial and the
non-financial information. This is also related to the different type of the risks the company is
involved with. In case of the Info Media Limited it can be observed those new policies and the

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procedures as well as the changes in the operations which have been made have been carefully
listed in the annual report of the Info Media Limited.
Have they complied with the enhancing qualitative characteristics?
Info media Limited has complied with various qualitative characteristics which have been
outlined below, in order to enhance the conceptual framework.
Timeliness
The concept of the timeliness states that all the necessary as well as the subsequent information
shall be catered in time as this will help the investors in taking the important decision. By
observing the annual report of the Info media have complied with the timeliness and defined all
the relevant information on time.

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Understandability
The scenario of the understandability provides the crisp and the crystal information on time. This
not only builds the level of the trust among the stakeholders but also offers them the information
in the hand in the precise manner so they can avail the benefits of the information in short span
of time and this parameter also makes sure that the financial statements are prepared in such a
manner that are easy to understand and one can easily comprehend the meaning of the figures.
Offering the transparent information supports the investors to analyze the current situation and
relatively find out the means to improve the same. The annual report of the Info media helps the
stakeholders to take the decisions on the basis of the figures provided in the balance sheet as well
as the income statement. At the same time the relevant evidence must also be catered to the
investors so that the decision can be taken quickly (Info Media Limited, 2018).
Comparability
The statements shall be made of such a type that there is a base to compare them either with the
previous year or with the industry benchmarks (Australian Accounting Standards Board, 2015).
The comparison of the financial statements also helps the investors to get an idea of the current
as well as the future trends of the company. Based on that information the company can easily
predict and compare the data and analyze the position of the company and the example of the
comparability situation has been outlined below (Info Media Limited, 2018).

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Are the users of financial reports (investors/potential investors/lenders/other creditors)
able to use the report to make decisions?
Yes, there are different users of the financial reports and they are able to use the report for the
purpose of the decision making. Generally the investors are interested in the profitability of the
business and how much share they are going to get in return. This can be clearly reflected from
the income statement presented in the annual report of the Info media Limited. The annual
reports also mentioned that the investors must rely upon the statutory accounts for the purpose of
the investment in the company (Info Media Limited, 2018).
The creditors on the other hand are interested in the overall performance and at the same time
how well, the company is able to pay back to the creditors. The higher the ability the more will

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be the opportunities for the company to provide the goods and the services on credit to the
customers. The financial reports provide the information with respect to the cash flow cycle as
well. The better the cash flow cycle will be the more the creditors will be assured by the reports
of the info media Limited. The accounts payable ratio of the Info media limited is 26.57 for the
financial year 2018 therefore it can be stated that the creditors have the availability and excess to
the financial reports to prepare their decisions (Info Media Limited, 2018).
The conceptual framework says users only need a basic knowledge of accounting - do they
need more than this to analyses your company.
Only the basic literal knowledge is required in case of the financial statements as there is some
critical information for which the management is liable to share the important information. The
users require the information and the supportive documents in each manner as they do not
possess the technical mind to analyze the same, therefore, the users shall not be disclose with all
the information. This will only create confusion in their minds and they won’t be able to make
the decision carefully (Australian Accounting Standards Board. 2015).
At times the figures are not enough to provide the entire data and the reasons behind the choice
hence, the management shall provide all the supporting evidences with to give the excess to the
complete picture. Therefore it can be stated that the users generally do not require the in-depth
knowledge of the accounting and the regulatory framework (Australian Accounting Standards
Board, 2018).
In case of the Info Media, there are tables, notes to accounts, explanation wherever there is any
complexity. The figures are presented in the income statement, balance sheet as well as the cash
flows.

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Have they met the requirements for general purpose financial reporting?
The core objective of the general purpose financial reporting practice, as stated by the Australian
Accounting Standards Board is to be relevant so that it becomes more important for the
stakeholders to make the necessary and the important decisions. There are many users of the
financial statements and they have their own relevant purpose for the usage of the financial
statements. Also in the view of AASB 101, it stated that, in order to make the information
relevant and comparable it must comply with AASB 101 (Australian Accounting Standards
Board, 2015). Therefore it is the duty of the management to create the several techniques to keep
the fair and the true presentation of the financial statements. Also, while going through the
overall analysis of the presentation of the financial statements the Info Media has complied with
the requirements in the appropriate manner (Australian Accounting Standards Board, 2016).
Conclusion
As per the discussion carried over in the previous parts there is a necessity on the part of the
management to comply with the conceptual framework and it becomes mandatory while
preparing the financial statements of the business. On evaluation and the observation it can be
stated that Info Media Limited has not only complied successfully with the concepts and the
theoretical framework but also assessed in the legal and the regulatory matters. This eventually
helps the various users of the financial statements to take the major business decisions.

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References
Australian Accounting Standards Board. (2015) Conceptual Framework for Financial Reporting
[online] Available from: https://www.aasb.gov.au/admin/file/content105/c9/ACCED264_06-15.
[Accessed on 16th April 2019].
Australian Accounting Standards Board. (2016) Framework for the Preparation and Presentation
of Financial Statements. [online] Available from:
https://www.aasb.gov.au/admin/file/content105/c9/Framework_07-04_COMPjun14_07-14.pdf
[Accessed on 16th April 2019].
Australian Accounting Standards Board. (2018) Objective of General Purpose Financial
Reporting. [online] Available from: https://www.aasb.gov.au/admin/file/content102/c3/SAC2_8-
90_2001V.pdf [Accessed on 16th April 2019].
Australian Stock Exchange. (2018) Review of the ASX Corporate Governance Council’s
Principles and Recommendations. [online] Available from:
https://www.asx.com.au/documents/regulation/Australian-Accounting-Standards-Board.pdf
[Accessed on 16th April 2019].
Info Media Limited, (2018) Annual report Available from
https://www.infomedia.com.au/files/investors/FY18-AnnualReport.pdf [Accessed on 16th April
2019].