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ACCT 3003 - Contemporary Issues in Accounting BHP Billiton & Woolworths

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University of South Australia

   

Intermediate Accounting I (ACCT 3003)

   

Added on  2020-03-04

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The below  given report critically analysing the latest annual reports of BHP Billitonand Woolworths in order to determine, if the various accounting policies utilised in the representation of the financial statements tend to comply with the conceptual framework and also the appropriate AASB standards or not

ACCT 3003 - Contemporary Issues in Accounting BHP Billiton & Woolworths

   

University of South Australia

   

Intermediate Accounting I (ACCT 3003)

   Added on 2020-03-04

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ACCT 3003 - Contemporary Issues in Accounting BHP Billiton & Woolworths_1
CONTEMPORARY ISSUES IN ACCOUNTINGExecutive SummaryThe given report has the aim of critically analysing the latest annual reports of BHP Billitonand Woolworths in order to determine if the various accounting policies utilised in therepresentation of the financial statements tend to comply with the conceptual framework andalso the appropriate AASB standards or not. In this endeavour, the focus is essentially onhighlighting few pivotal components of the financial statements and compares the actualpolicy with the expected policy. Further, the role and introduction of prudence in theconceptual framework has been highlighted coupled with the inherent incompatibility withneutrality and the likely implications of prudence on corporate reporting. Also, a comparisonhas been drawn of the disclosures in the annual reports of the given companies.1
ACCT 3003 - Contemporary Issues in Accounting BHP Billiton & Woolworths_2
CONTEMPORARY ISSUES IN ACCOUNTINGTable of ContentsIntroduction................................................................................................................................3Compliance with conceptual framework...................................................................................3BHP Billiton...........................................................................................................................3Woolworths............................................................................................................................7Role of Prudence........................................................................................................................9Comparison of disclosures.......................................................................................................10Conclusion................................................................................................................................11References................................................................................................................................112
ACCT 3003 - Contemporary Issues in Accounting BHP Billiton & Woolworths_3
CONTEMPORARY ISSUES IN ACCOUNTINGIntroductionConceptual framework is a useful tool which to ensure that corporate reporting for variousorganisations is not only at par but at the same time relevant for the users. The underlyingaim of deploying conceptual framework is to make sure that the accounting norms applied bythe firms are driven by the same uniform rules while maintaining the relevance of disclosuresfor various stakeholders particularly shareholders. Another utility of conceptual framework isthat it results in accounting standards harmonisation which makes comparison betweencompanies based in different geographies possible as the financial statements are driven bythe same underlying rules (Melville, 2013). In the Australian context, the conceptualframework given by the IASB (International Accounting Standards Board) is represented inthe applicable accounting standards that have been given by AASB or Australian AccountingStandards Board. This ensures that the results of the Australian listed entities can becompared with their counterparts elsewhere especially where conceptual framework is thesame and hence attracts foreign investors (Deegan, 2014).In wake of the above context, the underlying report aims to critically analyse the FY2016annual report for the two public listed companies namely BHP Billiton and Woolworths inorder to opine on whether the accounting standards deployed deploys the conceptualframework or not. Additionally, the scope of the report also includes a comparison of thenature of disclosures visible for the two selected companies. Besides, the addition ofprudence and subsequent modification of the conceptual framework and the potentialimplications for parity in corporate reporting has also been discussed.Compliance with conceptual frameworkAs outlined above, for the sake of this task, the selected companies are BHP Billiton(Mining) and Woolworths (Organised Retail – Supermarkets). The critical analysis of thecorporate reporting in relation to the various applicable aspects of the corporate reporting isoutlined below.BHP BillitonThe critical aspects worth discussing are highlighted above along with relevant extract fromthe annual report.PPE (Property, plant & Equipment) – ( Relevant Standard - AASB 116)3
ACCT 3003 - Contemporary Issues in Accounting BHP Billiton & Woolworths_4

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