Contemporary Issues in Accounting - Lovisa Holdings Limited

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary issues in accounting
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1CONTEMPORARY ISSUES IN ACCOUNTING
Executive summary
The report will focus on the conceptual framework requirement and whether it is properly
followed by fashion jewellery retailer Lovisa Holdings Limited. The report will further focus
on the recognition criteria used by the company for assets, liabilities, incomes, expenses and
equity. It will further analyse whether the company follows the qualitative characteristics of
conceptual framework while preparing their financial statement.

2CONTEMPORARY ISSUES IN ACCOUNTING
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Compliance to the conceptual framework for reporting........................................................3
Recognition criteria................................................................................................................4
Qualitative characteristics......................................................................................................9
Conclusion................................................................................................................................11
Recommendation......................................................................................................................12
Reference..................................................................................................................................13

3CONTEMPORARY ISSUES IN ACCOUNTING
Introduction
Lovisa Holdings Limited operates its business as the retailer of fashion jewellery. It
develops, designs, merchandises and sources fashion jewelleries and accessories under the
name of Lovisa brand for the females those are conscious regarding fashions and aged
between 25 and 45. The company operates its business all over New Zealand, Australia,
Malaysia, United Kingdom, South Africa and Singapore. Further, it has franchised stores in
UAE, Kuwait, Bahrain, Oman and Saudi Arabia (Lovisa, 2018). The report will depict
whether the company is following the framework of corporate reporting. The report will
further focus on the recognition criteria of assets, liabilities, incomes, expenses and equity.
Finally the report will verify financial report’s qualitative characteristics to evaluate whether
the information presented in understandable, verifiable and timely manner.
Discussion
Compliance to the conceptual framework for reporting
Consolidated financial statements of Lovisa Holding Limited and the associated notes
are prepared in compliance with International Financial Reporting Standards (IFRS),
Australian Accounting Standards (AASBs) including the Australian Accounting
Interpretations and adopted by Australian Accounting Standards Board (AASB) and
Interpretations issued by International Accounting Standards Board (IASB). The company
adopted all amended and new Accounting standards and the interpretations released by
AASB relevant to the company’s operations (Bebbington and Larrinaga, 2014). Further,
while preparing the consolidated statements the management of the company has made
various judgements, assumptions and estimates that have an impact on the application of the
accounting policies and reported amounts for income, expenses, liabilities and assets.