Contemporary Issues in Accounting .

This report analyzes the compliance of Ark Mines Limited with the measurement requirements, fundamental and enhancing qualitative characteristics of financial reporting, and the requirements of general purpose financial reporting. It also assesses whether the users can use the financial information of Ark Mines Limited to make decisions.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
Name of the Student
Name of the University
Author’s Note

1CONTEMPORARY ISSUES IN ACCOUNTING
Abstract
The first part of the report analyzes the compliance of Ark Mines Limited with the measurement
requirements. The second and third parts of the report shows the analysis of the fundamental and
enhancing qualitative characteristics of financial reporting. The next part assesses whether the
users can use the financial information of Ark Mines Limited to make decisions. The last part of
the report analyzes the compliance of the company with the requirements of general purpose
financial reporting.

2CONTEMPORARY ISSUES IN ACCOUNTING
Table of Contents
Introduction......................................................................................................................................3
1. Measurement Requirements........................................................................................................3
2. Fundamental Qualitative Characteristics.....................................................................................5
3. Enhancing Qualitative Characteristics.........................................................................................7
4. Are the Users of Financial Reports Able to Use the Report to Make Decisions?.....................10
5. Requirement of Basic Knowledge.............................................................................................11
6. Requirements of General Purpose Financial Reporting............................................................12
Conclusion.....................................................................................................................................14
References......................................................................................................................................15

3CONTEMPORARY ISSUES IN ACCOUNTING
Introduction
At the time to conduct the business operations, the companies are needed to comply with
all the accounting as well as financial requirements of accounting conceptual framework. This
particular report is intending towards analyzing as well as evaluating all the requirements and
objectives of accounting conceptual framework in respect to one Australian company; and Ark
Mines Limited is taken into consideration. Some specific aspects on which the report puts
emphasis are the conceptual framework’s requirement for measuring assets and liabilities, both
fundamental and enhancing qualitative characteristics, fulfillment of the requirements of general
purpose financial reporting and others.
1. Measurement Requirements
In Australia, the companies are needed to follow the principles of accounting conceptual
framework provided by Australian Accounting Standard Board (AASB); and Ark Mine Limited
is also needed to follow the same. In case of the measurement requirement of the companies,
AASB conceptual framework puts the obligation on the firms to adopt the strategies of historical
cost method and fair value method (aasb.gov.au 2018). Moreover, Ark Mine Limited is also
needed to follow the recognition requirements of AASB conceptual framework. The following
discussion shows the compliance of Ark Mine Limited with the measurement requirements of
AASB conceptual framework (aasb.gov.au 2018).
(Source: arkmines.com.au 2018)

4CONTEMPORARY ISSUES IN ACCOUNTING
It can be seen from the above image that Ark Mine Limited has clearly mentioned their
compliance with the historical cost method for the purpose of measurement. Further evidence
can be seen from the following discussion.
(Source: arkmines.com.au 2018)
The above images indicates towards the fact that Ark Mines Limited has maintained their
compliance with the measurement requirements of AASB conceptual framework by adopting
historical cost method for the valuation of their business assets.
(Source: arkmines.com.au 2018)
The above figure shows that Ark Mines Limited has complied with the AASB conceptual
framework requirements by adopting fair value method for the valuation of liabilities.
In addition, as per the requirements of AASB conceptual framework, Ark Mines Limited
has recognized their assets in the balance sheet when it was probable that there would be future
economic benefit towards the company and the asset can be measured reliably. On the contrary,
the company recognized liabilities when it was probable that there would be outflow of future

5CONTEMPORARY ISSUES IN ACCOUNTING
economic benefit from the company and the cost of the liability can be measures reliably
(arkmines.com.au 2018).
2. Fundamental Qualitative Characteristics
The fundamental qualitative characteristics are Relevance and Faithful Representation;
and these are discussed below:
Relevance: Financial Statements are considered as relevant when they are able in making
positive impact on the decision-making process of the users (Barth 2013). The annual report of
Ark Mines Limited shows the presence of the required financial statements from which the users
can extract required financial information for decision-making; they are shows below:
(Source: arkmines.com.au 2018)

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The investors can obtain information about the financial performance of Ark Mines
Limited from the above statement.
(Source: arkmines.com.au 2018)
With the assistance of the above financial report, the users can assess the financial
position of the company over the year. In addition, the statement of change in equity helps the
users in assessing the change in the financial performance of the firm. All these statements
provide relevant information to the users.

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Faithful Representation: Financial statements of the companies become free from errors,
complete and neutral when they are faithfully represented; and the compliance with the required
regulations and standards of accounting conceptual frameworks ensures the faithful
representation of the financial statements as it assists the firms in reporting the material financial
information (Abernathy et al. 2014).
(Source: arkmines.com.au 2018)
The above image shows the compliance of Ark Mines Limited with the required
accounting standards of Australian Accounting Standards, AASB, Corporations Act 2001, IFRS
and IASB. These compliances have ensured the faithful representation of the financial
information of the firm.
3. Enhancing Qualitative Characteristics
The enhancing qualitative characteristics of financial reporting are Comparability,
Verifiability, Timeliness and Understandability; and these are discussed below:
Comparability: This characteristic provides the users with the scope to compare the financial
statements of one company with another company and different financial period of the same
company (Zhang and Andrew 2014).

8CONTEMPORARY ISSUES IN ACCOUNTING
(Source: arkmines.com.au 2018 and annualreports.com 2018)

9CONTEMPORARY ISSUES IN ACCOUNTING
The above images shows that the users can easily compare the financial statements of
Ark Mines Limited with Orica Limited, another company from the same industry. In addition,
the company has included the financial information of the previous year in the same statements
for the ease in comparison.
Verifiability: The users can ensure the faithful representation of the financial information from
directly or indirectly verify them with the application of knowledge and independent
observation. The users of Ark Mines Limited can verify the provided information in the financial
statements by recalculating them with the help of the provided inputs and disclosed financial
assumptions in the notes to the financial statements (Lawrence 2013).
Timeliness: The users must be able in obtaining the required financial information at the time of
decision-making process; and thus older information is less valuable to the users (Francis,
Pinnuck and Watanabe 2013). It can be observed from the annual report of Ark Mines Limited
that the company has published financial information for the most current years for the ease of
the decision-making of the users.
Understandability: The companies have the obligation to provide financial information on clear
and concise manner to make it understandable (Zeff 2013). It can be seen from the annual report
of Ark Mines Limited that the company has provided the required financial information in
simple format accompanied by the required justification and clarification as the form of noted to
the financial statements. All these aspects make the financial information of the company
understandable.

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4. Are the Users of Financial Reports Able to Use the Report to Make Decisions?
In order to able in using the financial information of a company, the users like investors
and potential investors must be able in obtaining the information from the financial statements.
In case of Ark Mines Limited, the presence of all the required financial statements can be seen in
their annual report which includes valuable information for the purpose of decision-making
(Pannicke, Berlinger and Dopf 2013).
(Source: arkmines.com.au 2018)

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According to the above images, the users can obtain information about various aspects
like revenue, expenses, profits and others of the company from the statement of profit and loss
and comprehensive income. After that, users can obtain information about the asset and liability
position of the company along with shareholder’s equity from the statement of financial position.
Then, the users can gain information about the company’s change in financial position and cash
position from the statements of change in equity and the statement of cash flows respectively.
Thus, based on this discussion, it can be said that the users are able to use the reports of the
company to make decisions.
5. Requirement of Basic Knowledge
As per the earlier discussion, the users of the financial statement can gain all the required
information for the analysis of the financial position of Ark Mines Limited. In addition,
compliance of the company with the standards of IASB and IFRS makes it easily understandable
for the users to assess the financial statements in the presence of basic knowledge of accounting
(Bentley, Omer and Sharp 2013). However, in this context, it needs to be mentioned that there
are certain items in the annual report of the company that require the opinion of the advisers to
be understood; like foreign currency transactions, financial risk management and others as these
aspects need advanced level of accounting knowledge

12CONTEMPORARY ISSUES IN ACCOUNTING
(Source: arkmines.com.au 2018)
6. Requirements of General Purpose Financial Reporting
Business organizations issue the general purpose financial reports to the investors and
lenders; and the main reason for their issue is to discern the financial condition and results of the
companies (Kim, Kraft and Ryan 2013). Thus, the main requirement is to provide certain
financial statements; they are income statement, balance sheet, statement of cash flows,

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statement of shareholder’s equity and the notes to the financial statements. Followings are the
provided financial statements by Ark Mines Limited.
(Source: arkmines.com.au 2018)

14CONTEMPORARY ISSUES IN ACCOUNTING
It can be seen from the above images that Ark Mines Limited has complied with the
requirements of general purpose financial reporting by polishing the required financial
statements with the aim to provide information about the financial performance, financial
position, cash position and change in financial position. All these aspects fulfill the basic
requirement of general purpose financial reporting that is to provide the financial information to
the users with the aim to assist in decision-making process.
Conclusion
One can observe from the above discussion that Ark Mines Limited complies with the
requirements of the conceptual framework of AASB along with complying with the standards of
IASB, IFRS and Corporations Act 2001. As a part of measurement requirements, the company
has adopted both the historical cost method and fair value method. The above report also
provides evidence of the presence of both the fundamental and enhancing qualitative
characteristics of financial reporting in the financial statements of the company. On the basis of
the above discussion, it can be concluded that the company has fulfilled the requirements of
general purpose financial.

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References
Aasb.gov.au., 2018. [online] Conceptual Framework for Financial Reporting. Available at:
https://www.aasb.gov.au/admin/file/content105/c9/ACCED264_06-15.pdf [Accessed 9 Dec.
2018].
Abernathy, J.L., Beyer, B., Masli, A. and Stefaniak, C., 2014. The association between
characteristics of audit committee accounting experts, audit committee chairs, and financial
reporting timeliness. Advances in Accounting, 30(2), pp.283-297.
Annualreports.com., 2018. Orica: Annual Report 2015. [online] Available at:
http://www.annualreports.com/HostedData/AnnualReportArchive/o/ASX_ORI_2015.pdf
[Accessed 11 Dec. 2018].
Arkmines.com.au., 2018. Annual Report For the Year Ended 30 June 2015. [online] Available
at: http://www.arkmines.com.au/irm/PDF/1477_0/2015AnnualReport [Accessed 11 Dec. 2018].
Barth, M.E., 2013. Measurement in financial reporting: The need for concepts. Accounting
Horizons, 28(2), pp.331-352.
Bentley, K.A., Omer, T.C. and Sharp, N.Y., 2013. Business strategy, financial reporting
irregularities, and audit effort. Contemporary Accounting Research, 30(2), pp.780-817.
Francis, J.R., Pinnuck, M.L. and Watanabe, O., 2013. Auditor style and financial statement
comparability. The Accounting Review, 89(2), pp.605-633.
Kim, S., Kraft, P. and Ryan, S.G., 2013. Financial statement comparability and credit
risk. Review of Accounting Studies, 18(3), pp.783-823.

16CONTEMPORARY ISSUES IN ACCOUNTING
Lawrence, A., 2013. Individual investors and financial disclosure. Journal of Accounting and
Economics, 56(1), pp.130-147.
Pannicke, D., Berlinger, A. and Dopf, G., SAP SE, 2013. Systems and methods for managing
and reporting financial information. U.S. Patent 8,510,182.
Zeff, S.A., 2013. The objectives of financial reporting: a historical survey and
analysis. Accounting and Business Research, 43(4), pp.262-327.
Zhang, Y. and Andrew, J., 2014. Financialisation and the conceptual framework. Critical
perspectives on accounting, 25(1), pp.17-26.