Contemporary Issues in Accounting: Impact on Businesses and Afterpay Touch Group Limited
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In this project report we will discuss about contemporary issues in accounting and below are the summaries point:-
Research study focuses on contemporary issues in accounting and their impact on businesses.
Afterpay Touch Group Limited is analyzed as a case study in the research.
Topics covered i...
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Running head: Contemporary issues in accounting
1
Project Report: Contemporary issues in accounting
1
Project Report: Contemporary issues in accounting
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Contemporary issues in accounting
2
Executive summary
Identifying changes in the accounting sector is a research study’s topic which will
further be followed by describing different practices of accounting. The aim of this study is to
draw attention on all the contemporary issues in the accounting and its effect on the life of
businesses to get an idea as for how they are dealing with these changes. Mixed-effect of the
changes has witnessed by all the stakeholders will result in increasing participation of
Afterpay touch group limited with IFRS.
2
Executive summary
Identifying changes in the accounting sector is a research study’s topic which will
further be followed by describing different practices of accounting. The aim of this study is to
draw attention on all the contemporary issues in the accounting and its effect on the life of
businesses to get an idea as for how they are dealing with these changes. Mixed-effect of the
changes has witnessed by all the stakeholders will result in increasing participation of
Afterpay touch group limited with IFRS.
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Contemporary issues in accounting
3
Contents
Introduction.......................................................................................................................4
Company overview...........................................................................................................4
Contemporary issues.........................................................................................................4
Effect over the stakeholders..........................................................................................6
Conclusion........................................................................................................................7
References.........................................................................................................................8
3
Contents
Introduction.......................................................................................................................4
Company overview...........................................................................................................4
Contemporary issues.........................................................................................................4
Effect over the stakeholders..........................................................................................6
Conclusion........................................................................................................................7
References.........................................................................................................................8
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Contemporary issues in accounting
4
Introduction:
Accounting is considered as medicine which heals the wounds of the business by
strengthening the immunity of an entity. The topic of this research is to discuss the
contemporary issues in the accounting of After Pay Tough group limited such as discussing
changes in accounting policies, accounting estimates and finally accounting standards. This
assignment is categorized into various parts such as describing specific changes in standards,
estimates and policies, discussing accounting practice followed by an entity and its effects on
the stakeholders (Elad, 2016). In order to identify the contemporary issues of Afterpay, the
annual report of the company has been taken into context.
Company overview:
Afterpay touch group limited is an Australian organization which is involved in the
financial technology operations. Along with the Australian market, the company also
operates in the New Zealand and US market. The company allows retailers various services
regarding the facility to buy the products now and make the payment of the product later
without the requirement of upfront fees, traditional credit and interest amount (home, 2019).
Contemporary issues:
“Contemporary issues in accounting” requires a great discussion on the accounting
policies, accounting standards and the changes in the accounting process of the business. It is
important for a business to follow the same policies of accounting in every year and if some
changes are done in the accounting process of the business then it should be disclosed by the
company in its general meeting and in its annual report. It is not required that all the changes
in the policy affect the stakeholders or the business of the company negatively. Sometimes
these changes are done by the company for the betterment of the stakeholders (Zeff, van der
Wel and Camfferman, 2016). Hence, it becomes important for the auditors or the
stakeholders of the business to understand about the changes in the business and their impact.
In case of Afterpay, the annual report (2018) of the company has been studied and it
has been found that the company has made few changes in the accounting process in last few
years. The company is following the same accounting standards and rules as described in the
IFRS, IAS, GAAP and AASB. It is essential for both the regular as well as new businesses to
measure the trends of accounting and the announcements introduced in this field before
4
Introduction:
Accounting is considered as medicine which heals the wounds of the business by
strengthening the immunity of an entity. The topic of this research is to discuss the
contemporary issues in the accounting of After Pay Tough group limited such as discussing
changes in accounting policies, accounting estimates and finally accounting standards. This
assignment is categorized into various parts such as describing specific changes in standards,
estimates and policies, discussing accounting practice followed by an entity and its effects on
the stakeholders (Elad, 2016). In order to identify the contemporary issues of Afterpay, the
annual report of the company has been taken into context.
Company overview:
Afterpay touch group limited is an Australian organization which is involved in the
financial technology operations. Along with the Australian market, the company also
operates in the New Zealand and US market. The company allows retailers various services
regarding the facility to buy the products now and make the payment of the product later
without the requirement of upfront fees, traditional credit and interest amount (home, 2019).
Contemporary issues:
“Contemporary issues in accounting” requires a great discussion on the accounting
policies, accounting standards and the changes in the accounting process of the business. It is
important for a business to follow the same policies of accounting in every year and if some
changes are done in the accounting process of the business then it should be disclosed by the
company in its general meeting and in its annual report. It is not required that all the changes
in the policy affect the stakeholders or the business of the company negatively. Sometimes
these changes are done by the company for the betterment of the stakeholders (Zeff, van der
Wel and Camfferman, 2016). Hence, it becomes important for the auditors or the
stakeholders of the business to understand about the changes in the business and their impact.
In case of Afterpay, the annual report (2018) of the company has been studied and it
has been found that the company has made few changes in the accounting process in last few
years. The company is following the same accounting standards and rules as described in the
IFRS, IAS, GAAP and AASB. It is essential for both the regular as well as new businesses to
measure the trends of accounting and the announcements introduced in this field before
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Contemporary issues in accounting
5
starting its business or continuing its existing business operation. Afterpay is operating its
business from decades in the Australian market. Hence, it is important for the company to
abide the Accounting rules and the regulations for better determination of its profit and worth
in a particular period of time. In doing so, the articles of the Accounting stands released by an
Australian accounting standards board will help all its users and stakeholders of the company
by providing the authentic information (Dinnie, 2015).
The annual report of the company describes about all the accounting standards and the
accounting rules which has been used by the company while recording the financial activities
of the business in its annual report. In last few years, various modifications take places in the
Accounting standards which are universally accepted by all the businesses throughout the
world. The accounting standards which are modified are AASB 2016- for the recognition of
deferred tax assets for unrealised losses, AASB 107 used for disclosure initiative, standards
which helps in treating amounts of non-cash generating specialised assets for not for profit
and loss entities, deferral of AASB 15 for not for profit and loss entities and standard for
annual improvements (annual report, 2018). All the above mention standards are amended as
in all these accounting standards the weaker sections are eliminated by introducing to the
existing standards without fully rejecting the standards. The comments of all the users in
changing all of these accounting standards are taken into account by releasing the
amendments to get rid of all the problems faces by a user.
Along with the changes in these standards, changes have been done in the accounting
process of the company. The company has accepted all the accounting standards and
followed their practices in order to manage the uniformity with the other companies in the
industry and the country. These changes have helped the company to manage the similarity in
the process so that the users of the annual report of the company could compare the
performance of the company from some other entity and can make better decisions. The
annual report of the company describes that proper uses of accounting standards have done
by the company (The guardian, 2018).
Currently, company is following AASB 9 for treating the issues related to the
preparation of the financial statements, AASB 15 for revenue arises from contracts with
customers. This standard has been recently amended by the Australian accounting standard
board and theses standards are applicable for both the profit-making as well as the non-profit
making entities in or around Australia (Garrett, Hoitash and Prawitt, 2014). Further, company
5
starting its business or continuing its existing business operation. Afterpay is operating its
business from decades in the Australian market. Hence, it is important for the company to
abide the Accounting rules and the regulations for better determination of its profit and worth
in a particular period of time. In doing so, the articles of the Accounting stands released by an
Australian accounting standards board will help all its users and stakeholders of the company
by providing the authentic information (Dinnie, 2015).
The annual report of the company describes about all the accounting standards and the
accounting rules which has been used by the company while recording the financial activities
of the business in its annual report. In last few years, various modifications take places in the
Accounting standards which are universally accepted by all the businesses throughout the
world. The accounting standards which are modified are AASB 2016- for the recognition of
deferred tax assets for unrealised losses, AASB 107 used for disclosure initiative, standards
which helps in treating amounts of non-cash generating specialised assets for not for profit
and loss entities, deferral of AASB 15 for not for profit and loss entities and standard for
annual improvements (annual report, 2018). All the above mention standards are amended as
in all these accounting standards the weaker sections are eliminated by introducing to the
existing standards without fully rejecting the standards. The comments of all the users in
changing all of these accounting standards are taken into account by releasing the
amendments to get rid of all the problems faces by a user.
Along with the changes in these standards, changes have been done in the accounting
process of the company. The company has accepted all the accounting standards and
followed their practices in order to manage the uniformity with the other companies in the
industry and the country. These changes have helped the company to manage the similarity in
the process so that the users of the annual report of the company could compare the
performance of the company from some other entity and can make better decisions. The
annual report of the company describes that proper uses of accounting standards have done
by the company (The guardian, 2018).
Currently, company is following AASB 9 for treating the issues related to the
preparation of the financial statements, AASB 15 for revenue arises from contracts with
customers. This standard has been recently amended by the Australian accounting standard
board and theses standards are applicable for both the profit-making as well as the non-profit
making entities in or around Australia (Garrett, Hoitash and Prawitt, 2014). Further, company
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Contemporary issues in accounting
6
also follows the AASB 16 for leases, AASB for insurance contracts, AASB 1059 for service
concession arrangements or grantors.
Further, on the basis of evaluation over the annual report of the company, it has been
found that the recording, measurement and the presentation of each financial activity have
been done in such a way that any user could understand it easily (draft, 2015). This simplicity
have takes place due to proper application of accounting standards, rules and regulations of
the company. On the basis of study, it has been found that the business has simplified each of
the process to give a lesson of simplified recording and the compliances.
On the basis of the study over financial statement of the company which includes the
income statement, statement of cash flows and balance sheet, it has been found that each of
the financial recordings has been explained by the company with proper financial notes. The
financial notes describe about the accounting standard which has been followed by the
company and the method on the basis of that the number has occurred (Chand, Patel and
White, 2015).
Effect over the stakeholders:
Main stakeholders of a business are investors, shareholders, customers, suppliers,
financial institutions and government. It is important for a business to disclose all the relevant
information of the business so that it becomes easy for them to evaluate the position of the
company in the industry. The viewpoint of all these stakeholders is to be taken into account
by the companies before introducing any standard or amending any existing standards as they
have to think about the present as well as the present needs of all their users (Cayanan, 2016).
This meeting and the viewpoint of the stakeholders of the company improves the faith as well
as the understandings of the stakeholders of the company in its annual report.
On the basis of the study over the annual report of the company and changes in the
accounting policies of the company in last few years, it has been found that there is dual
effect on the stakeholders of the business. The company is involved in various changes in the
accounting standards and policies in last few years. However, the company has discussed the
changes with its stakeholders and the same has been disclosed by the company in its annual
report as well in order to manage the accounting process of the company (Abeysekera, 2013).
Changes in the accounting standards, accounting estimates and accounting policies could be
positive or negative for different stakeholders of the company at the same time. Such as,
6
also follows the AASB 16 for leases, AASB for insurance contracts, AASB 1059 for service
concession arrangements or grantors.
Further, on the basis of evaluation over the annual report of the company, it has been
found that the recording, measurement and the presentation of each financial activity have
been done in such a way that any user could understand it easily (draft, 2015). This simplicity
have takes place due to proper application of accounting standards, rules and regulations of
the company. On the basis of study, it has been found that the business has simplified each of
the process to give a lesson of simplified recording and the compliances.
On the basis of the study over financial statement of the company which includes the
income statement, statement of cash flows and balance sheet, it has been found that each of
the financial recordings has been explained by the company with proper financial notes. The
financial notes describe about the accounting standard which has been followed by the
company and the method on the basis of that the number has occurred (Chand, Patel and
White, 2015).
Effect over the stakeholders:
Main stakeholders of a business are investors, shareholders, customers, suppliers,
financial institutions and government. It is important for a business to disclose all the relevant
information of the business so that it becomes easy for them to evaluate the position of the
company in the industry. The viewpoint of all these stakeholders is to be taken into account
by the companies before introducing any standard or amending any existing standards as they
have to think about the present as well as the present needs of all their users (Cayanan, 2016).
This meeting and the viewpoint of the stakeholders of the company improves the faith as well
as the understandings of the stakeholders of the company in its annual report.
On the basis of the study over the annual report of the company and changes in the
accounting policies of the company in last few years, it has been found that there is dual
effect on the stakeholders of the business. The company is involved in various changes in the
accounting standards and policies in last few years. However, the company has discussed the
changes with its stakeholders and the same has been disclosed by the company in its annual
report as well in order to manage the accounting process of the company (Abeysekera, 2013).
Changes in the accounting standards, accounting estimates and accounting policies could be
positive or negative for different stakeholders of the company at the same time. Such as,
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Contemporary issues in accounting
7
changes in the accounting standards are positive for some users and negative for others,
changes in accounting policies and estimates are favourable for all the businesses as the
equipment of disclosing the immaterial changes has abolished from international accounting
standard 8 that is for treating prepared financial statements.
Conclusion:
It is summarized from the above study that exemption of retrospective changes in the
accounting policies during the preparation of the books of accounts or the financial
statements will guide all the businesses who think financial reporting compliance is a difficult
mode in utilizing these regulations by listing its company with the IFRS modules. There is a
dual effect of all these changes on the stakeholder’s shows the significance of the accounting
and its concepts.
In case of Afterpay touch group limited, it has been found that the company is
involved in various changes in the accounting standards and policies in last few years.
However, the company has discussed the changes with its stakeholders and the same has been
disclosed by the company in its annual report as well in order to manage the accounting
process of the company. To conclude, the company is not involved in any kind of accounting
issues.
7
changes in the accounting standards are positive for some users and negative for others,
changes in accounting policies and estimates are favourable for all the businesses as the
equipment of disclosing the immaterial changes has abolished from international accounting
standard 8 that is for treating prepared financial statements.
Conclusion:
It is summarized from the above study that exemption of retrospective changes in the
accounting policies during the preparation of the books of accounts or the financial
statements will guide all the businesses who think financial reporting compliance is a difficult
mode in utilizing these regulations by listing its company with the IFRS modules. There is a
dual effect of all these changes on the stakeholder’s shows the significance of the accounting
and its concepts.
In case of Afterpay touch group limited, it has been found that the company is
involved in various changes in the accounting standards and policies in last few years.
However, the company has discussed the changes with its stakeholders and the same has been
disclosed by the company in its annual report as well in order to manage the accounting
process of the company. To conclude, the company is not involved in any kind of accounting
issues.
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Contemporary issues in accounting
8
References:
Abeysekera, I., 2013. A template for integrated reporting. Journal of Intellectual
Capital, 14(2), pp.227-245.
Annual report. 2018. Afterpay touch group limited. Retrieved from:
https://www.afterpaytouch.com/who-we-are (accessed 23/1/2019).
Cayanan, A.S., 2016. An assessment of the financial reporting practices of listed Philippine
banks in 2003. Philippine Management Review, 11(1).
Chand, P., Patel, A. and White, M., 2015.Adopting international financial reporting standards
for small and medium‐sized enterprises. Australian Accounting Review, 25(2), pp.139-154.
Dinnie, K., 2015. Nation branding: Concepts, issues, practice. Routledge: London.
Draft, I.E., 2015.Conceptual Framework for Financial Reporting. 2015-05-01)[2015-07-20].
http://kjs. mof. gov.cn/zhengwuxinxi/gongzuotongzhi/201506 P.
Elad, C., 2016. International Classification of Financial Reporting, Christopher W.
Nobes.Routledge, Abington, UK (2014),(160 pages,£ 95), ISBN: 0415736935.
Garrett, J., Hoitash, R. and Prawitt, D.F., 2014. Trust and financial reporting quality. Journal
of Accounting Research, 52(5), pp.1087-1125.
Home. 2018. Afterpay touch group limited. Retrieved from:
https://www.afterpaytouch.com/results-reports (accessed 23/1/2019).
the guardian. 2018. Afterpay touch group limited. Retrieved from:
https://www.theguardian.com/australia-news/2017/sep/21/afterpay-buy-now-pay-later-
scheme-soars-in-popularity-but-experts-sound-warning (accessed 23/1/2019).
Zeff, S.A., van der Wel, F. and Camfferman, C., 2016. Company financial reporting: A
historical and comparative study of the Dutch regulatory process. Routledge:London.
8
References:
Abeysekera, I., 2013. A template for integrated reporting. Journal of Intellectual
Capital, 14(2), pp.227-245.
Annual report. 2018. Afterpay touch group limited. Retrieved from:
https://www.afterpaytouch.com/who-we-are (accessed 23/1/2019).
Cayanan, A.S., 2016. An assessment of the financial reporting practices of listed Philippine
banks in 2003. Philippine Management Review, 11(1).
Chand, P., Patel, A. and White, M., 2015.Adopting international financial reporting standards
for small and medium‐sized enterprises. Australian Accounting Review, 25(2), pp.139-154.
Dinnie, K., 2015. Nation branding: Concepts, issues, practice. Routledge: London.
Draft, I.E., 2015.Conceptual Framework for Financial Reporting. 2015-05-01)[2015-07-20].
http://kjs. mof. gov.cn/zhengwuxinxi/gongzuotongzhi/201506 P.
Elad, C., 2016. International Classification of Financial Reporting, Christopher W.
Nobes.Routledge, Abington, UK (2014),(160 pages,£ 95), ISBN: 0415736935.
Garrett, J., Hoitash, R. and Prawitt, D.F., 2014. Trust and financial reporting quality. Journal
of Accounting Research, 52(5), pp.1087-1125.
Home. 2018. Afterpay touch group limited. Retrieved from:
https://www.afterpaytouch.com/results-reports (accessed 23/1/2019).
the guardian. 2018. Afterpay touch group limited. Retrieved from:
https://www.theguardian.com/australia-news/2017/sep/21/afterpay-buy-now-pay-later-
scheme-soars-in-popularity-but-experts-sound-warning (accessed 23/1/2019).
Zeff, S.A., van der Wel, F. and Camfferman, C., 2016. Company financial reporting: A
historical and comparative study of the Dutch regulatory process. Routledge:London.
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