Contemporary Issues in Accounting

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary issues in accounting
Name of the student
Name of the university
Subject code
Assignment title
Student ID
Author note

1CONTEMPORARY ISSUES IN ACCOUNTING
Executive summary
The aim of the report is to analyse whether the financial statements of McMillan Shakespeare
Limited has been prepared and presented in compliance with the requirement of conceptual
framework. The report will analyse the presentation of financial statement in context of the
requirement of recognition criteria and qualitative characteristics. Based on the analysis final
decision will be made regarding whether the entity is following the requirement of conceptual
framework. From the annual report of the entity for the year ended 2018 it is observed that the
financial report is general purpose financial report and is prepared as per the requirement of
AAS, Corporation Act 2001 and the interpretation of AASB. It is identified that all the objectives
of conceptual framework in context of GPFR are complied with by McMillan Shakespeare
Limited. Elements of the financial statements like assets, liabilities, equity, expenses and
revenues are recognised and measured as per the requirement of conceptual framework. Further,
it is complying with the qualitative characteristics requirement of the framework.

2CONTEMPORARY ISSUES IN ACCOUNTING
Table of Contents
Introduction......................................................................................................................................3
Measurement requirements of the conceptual framework...............................................................3
Qualitative characteristics................................................................................................................4
Fundamental qualitative characteristics...........................................................................................5
Compliance with enhancing qualitative characteristics...................................................................7
Using financial reports for decision making purpose....................................................................11
Accounting knowledge required for carrying out the analysis of entity.......................................12
Objectives of General purpose financial reporting........................................................................13
Conclusion.....................................................................................................................................16
Reference.......................................................................................................................................17

3CONTEMPORARY ISSUES IN ACCOUNTING
Introduction
McMillan Shakespeare Limited, an ASX listed entity, engaged in providing services
related to fleet administration, retail financial services, vehicle leasing administration and salary
packaging all over Australia, New Zealand and UK. The company basically operates through 3
segments – asset management, retail financial services and remuneration services. Through its
subsidiaries the entity is the largest provider for salary packaging and the novated leasing
services in Australia and also the leading provider for asset and fleet management as well as fleet
and consumer financing (McMillan Shakespeare 2019). Conceptual framework is defined as the
system of objectives and ideas that lead to creation of consistent set of the standards and rules.
Particularly in accounting, the standards and rules set the function, limits and nature of the
financial accounting and the financial statements.
Measurement requirements of the conceptual framework
Measurement is the procedure through which the monetary amount of the item at which it
is to be reported in the financial statements. It involves particular measurement basis selection.
Various measurements that may be used by the entities are –
 Historical cost where the assets are recorded at the cost that is paid or fair value of
consideration provided for acquiring the asset (Aasb.gov.au 2019).
 Current cost where the assets are carried at the amount to be paid for acquiring same or
equivalent asset at present.
 Realisable value where the assets are carried at the amount that can be received through
selling the asset at present