CONTEMPORARY ISSUES IN ACCOUNTING.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
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Executive Summary
The report focuses on the aspect of the general purpose financial reporting in the ASL
limited. It further discusses the measurement as well as recognition requirements of the
company. The requirement and the objective of the general purpose of financial reporting is
discussed in the report.

2CONTEMPORARY ISSUES IN ACCOUNTING
Table of Contents
Introduction:...............................................................................................................................3
Measurement Requirement........................................................................................................3
Fundamental qualitative characteristics:....................................................................................6
Enhancing the qualitative characteristics:..................................................................................7
Use of General Purpose Financial Reports (GPFR):..................................................................9
Knowledge necessary for analysing the General Purpose Financial Reports:.........................12
Requirements of the purpose of General Financial Reporting.................................................12
Conclusion................................................................................................................................12
References................................................................................................................................14

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Introduction:
The aim of the assignment deals with the development of the financial statement in
order to provide the key stakeholders of the company with further financial information for
the purpose of decision making. While preparing the financial statement, the company
follows the generally accepted accounting principle with the required financial reporting
standards for the purpose of avoiding the financial issues. In Australia it is required to follow
the guidelines as per the ASX listed companies as per the financial reporting standard of the
Australian Accounting Standard Board (AASB) for the presentation and preparation of the
general financial reports. At the same time it is required for this kind of companies to follow
the rules and regulations complied as per the conceptual framework of AASB and the
International Financial Reporting Standards (IFRS). Further the report focuses on the analysis
of the different aspects of the ALS limited for the purpose of financial reporting.
Measurement Requirement
The AASB puts obligation on the ASX listed companies complied with the
recognition requirements as per the conceptual framework associated with the financial
statement of the company. As per the framework associated with the AASB, the companies
needs to adopt the necessary measurement which are the Historical cost and the Current
Value. The chosen measurement bases are the fair value and the Value in use
(Alsglobal.com., 2019).
In addition to such obligation on the companies which is based on the recognition
criteria provided as per the AASB Conceptual Framework in order to understand the
performance of the balance sheet and the income statement of the company (Barr and
McClellan 2018). The economic benefits associated with the future prospects are analyzed
with the financial items from the perspective of the business. The value of the cost is

4CONTEMPORARY ISSUES IN ACCOUNTING
measured as per the reliable basis of measurement of the company. Further it is needed to
analyze that ALS limited has followed the aspects of the measurements and the recognition of
the company (Arnold and Kyle 2017).
The annual report of ASL limited has been analyzed in a detailed and further it is
found that the company uses the application of both the fair value or historical cost of the
company (Zietlow et al. 2018). Some of the examples of ASL limited from the annual report
of 2018 has been provided accordingly:
Source: (Alsglobal.com. 2019)

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Source: (Alsglobal.com. 2019)
Source: (Alsglobal.com. 2019)
From the above information of the company s financial statement it can be interpreted
that the company has applied both the historical cost and the fair value in the business assets
based on the structure and the nature of the assets.

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Source: (Alsglobal.com. 2019)
It can be interpreted from the above information is that ASL limited used the cost of
amortization basis for the purpose of measuring the along with recognizing the liabilities of
the business. From the above information it is clearly stated that the amortized cost is the
historical cost of the business. Hence, the above discussion indicated that ASL limited has
followed all the necessary rules and regulation complied with the conceptual framework of
the AASB in order to further achieve the general purpose of the financial reporting
(McKinney 2015).

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Fundamental qualitative characteristics:
According to the conceptual framework of AASB, financial reporting comprises of
the two fundamental qualitative reporting. This includes Relevance and Faithful
Representation.
Relevance: Relevance is referred as the financial information that possess the capacity of
making difference in the process of decision making for users of financial report
(Aasb.gov.au 2019).
Faithful Representation: To make the financial information useful, financial information
should not only be relevant but also includes faithful representation.
Implementation of the above stated fundamental qualitative characteristics is
considered as the vital tool for organization and ALS Ltd cannot be considered exception to
this. It involves three steps in correct application of fundamental characteristics. At first an
organization is required to recognize the economic phenomena that are important in the
process of decision making for the users namely the current assets of ALS Ltd. Secondly, it is
necessary to recognize the nature of information associated with non-current assets as it is
highly relevant given that they are presented faithfully and available easily (Aasb.gov.au
2019). This includes the faithful representation of measurement procedure, criteria for
recognition, depreciation and impairment. Finally, it is necessary to ascertain whether the
information is available easily and can be represented faithfully.
As evident ALS Ltd has recorded their non-current assets in the consolidated balance
sheet. Furthermore, the company has also made disclosure regarding the relevant information
of the recorded assets under the notes 2e, 6b, 2d and 2f under the notes sections. Likewise,
ALS Ltd has also made disclosure regarding the economic phenomena in their financial
statement.

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Enhancing the qualitative characteristics:
Corresponding to fundamental qualitative characteristics, there are four types of
enhancing qualitative characteristics (Lang and Stice-Lawrence 2015). This includes
Verifiability, Comparability, Timeliness and Understandability. It is noteworthy to denote
that the enhancing qualitative characteristics cannot be useful unless it is not presented
faithfully in the financial statements.
Comparability: According to this, financial information is highly useful to the uses of
financial reports when a comparison of similar information can be drawn with the other entity
or identical entity different timeline (McCall 2017). As evident in 2018 annual report of ALS
Ltd the company has provided information of previous years as well to facilitate a
comparative assessment with other companies as well.
Verifiability: Verifiability helps the financial report users to make sure that information in
reports are presented faithfully by taking account the economic phenomena (Maynard 2017).
To maintain the verifiability of information, ALS Ltd has provided necessary disclosure
based on underlying assumptions of general purpose financial reporting under the Notes to
Consolidated Financial Statement.
Timeliness: This characteristics states that financial information should be available to the
decision makers within time in order to influence decision making procedure. Therefore,
information that are old and outdate hardly has any use to the financial information users.
Therefore, the 2018 annual report of ALS Ltd includes latest information for the year 2017
and 2018. Furthermore, the company has also published the information within time to helps
users in decision making procedure.
Understandability: The understandability helps in classifying, characterising and presenting
the financial information in a clear and concise way for the understanding of financial report

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users. ALS Ltd has assured that exclusion of complex financial information from the
financial statements makes it better to understand for the users.
Use of General Purpose Financial Reports (GPFR):
The general purpose financial reports have three objectives. The activities include
providing information to the users regarding the financial position of organization, its
financial performance and cash flows of the company for facilitating useful decision making
procedure (Dumay 2016).
Source: (Alsglobal.com. 2019)

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Source: (Alsglobal.com. 2019)

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Source: (Alsglobal.com. 2019)
As evident from the above stated financial report ALS Ltd has published the
consolidated statement of profit or loss and other comprehensive income statement,
Consolidated statement of financial position and consolidated statement of cash flows which
provides the users with required understanding of financial information for decision making
process. The profit and loss statement provides ALS Ltd information regarding overall
performance while consolidated balance sheet provides information regarding financial
position and the final statement provides information relating to ALS cash flow position.

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Knowledge necessary for analysing the General Purpose Financial Reports:
The financial reports of ALS Ltd have been prepared in accordance with the general
purpose financial reports in a way that the users of financial reports can gain better
understanding of the business and economic activities that are present in the report.
Nevertheless, there are certain segments in this reports that may need the assistance of
advisers for obtaining a clear understanding of complex economic phenomena. This includes
the cash flow hedges and foreign exchange hedge risks and derivatives. Besides this, the
users of financial reports can gain an understanding of this through explanations attached in
the notes section.
Requirements of the purpose of General Financial Reporting
The major requirement for the purpose of the financial reporting is that it is needed to
ensure the compliance associated with the financial reporting standard and the implications of
the fundamental principles associated with these reports (Hoyle, Schaefer and Doupnik
2015). From the annual report of ASL limited in the financial year 2018 it can be interpreted
that the company has fulfilled the standard and the requirement based on the Corporation Act
2001, further Australian Accounting Standard are required pronouncements of the AASB.
The companies also have followed the necessary rules and regulation associated with the
IFRS and the International Accounting Standard Board which is also known as (IASB).
Conclusion
From the above discussion it can be concluded that as per the IFRS and the
conceptual framework of the AASB there are certain obligations on the Australian companies
which is associated with the necessary guidelines and the standards for full filling the purpose
of the financial reporting. From the analysis it can be interpreted that ASL limited has
measured the general purpose of preparing a financial report as per the recognition and the

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measurement criteria of the IFRS conceptual framework and the AASB. The company has
correctly followed the all the necessary rules and regulation associated with the different
economic phenomenon. ASL limited has full filled all the required financial statement to
provide the client for the purpose of decision making.

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References
Aasb.gov.au. (2019). Aasb.gov.au. [online] Available at:
https://www.aasb.gov.au/admin/file/content102/c3/SAC4_3-95.pdf [Accessed 19 Apr. 2019].
Aasb.gov.au. (2019). Aasb.gov.au. [online] Available at:
https://www.aasb.gov.au/admin/file/content105/c9/ACCED264_06-15.pdf [Accessed 19 Apr.
2019].
Alsglobal.com., 2019. [online] Available at:
https://www.alsglobal.com/-/media/als/resources/myals/investor-documents/als-annual-
report-2018.pdf?la=en [Accessed 19 Apr. 2019].
Arnold, G. and Kyle, S., 2017. Intermediate Financial Accounting Volume 1. Lyryx.
Barr, M.J. and McClellan, G.S., 2018. Budgets and financial management in higher
education. John Wiley & Sons.
Dumay, J., 2016. A critical reflection on the future of intellectual capital: from reporting to
disclosure. Journal of Intellectual capital, 17(1), pp.168-184.
Hoyle, J.B., Schaefer, T. and Doupnik, T., 2015. Advanced accounting. McGraw Hill.
Lang, M. and Stice-Lawrence, L., 2015. Textual analysis and international financial
reporting: Large sample evidence. Journal of Accounting and Economics, 60(2-3), pp.110-
135.
Maynard, J., 2017. Financial accounting, reporting, and analysis. Oxford University Press.
McCall, N.C., 2017. Financial Reporting: An Analysis of Accounting Methods and
Principles (Doctoral dissertation, The University of Mississippi).

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McKinney, J.B., 2015. Effective financial management in public and nonprofit agencies.
ABC-CLIO.
Zietlow, J., Hankin, J.A., Seidner, A. and O'Brien, T., 2018. Financial management for
nonprofit organizations: policies and practices. John Wiley & Sons.