Contemporary Issues in Accounting

CONTEMPORARY ISSUES IN ACCOUNTING
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Contents
Introduction.................................................................................................................................................3
Critical Analysis of General Purpose Financial Reporting by Vocus Group Limited..................................3
Measurement Criteria Adopted by the Company & its Compliance with Conceptual Framework
Requirements...........................................................................................................................................3
Fundamental Qualitative Characteristics of Conceptual Framework Applied by Vocus Group Limited. 5
Enhancing Qualitative Characteristics of Conceptual Framework Applied by Company........................7
Decision Making Relevance of the Financial Report of the Company....................................................9
Knowledge required by the end-users of Financial Reports as stated by Conceptual Framework to
Assist in Decision Making.....................................................................................................................10
Requirements of General purpose financial Reporting..........................................................................10
Conclusion.................................................................................................................................................10
Recommendations.....................................................................................................................................10
References.................................................................................................................................................12
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Introduction
The conceptual framework of accounting is developed by IASB (International Accounting
Standard Board) for improving the quality of financial reporting by businesses all over the world. In this
context, the present report is developed for developing an understanding of the various features of the
accounting framework and its adoption within the business entities during financial reporting. This has
been carried out with analyzing the financial report of a selected ASX listed entity, that is, Vocus Group
Limited, an international telecommunication company of Australia.
Critical Analysis of General Purpose Financial Reporting by Vocus Group
Limited
Measurement Criteria Adopted by the Company & its Compliance with Conceptual
Framework Requirements
Measurement as per IFRS Framework means recognizing and reporting elements of financial
statements in monetary amounts and different measurement basis can provide more useful information to
different users in different situation. Therefore elements of financial statements can be measured on two
bases –
- Historical Cost
- Current Value
However other measurement basis can also be used to recognize and report financial statements such as
Net Realizable value, Present Value to make the general purpose financial report more productive for the
end-users (Complied Framework, 2015).
Historical cost means the cost incurred in the past as a result of which a financial item is raised.
However historical cost for the financial elements is updated by the time passes. For example asset will
be measured at historical cost less depreciation or Impairment if any and liability when it becomes
onerous. On the other side current value provide updated information of a financial element on the
measurement date. Current value measurement basis is further divided in to fair value, value in use and
current cost. To meet the reporting requirements and objective of General Purpose Financial Reporting
(Compliance Framework, 2015), an entity must choose an appropriate measurement basis for recognition
of elements of financial statement. An evaluation of the Annual Report of Vocus Group Limited shows
that Non-Current Assets (Property, Plant &Equipment) are recognized at historical cost less depreciation
and Impairment. Trade receivables of the company are measured at fair value and subsequently measured
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at amortized cost and revenue is recognized on fair value in the financial statements of Vocus Group
Limited. Goodwill is allocable to identified cash generating units whenever impairment test is done
(Vocus Group ltd: Annual Report, 2018)
(Source: Vocus Group Limited: Annual Report, 2018)
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