Contemporary Issues in Accounting

This report discusses the importance of the conceptual framework in financial reporting and analyzes Evolution Mining Limit's compliance with the framework in their annual report. It covers the recognition criteria, qualitative characteristics, and adherence to regulations and principles.

RUNNING HEAD: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
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1CONTEMPORARY ISSUES IN ACCOUNTING
Executive Summary
Based on the discussion, it can be gathered that for financial reporting to be effective following
conceptual framework is vital for the business companies. The annual report of this company is
evaluated for the year 2018 for observing its compliance with the requirements of the new
financial reporting conceptual framework. The annual report of Evolution Mining Limit has
certain important information regarding adherence with several elements of the conceptual
framework.

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Table of Contents
Introduction......................................................................................................................................3
Complying with the Conceptual Framework Requirements...........................................................3
Addressing the Recognition Criteria of Conceptual Framework....................................................7
Assets...........................................................................................................................................7
Liabilities.....................................................................................................................................7
Equity...........................................................................................................................................8
Revenue.......................................................................................................................................8
Expenses......................................................................................................................................8
Satisfaction of Qualitative Characteristics of Conceptual Framework............................................9
Relevance.....................................................................................................................................9
Comparability..............................................................................................................................9
Faithful Representation................................................................................................................9
Timeliness..................................................................................................................................10
Understadability.........................................................................................................................10
Verifiability................................................................................................................................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................12

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4CONTEMPORARY ISSUES IN ACCOUNTING
Introduction
Conceptual framework for the financial reporting offers an increased assistance to the
businesses in development of the financial statements. It offers the companies with necessary
outline regarding the standards and principles for developing the financial statements. Other than
that, several organizational concerns considering financial reporting can be dealt with through
applying relevant principles along with standards related with conceptual framework
(Aasb.gov.au. 2017). Therefore, it is evident that the conceptual framework has several factions
within the financial aspects of the organizations. In the year 1989, “International Accounting
Standards Board (IASB)” introduced the financial reporting based conceptual framework.
Considering same, the current report considers analysing the adherence with recognition criteria,
objectives and the qualitative aspects of the companies’ conceptual frameworks. For analysing
the importance of financial conceptual framework in companies, Evolution Mining Limit is
taken into account in this report. Evolution Mining Limit is a domestically owned publically
listed organization that attains it revenue from the finding, development, production and sale of
gold as well as concentrate of gold and copper. The organization employs around 1500
employees and also has its business operations within New Zealand and Australia. The annual
report of this company is evaluated for the year 2018 for observing its compliance with the
requirements of the new financial reporting conceptual framework (Evolutionmining.com.au.
2019).
Complying with the Conceptual Framework Requirements
Based on the discussion, it can be gathered that for financial reporting to be effective
following conceptual framework is vital for the business companies. The annual report of

5CONTEMPORARY ISSUES IN ACCOUNTING
Evolution Mining Limit has certain important information regarding adherence with several
elements of the conceptual framework. After analyzing the 2018 annual report of Evolution
Mining Limit, it can be gathered that the organization has implemented the regulations and
principles of “Australian Accounting Standards Board (AASB) and “Corporation Act 2001” for
the general purpose financial reporting (Australian Securities Exchange 2017). Other than that,
the consolidated financial statements of the organization are prepared relied on the standards and
principles mentioned within “International Accounting Standards Board (IASB)” and
“International Financial Reporting Standard (IFRS)”. Focused on the overall aspect, it can be
stated that Evolution Mining Limit abides by the conceptual framework developed by IFRS for
effective financial reporting. In this regard, it s important to be evaluated that the financial
reporting conceptual framework has three vital objectives that is necessary to be addressed by
Evolution Mining Limit. This explanation signified the extent of companies’ complaisance with
conceptual framework objectives of Evolution Mining Limit.
The first objective of the conceptual framework explains the responsibility of companies
in offering relevant along with useful financial information for their stakeholders for making
better financial decisions. In situation of Evolution Mining Limit, it can also be mentioned that
the organization offers all the relevant information regarding its financial statements on a timely
basis (Monciardini, Dumay and Biondi 2017). The organization also offers useful financial data
by means of several financial statements that includes income statement, statement of
comprehensive income, statement of changes in equity, cash flow statements and balance sheet.
Moreover, the organization offers financial notes that are a major financial information source.
Another major objective of the financial reporting conceptual framework is its helpful aspect in
evaluating amount, uncertainties and timing associated with companies’ cash flows. In this

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regard, it must also be clarified that Evolution Mining Limit considers releasing its cash flow
statement on a regular manner that offers the users with all important information associated with
cash flow of the organization.
Consolidated cash flow
The third objective of the financial reporting conceptual framework is that it signifies that
organizations must publish all important information related with companies resources so that
they can position itself as supportive for the financial decision making process. Considering case

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of Evolution Mining Limit is observed that the organization develops its balance sheet following
the AASB regulations which encompass all necessary information regarding companies’
economic resources (Perera 2016).
Consolidated balance sheet
Considering the above explanation, it is clarified that Evolution Mining Limit has abided
by all the important objectives of conceptual framework.

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Addressing the Recognition Criteria of Conceptual Framework
As per the financial reporting conceptual frameworks it is responsibility of the
organizations ton address the recognition criteria of the liabilities, assets, equity and revenue
along with expenses. There are three vital requirements that are required to be important
information regarding the financial aspects (Fasb.org. 2017). Moreover, all these aspects are
needed to be faithfully represented and thirdly, information associated with such aspects must be
useful for the stakeholders and the investors. Following indicates the recognition criteria by
Evolution Mining Limit.
Assets
There are different asset types in Evolution Mining Limit. In case of Property, plant and
equipment these are calculated through decreasing depreciation from the asset costs. Costs
associated with such assets are recognized in a situation where future benefits are attained in the
four of the organization.
Considering the intangible assets of the organization it is gathered that they are liable for
impairment. Impairment losses are recognized based on carrying amount of such specific assets.
In Evolution Mining Limit the intangible assets have a defined useful life and are not liable for
any amortization (Iasplus.com. 2017).
Asset impairment
Liabilities
There are several liabilities within Evolution Mining Limit and considering deferred tax
liabilities these are recognized relied on tax rate differences.

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Evolution Mining Limit identifies that their inventories are at lower cost with net
realizable value. The cost of inventories is also analyzed with support of weighted average cost
of capital. Trade along with other receivables is paid in the duration of 30 to 90 days after the
process of recognition (Fasb.org. 2017).
Equity
Evolution Mining Limit refers its ordinary shares as equity and the incremental costs
attribution can be observed as issues of shares by the company and such incremental costs are
subtracted from the equity of Evolution Mining Limit.
Revenue
Considering the revenues, the management of Evolution Mining Limit identifies them at
the time of sales after deduction of the taxes. Moreover, the sales provisions are recognized
relied on the assessment. Therefore, sales value encompasses the revenue from sale of goods.
Expenses
Considering the expenses of Evolution Mining Limit they are recognized relied on
specific categories that include employee benefits, amortization along with depreciation
expenses, financial expenses along with rental costs associated with operating leases along with
net foreign exchange gains. All such expenses are recorded and recognized while they take place
(Ey.com. 2017).
From the above explanation it is evident that Evolution Mining Limit has addressed all
recognition criteria’s related with the concept framework in reporting the liabilities, assets,
revenues along with expenses.

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Satisfaction of Qualitative Characteristics of Conceptual Framework
There are certain important qualitative elements of financial reporting conceptual
framework that can improve the financial reporting quality. It is important for Evolution Mining
Limit to address all the qualitative characteristics. The qualitative aspects mentioned below are
related with the conceptual framework followed by Evolution Mining Limit.
Relevance
These qualitative aspects indicate that offered financial information is necessary to be
important as it can support efficient financial decision making. Evolution Mining Limit abides by
all the updated regulations and principles of AASB, Corporations Act 2001, IFRS, etc.
Moreover, the organza ton also considers all the important depreciation rates, taxes and others.
Therefore it can be stated that the developed financial information of Evolution Mining Limit is
important for financial decision making by the shareholders and the investors (Maas, Schaltegger
and Crutzen 2016).
Comparability
Based on such qualitative element, the business companies must develop their financial
statements in the fair and true basis. It also indicates that they requires t be capable of attaining
the faith of the stakeholders. The audit report of Evolution Mining Limit indicates the
Faithful Representation
This qualitative aspect indicates that the business organizations must consider presenting
their financial data in a fair and trust basis. It also signifies that they must be capable of attaining
the faith the stakeholders. The audit report of Evolution Mining Limit by the PWC indicates that
the organization has represented faithfully all the financial statements through abiding by all the

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necessary accounting standards. Therefore, it can also be signified that Evolution Mining Limit
has faithfully represented their financial statements (Cheng et al. 2014).
Timeliness
This qualitative aspect signifies that the financial information is offered n a timely
manner. Considering situation of Evolution Mining Limit, it can be observed that the
organization publishes yearly financial statements and also on the quarterly basis. Therefore, it
can also be observed that investors, shareholders and other users can attain timely financial
information from financial statements of Evolution Mining Limit.
Understadability
Based on this qualitative aspect, the organizations are required to develop their financial
statements in a manner that they can be simply understandable for all its users, investors and
shareholders. Evolution Mining Limit publishes their financial statement in an easy formal
manner for increasing ease of understandability for its users (Ifrs.org. 2017).
Verifiability
This qualitative element indicates that the financial statement users must be capable of
verifying the published financial information of the organization. Considering this purpose,
Evolution Mining Limit offers the segmentation of almost all the accounting aspect in the
financial statements notes.
Conclusion
For analysing the importance of financial conceptual framework in companies, Evolution
Mining Limit is taken into account in this report. Evolution Mining Limit abides by all the
updated regulations and principles of AASB, Corporations Act 2001, IFRS, etc. Moreover, the

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organza ton also considers all the important depreciation rates, taxes and others. Therefore it can
be stated that the developed financial information of Evolution Mining Limit is important for
financial decision making by the shareholders and the investors.

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References
Aasb.gov.au., 2017. Conceptual Framework for Financial Reporting. [online] Available at:
http://www.aasb.gov.au/admin/file/content105/c9/ACCED264_06-15.pdf [Accessed 3 Dec.
2017].
Australian Securities Exchange - www.asx.com.au., 2017. Company details - MYR - ASX -
Australian Securities Exchange. [online] Available at: http://m.asx.com.au/m/company-
info.xhtml?issuerCode=MYR [Accessed 4 Dec. 2017].
Cheng, M., Green, W., Conradie, P., Konishi, N. and Romi, A., 2014. The international
integrated reporting framework: key issues and future research opportunities. Journal of
International Financial Management & Accounting, 25(1), pp.90-119.
Evolutionmining.com.au., 2019. [online] Available at: https://evolutionmining.com.au/wp-
content/uploads/2018/10/1858627.pdf [Accessed 15 Apr. 2019].
Ey.com., 2017. Conceptual Framework: Objectives and Qualitative Characteristics. [online]
Available at: http://www.ey.com/Publication/vwLUAssets/Supplement_86_GL_IFRS/$FILE/
Supplement_86_GL_IFRS.pdf [Accessed 3 Dec. 2017].
Fasb.org., 2017. Conceptual Framework for Financial Reporting: Objective of Financial
Reporting and Qualitative Characteristics of Decision-Useful Financial Reporting Information.
[online] Available at: http://www.fasb.org/jsp/FASB/Document_C/DocumentPage?
cid=1218220340119&acceptedDisclaimer=true [Accessed 3 Dec. 2017].

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Fasb.org., 2017. Conceptual Framework-Objective and Qualitative Characteristics. [online]
Available at: http://www.fasb.org/project/cf_phase-a.shtml [Accessed 3 Dec. 2017].
Iasplus.com., 2017. Conceptual Framework Phase A – Objective and qualitative characteristics.
[online] Available at: https://www.iasplus.com/en/projects/completed/framework/framework-a
[Accessed 3 Dec. 2017].
Ifrs.org., 2017. IFRS . [online] Available at: http://www.ifrs.org/issued-standards/list-of-
standards/conceptual-framework/ [Accessed 3 Dec. 2017].
Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability assessment,
management accounting, control, and reporting. Journal of Cleaner Production, 136, pp.237-
248.
Monciardini, D., Dumay, J. and Biondi, L., 2017. Integrated reporting and EU law. Competing,
converging or complementary regulatory frameworks?.
Perera, D., 2016. Adoption of international financial reporting standards (IFRS) for small and
medium-sized enterprises (SMEs): problems and challenges.