Contemporary Issues in Accounting: Measurement Requirements, Qualitative Characteristics, and Users of Financial Reports

CONTEMPORARY ISSUES IN
ACCOUNTING

Table of Contents
Introduction................................................................................................................................2
Main Body..................................................................................................................................2
Measurement requirements of the conceptual framework.....................................................2
Fundamental qualitative characteristics.................................................................................3
Enhancing qualitative characteristics.....................................................................................4
Users of the financial reports..................................................................................................6
Basic knowledge of accounting..............................................................................................6
The requirement for general purpose financial reporting.......................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................8
1

Introduction
The conceptual framework is considered to be a framework which consists of interrelated
fundamentals and objectives. The objectives are to determine the purpose and goals of
financial reporting. The fundamental is considered to be the underlying concepts that assist in
achieving those objectives. The concepts provide direction to select events, circumstances
and transactions which are to be accounted, recognized, measured, summarized and reported.
Thus, it provides a framework for setting accounting standards, resolving accounting disputes
and following fundamental principles. APA group is the leading energy infrastructure
organization in Australia (APA, 2018). The company have more than 1700 employees and
operates gas transmission networks all across the country. The organization delivers safe,
reliable and smart solutions through interconnected infrastructure and adequate industry
knowledge. The management of the APA group has managed the business operations in an
efficient manner.
Main Body
Measurement requirements of the conceptual framework
Source: (Annual Report, 2018)
Source: (Annual Report, 2018)
2

The general purpose financial report of APA group has been prepared as per the requirements
of the Corporations Act 2001, Australian Accounting Standards and complying with the
International Financial Reporting Standards. The financial reports of the organization have
been prepared based on the historical cost but excluding the financial instruments (Deegan,
2012). The finance leases under the assets are recognized initially at their fair value or at the
amount which is equal to the minimum lease payment’s present value. The borrowings are
initially recognized at the fair value deducting the transaction costs. The rate of interest swaps
fair value at the reporting date is identified by the discounting future flow of cash. The
financial instruments of the organization are carried out at the fair value in the financial
position statement. The fair value can be examined from the quoted prices in the active
market. The financial instrument if in the market is not active then the organization uses
different valuation models for determining the fair value (Holton, 2012). The main objective
of implementing valuation methods is to set a price that will be received for selling the asset
or transferring the liability between the participants of the market. The fair value values of the
financial liabilities and financial assets are being measured and evaluated at the end of the
reporting period. The information depicts that APA group complied with the measurement
requirements of the conceptual framework.
Fundamental qualitative characteristics
Source: (Annual Report, 2018)
3