Contemporary Issues in Accounting - Compliance with AASB Conceptual Framework by Orora Limited

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
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1CONTEMPORARY ISSUES IN ACCOUNTING
Abstract
The main aim of this report is to explore the compliance with the standards and principles of
accounting standard of the AASB conceptual framework by one of the top ASX 100 listed
companies that is Orora Limited. This report takes attempt to analyse the objectives of
conceptual framework. It also evaluates the recognition criteria of conceptual framework. Lastly,
it also analyses the characteristics of financial information.

2CONTEMPORARY ISSUES IN ACCOUNTING
Table of Contents
Introduction......................................................................................................................................3
Conceptual Framework Objectives..................................................................................................3
Recognition Criteria.......................................................................................................................10
Fundamental Qualitative Characteristics.......................................................................................14
Enhancing Qualitative Characteristics...........................................................................................15
Conclusion.....................................................................................................................................16
References......................................................................................................................................18

3CONTEMPORARY ISSUES IN ACCOUNTING
Introduction
Business entities are required to carry out different kind business operations for the
achievement of the goals and objectives. One of such operations is Accounting and Financial
reporting related business operations. Accounting refers to the process of maintaining the
financial records of the companies. It is required for the accountants of the business entities to
comply with the standards, principles, rules and regulations of the accounting standards in order
to carry on their accounting operations in the most proper manner. This same aspect is also
applicable for the business entities of Australia having listed under the Australian Stock
Exchange (ASX). It can be seen that both the Australian Accounting Standard Board (AASB)
and International Accounting Standard Board (IASB) have introduced an accounting conceptual
framework in order to bring accuracy and transparency in the accounting process of the
Australian companies (aasb.gov.au 2018). This particular conceptual framework consists of
regulations, standards and principles and standards that the Australian companies are required to
follow at the time of their accounting operations. The main aim of this report is to explore the
compliance with the standards and principles of accounting standard of the AASB conceptual
framework by one of the top ASX 100 listed companies. Thus, for the completion of this report,
Orora Limited is taken into consideration. Orora Limited is an Australia based company provides
packaging solution and it is enlisted in ASX top 100 in the name of ORA (ororagroup.com
2018).
Conceptual Framework Objectives
According to the earlier discussion, it is the obligation on the business entities of
Australia to follow the standards, principles, rules and regulations of the AASB conceptual

4CONTEMPORARY ISSUES IN ACCOUNTING
framework in order to bring accuracy and transparency in the financial reporting process. In the
conceptual framework of AASB, there is the mention of three major objectives for the
development of financial reporting. In the first objective, AASB states that the companies need
to develop their financial statements in such a manner so that they can express the financial
position of the business entities. For this objective, balance sheet or the statement of financial
position is an useful statement (aasb.gov.au 2018). In the second objective, AASB states that the
relevant financial statements of the companies must include the information for expressing the
financial performance of the business entities. For this objective, income statement is a necessary
financial statement (aasb.gov.au 2018). In the third objective, AASB states that the business
entities have the obligation to provide all the required information so that the change in financial
performance of the entities can be identified (aasb.gov.au 2018). For this purpose, the statement
of change in equity and the statement of cash flows are the necessary statements. Now, it is
required to analyse that whether Orora Limited satisfies these objectives or not.

5CONTEMPORARY ISSUES IN ACCOUNTING
(Source: ororagroup.com 2018)
The above figure represents the latest statement of financial position of Orora Limited
that can be found in the 2017 Annual Report of the company. In this statement, the company has
provided all the information about their economic resources like assets, liabilities, equity and
others that helps in the determination of the financial position of the entity. In addition, the
company has also provided the necessary notes to support the information in the above statement
(ororagroup.com 2018).