Compliance of Financial Reporting by Polynovo Limited: Analysis

This report provides a contemporary analysis of Polynovo Limited, a healthcare company, focusing on its compliance with Australian accounting standards. The study examines the company's adherence to measurement requirements, fundamental and enhancing qualitative characteristics in its financial reporting. It assesses how effectively users, including investors and stakeholders, can understand and analyze these reports, highlighting the required knowledge for financial analysis. The report also investigates whether Polynovo Limited meets the general purpose reporting requirements and offers recommendations for improvement, such as conducting regular audits to enhance the materiality of financial reports. In conclusion, the analysis confirms Polynovo Limited's compliance with accounting standards and its effectiveness in providing financial information for informed decision-making by various stakeholders.

Contemporary
Theoretical Concepts

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Compliance of measurement requirements of conceptual frameworks by Polynovo Limited
.....................................................................................................................................................1
2. Compliance of fundamental qualitative characteristic by Polynovo Limited........................2
3. Compliance with enhancing qualitative characteristics by Polynovo Limited......................2
4. Can the users of financial reports able to understand the financial reports of Polynovo
Limited........................................................................................................................................3
5. Requirement of knowledge in users to analyse the financial reports......................................3
6. Have the Polynovo Limited met each requirement for general purpose reporting?...............4
RECOMMENDATION...................................................................................................................4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Contemporary theory is a modern way of showing the rationale of each perspective of the
business organisation. The present study shows a contemporary analysis of the Polynovo Limited
(health care) company. It is a health care organisation that focuses on the development and
design of various equipments of the latest technology as to enhance the efficiency of doctors in
providing their medical services. The assignment shows compliance of the conceptual
requirements and fundamental qualitative characteristics by Polynovo Limited. Further, it also
provides information about how efficiently its users can analyse and understand the financial
reports of the company. The study also shows the required knowledge and skills for the analysis
of financial reporting. At the end of report, it shows a conceptual framework about meeting of
requirement by the business for general purpose financial reporting.
MAIN BODY
1. Compliance of measurement requirements of conceptual frameworks by Polynovo Limited
The accounting standard board of Australia has provided various guidelines and
requirements that are needed to be comply with while developing its accounting and financial
reports. Analysis of the annual reports of Polynovo Limited has shown that the business has
complied with each requirements of the Accounting standard board of Australia (Afriyie and
et.al., 2018)
Measurement requirements provided by the accounting standard board helps a business
organisation in development of accounting and financial reporting in such a way so that they
could provide the actual result and performance of a business organisation.
As the Polynovo Limited has complied with each of the requirements and guidelines has
helped it in providing actual information about the business to its managers through which they
become able to analyse the achievements of business towards its set goals and objectives
(Bolisani and Scarso, 2017).
Further, by measuring the operating activities such as amount of cost, amount of
inventory to be held by business, measurement of several resources pf the company, etc. helps it
in having a better analysis of its each business activity through which the managers unable to
evaluate the actual business performance and enhancing their efficiency in managing each
resources and business operations as well (Annual Report 2018, 2018).
1

2. Compliance of fundamental qualitative characteristic by Polynovo Limited
Qualitative characteristic are required to be fulfilled by those business organisation that
manufactures goods or services for the customers. Polynovo Limited also needs to comply with
these qualitative characteristic requirements at the time of disclosing financial performance of
the firm. Some major qualitative characteristic of the financial reports are as under:
Comparability: Each year, the company should compare its financial performance with
past performances. This comparability provides information about the enhancement or decline in
the efficiency of overall business organisation (Guță, 2017). Further, making comparison over
the time also unable the managers of Polynovo Limited in determining actual enhancement of
capability of the business as to analyse the actual result of their plans and policies and develop
their strategies accordingly.
Faithful representation : Each information provided in the books of accounts need to be
material. Inclusion of immaterial information would lead in reducing the effectiveness of the
financial reports. Further, it may also cause in gaining negative views over the financial reports.
Furthermore, development of accounting statements free from immaterial would also
help the business in attracting its users towards it and make them to take their decision in favour
of Polynovo Limited like making more investments in the business, etc.
3. Compliance with enhancing qualitative characteristics by Polynovo Limited
As per the accounting standard board of Australia, Polynovo Limited have to met
numerous financial requirements in context to the qualitative representation characteristic. The
company has complied with each of the requirement while preparing its accounting and financial
reporting as under:
Timeliness: A business needs to fix the timing for preparation of its financial statements.
Compliance of This measure helps the Polynovo Limited in developing appropriate timings as to
disclose the financial performance to its users (Martin, 2017).
. Further, by complying this measure, the firm will also become able to develop more adequacy
in fulfilling the requirements of the market.
Verifiability: As per the accounting standard board, theAnnual Report 2018 Polynovo
Limited needs to perpare the financial reports in such a way so that they could be easily verified
by its users. Development of reports as per the guidelines of accounting standard board helps the
2

Polynovo Limited in developing the statements effectively that could be easily varified by users
at the time of taking their decisions regarding the company.
4. Can the users of financial reports able to understand the financial reports of Polynovo Limited
Key users of the financial reports are investors, lenders, stakeholders, etc. of the business.
These are termed as the users of financial statements as they analyses each financial statements
as to analyse the actual condition of the business for the purpose of taking their decisions
regarding the Polynovo Limited. Further, as the company complies with each guidelines and
requirements of the Australian accounting standard board while preparing its financial reports of
the business provides the actual mirror image of the business (Mohajan, 2017).
. Investors analyses the financial position of the company as to repay their debts. In order
to this requirement, they analyses the balance sheet of the company. With the help of balance
sheet they analyse the liquidity of business through which they analyses their risk involved with
the Polynovo Limited investment and take appropriate decisions in this regard.
Further, the by analysing each financial, report of Polynovo Limited, its stakeholders
becomes able to determine how the funds provided by them are being used by the company.
Moreover, they also takes decisions regarding increasing or decreasing their shareholding in the
company.
5. Requirement of knowledge in users to analyse the financial reports
For the external users like investors, lenders, etc. having basic knowledge about the
accounting and commerce is enough as they do not need to have a complete analysis of the
overall business performance. Rather, they need to analyse some general measures about the
business like the liquidity, profitability etc. these can be easily analysed through the basic
knowledge.
Although, for the internal users of financial reports like managers, CEO, board of
directors, etc. it is essential to have a complete knowledge about the finance and accounting. As
for meeting their purpose from the financial reporting like development of strategies and plans,
developing business goals and objectives, etc. it is required to make a complete analysis of each
business operations (Schawel and Billing, 2018). In this regard, these users need to have
expertise knowledge about the commerce.
3

6. Have the Polynovo Limited met each requirement for general purpose reporting?
General purpose reporting requirements says that the financial reports should not contain
any error. It should content only material aspects of the business. Further, the financial reporting
should be developed in such a way so that its users can have a better analysis of each activities of
the business and help them in taking their decisions easily.
As per the annual reports of Polynovo Limited, the company has met each requirements
of the accounting standard board of Australia. It has lead in developing the accounting
statements in an effective manner (Suksantilap and et.al., 2017).
Further, by following each requirement of the business while preparing the financial
reports has helped the Polynovo Limited in preparing the statements in such a way so that it
could fulfil the basic requirements of its users as well.
Moreover, fulfilling each requirements of the accounting standard board helps the
company in developing the financial statements free from errors and mistakes and immeterial
things as well. Therefore, it can be analysed that the Polynovo Limited has developed its
financial statements by fulfilling the general purpose financial reporting requirements.
RECOMMENDATION
As per the above assignment, it can be analysed that the Polynovo Limited prepares the
accounting statements by complying with each basic requirement of the Australian accounting
standard board. Further, it can be recommended to the company that it should conduct audit of its
financial reports within a specific time. This will help the business in detecting errors from the
reports through which the company would become able to enhance the materiality of its financial
reports.
CONCLUSION
From the analysis of above study it cam be concluded that the Polynovo Limited has
fulfilled each requirement of the accounting standard board of Australia. The company has
developed its financial reports by complying with the requirements of measurement of the
conceptual farmework. Further, the company has also fulfilled qualitative characteristic
requirement of the accounting standard board. Compliance of each requirement has helped the
business in developing effective reports for the business so that it users can easily analyse the
reports and take appropriate decisions regarding company. Further, the internal users of the
rfeports need to have expertise knowledge about accounting principles. On the other hand, the
4

external users can analyse the reports just by having basic accounting knowledge. Further, the
study has also concluded that the Polynovo Limited has fulfilled the general purpose financial
reporting requirements.
5

REFERENCES
Books and journals
Afriyie and et.al., 2018. Application of BCG as a Strategic Planning Tool to Assess the
Sustainability and Growth of University Programs in a Competitive Market.
Bolisani, E. and Scarso, E., 2017. Knowledge-Based Selection of Customers: The
Opportunity/Profitability Matrix. In ECKM 2017 18th European Conference on
Knowledge Management(Vol. 1). Academic Conferences and publishing limited.
Guță, A.J., 2017. The analysis of strategic alternatives using BCG matrix in a company. Quality-
Access to Success. 18.
Martin, M., 2017. What Is a BCG Matrix?. URL: http://www. businessnewsdaily. com/5693-
bcgmatrix. Html.
Mohajan, H., 2017. An Analysis on BCG Growth Sharing Matrix.
Schawel, C. and Billing, F., 2018. BCG-Matrix. In Top 100 Management Tools (pp. 41-43).
Springer Gabler, Wiesbaden.
Suksantilap and et.al., 2017. A Survey of Demand Factors Utilized in the Facial Surgery Service
Business Using BCG Matrix. INTERNATIONAL JOURNAL OF APPLIED.10(2).
Online
Annual Report 2018. 2018. [ONLINE] Available through
:<http://polynovo.com.au/wp-content/uploads/2018/11/PolyNovo-AR-and-4E-2018-
FINAL.pdf>
6

7

8