Corporate and Financial Accounting

CORPORATE AND
FINANCIAL ACCOUNTING

EXECUTIVE SUMMARY
The study conducted is based on the accounting reporting standards in Australia. It gives an
insight into the understanding of financial reporting requirements, gives information about the
framework’s strengths and weaknesses. Concept of reporting entity has been examined critically
and the implication of classification of reporting entity in terms of accounting standards has been
emphasised. Business combination or acquisition analysis has been illustrated. Questions like
fair value of consideration, components of acquisition costs, acquisition of identifiable assets,
valuation of assets, liabilities and contingent liabilities has been done. It gives an analysis of
company’s disclosure on acquisition or business combination.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
PART 1............................................................................................................................................4
(i) Conceptual Framework for Financial Reporting....................................................................4
(ii) Reporting Entity.....................................................................................................................6
PART 2............................................................................................................................................8
(i)..................................................................................................................................................8
(ii)................................................................................................................................................8
(iii)...............................................................................................................................................8
(iv)................................................................................................................................................9
(v).................................................................................................................................................9
(vi)..............................................................................................................................................10
(vii)............................................................................................................................................10
(viii)...........................................................................................................................................11
(ix)..............................................................................................................................................11
(x)...............................................................................................................................................11
(xi)..............................................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
The corporate and financial accounting is the most significant part of an organization
because it helps them to record and manage the daily transactions in the books of account. The
report will focus and describe the role and importance of Australian Accounting Standards for
reporting entity in order to prepare and present financial statement.
PART 1
(i) Conceptual Framework for Financial Reporting
It describes the objective and concepts which are required for general purpose financial
reporting. It is a tool which:
a) Helps the IASB- International Accounting Standards Board for developing standards
which are based on concepts which are consistent.
b) Helps preparers for making accounting policies which are consistent in lieu of no
standard applying for a transaction in particular or event or when standard permits a
choice of accounting policy (Garg, Peach and Simnett, 2020).
c) Assistance from others for understanding and interpreting the standards.
The merits which can be seen in the framework assisting financial reporting are:
a) It provides a clarification that information required for meeting the financial reporting
objective includes information which can be used for assessing the management’s
stewardship of the resources’ entity
b) Tells about role of prudence and substance in reporting of financials.
c) Clarification that top level of measurement uncertainty can make the information of
financials less relevant
d) Clarification that prominent decisions on, for instance recognition and measurement are
driven by taking in consideration nature of information resulting about financial
performance and position financially.
e) Providing clarity in definitions of assets and liabilities and guidance extensively on
supporting the definitions.
Effects of the revised framework