Crown Resort Limited - Accounting Concept Analysis

This report analyzes the accounting concepts used by Crown Resort Limited and discusses the conceptual framework and measurement in accounting. It also explores the fundamental qualitative characteristics of financial information. The objective is to provide a brief understanding of accounting concepts and frameworks used by the company.

Running head: CROWN RESORT LIMITED – ACCOUNTING CONCEPT ANALYSIS
CROWN RESORT LIMITED – ACCOUNTING CONCEPT ANALYSIS
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1CROWN RESORT LIMITED – ACCOUNTING CONCEPT ANALYSIS
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Crown Resort Limited............................................................................................................2
Accounting Concepts.............................................................................................................3
Conceptual framework and measurement in accounting.......................................................5
Fundamental Qualitative Characteristics...............................................................................7
Conclusion..................................................................................................................................9
References................................................................................................................................10

2CROWN RESORT LIMITED – ACCOUNTING CONCEPT ANALYSIS
Introduction
The report titled “Crown Resort Limited – Accounting Concept Analysis” is
prepared to analyse the several accounting concept of the Crown resort limited. This report
analyse the annual report of the Crown Resort Limited for the year 2018 for identify the
accounting concepts used by the company. The report identify the accounting concepts used
by the firm in reporting the business transaction of the firm. Secondly, the report explains the
conceptual framework and the concept of measurement in accounting. This paper also discuss
the issues of measurement faced by the Crown Resort Ltd. Lastly, the report provides the
details of the fundament qualitative characteristics including the relevance and
representational faithfulness of the financial statement’s information. The report also
provides the examples of the Crown Resort Limited. The objective of the paper is to provide
the brief knowledge of the various accounting concept and framework of accounting along
with their applications in the Crown Resort Limited. This also identifies the accounting
standards and framework used by the firm in the basis of the information provided by the
company in the annual report of 2018.
Discussion
Crown Resort Limited
The Crown Resort Limited is an Australian based entertainment group. This is one of
the largest entertainment group of Australia and make major contribution to the Australian
tourism, social responsibility and employment. The core business of the group are in the
integrated resorts sector (Crownresorts 2019). In Australia, the Crown Resort Limited wholly
owns and operates two leading integrated resorts named Crown Melbourne Entertainment
Complex and Crown Perth Entrainment complex. The company also fully owns and operates

3CROWN RESORT LIMITED – ACCOUNTING CONCEPT ANALYSIS
Crown Aspinalls in London. The Crown Resort Limited have interest in the several
development projects as well as the digital businesses.
Accounting Concepts
The accounting concept are procedures and rule of reporting the business transactions
of the in the books of account. There are various accounting concepts that the firm must use
while reporting the business transactions in the books of account. This accounting concept
helps the firm to develop the strong foundation of the firm in the initial stage (Schaltegger
and Burritt 2017). The every firm need to follow these accounting concepts while reporting
their financial business transaction. These concepts are developed to ensure the uniformity in
the financial reporting of the entire firm. The followings are the some important accounting
concepts: -
 Accrual concept: - This concept said that all the revenue is reported when earned and
all the expenses are recorded when it actually paid. This concept is all about the
revenue earned and the expenses incurred by the firm. This concept ensures that the
revenue earned by the firm must be recorded in the account at the time when the firm
actually received the fund. On other hand, all the expenses incurred by the firm must
be recorded at the time actual payment. This is because the actual payment of the
expenses and the actual amount received in terms of the profit or revenue may varies
to the recognised value of expenses and incomes (Kieso, Weygandt and Warfield
2016). The Crown Resort Limited uses this concept in the process of reporting the
revenue of the firm and the payment of the suppliers.
 Going concern concept: - The going concern concept is another accounting concept
for reporting the business transactions of the firm in the books of account. In this
concept, the accounting report of the firm is prepared by assuming that the firm will
be continue in operation in the near future. By using this concept, the firm deferred

4CROWN RESORT LIMITED – ACCOUNTING CONCEPT ANALYSIS
the recognised revenue and the expenses into the future reporting period, which are
not actually received in the current accounting period. If firms does not imply the
going concern concept in their financial reporting process then all the expenses
recognised by the firm will be accelerated into the current period (Granof et al 2016).
Here, the Crown Resort Limited reports the receivables and payable or the creditors
and debtors in the balance sheet of the firm in the basis of the going concern concept.
 Matching concept: - As per this concept, the expenses related to the revenue must be
recognised in the same accounting period in which the revenue is recognized. This
concept eliminates the deferral of expenses recognized in the future accounting
period. This also ensure the all the aspects of a transaction have recorded in the same
accounting period in the financial report of the firm. Crown Resort Limited uses this
concept to report the revenue and the cost of goods sold.
 Materiality concept: - This ensure that the business transaction of the firm must be
reported in the financial report of the firm after actually happening the transaction.
This ensures that the financial report of the company must provide the actual position
of the firm and does not provide the false information of the financial transaction of
the firm to the readers of the annual report (Kaplan and Atkinson 2015). If this not
follows in the financial reporting process of the firm then firm will records all those
transaction those are not actually executed by the firm. Hence, affect the financial
position of the firm and can miss guide the readers of the financial report about the
performance of the firm. The Crown Resort Limited uses this concept in preparing the
annual report in whole.
 Economic entity concept: - The economic entity concept says that the business or the
company is fully separate from its owners. As per this concept, the company and the
owner of the company are the separate legal entity. By applying this concept in the

5CROWN RESORT LIMITED – ACCOUNTING CONCEPT ANALYSIS
reporting process of accounting transaction the firm must shows the transaction
between the company and the owner of the firm too. In the basis of this concept, the
Crown Resort Limited shows all the dividend payment to the shareholders of the firm
as the shareholders are the owner of the firm.
Conceptual framework and measurement in accounting
The conceptual framework is basically an analytical tool that have the several context
and variations. This is used to analyse and determine the overall performance and positions of
any firm. This helps the user to make the idea about the firm and their performance. The
proper framework analyse the firm in a better way and provides the real idea about the firm in
such a easy way (Beaulieu, Sarker and Sarker 2015). The conceptual frame work also be used
in the several other performance of the financial related function of the firm. This also
provides the guideline to the firm in respect of the preparing the financial report of the firm.
The objective of the conceptual framework is to ensure the fair reporting of the financial
information by the firm and to provide the true information about the firm to the readers of
the financial statement of the company.
While, the measurement in accounting means the computation of the financial as well
as the economics activities of the firm in terms of money, unit or the hours. This is also a unit
to measure and compare the accounting of the firm. All the accounting as well the economic
activities of the firm need to be measures in the terms of the money, unit or the hours to
compare the activities of the firm with the activities of other firms (Gaynor et al 2016). There
are various method of measuring the activities of the firm. Here, the Crown Resort Limited
mainly use the following accounting measurement tool in their financial reporting process: -
A. Historical cost: - The Crown Resort Limited used the Historical cost in measuring
the financial and economic activity of the firm like assets of the firm except the some

6CROWN RESORT LIMITED – ACCOUNTING CONCEPT ANALYSIS
items. The historical cost is the tool of measuring the asset of the firm. This method
value the assets of the firm in their original cost or the nominal cost in which the
assets are acquired by the firm. This method is also recommended by the generally
accepted accounting principles (Carmona 2018). This is the most common method of
determining the value of the assets. This method have the several benefits hence this
method have the following issues: -
 Out dated figures: - In this, the value of the assets shown in the balance sheet
is measured in the cost in which the asset is acquired by the firm. Thus, this
method represent the out dated figures of the assets.
 Overstated figure: - If the profit of the firm depends on the value of the
capital at the different dates, then the profit of the firm will have two
meaningless values, as the capital balance of the firm does not consider the
purchasing power of the shareholders.
 Misleading: - The historical cost usually mislead the impression of the
company in terms of company’s ability to operate in the given level as this
method undervalue the assets of the firm.
 Incomparability: - The historical cost method of valuation can also
misleading the financial trend impression of the firm (Collier 2015). This will
only comparability between the years if the restated results are adjusted to the
general price level.
B. Fair Value: - The Crown Resort Limited measures the derivative financial
instruments, investment and the contingent consideration in the fair value. The fair
value method of valuation used the market price of the asset and liabilities to report in
the financial report of the firm. The fair value is the estimated value or the current
market value of the asset in which the asset can be sold. The fair value is calculated in

7CROWN RESORT LIMITED – ACCOUNTING CONCEPT ANALYSIS
the basis of various terms like current market conditions and likes (Badia et al 2017).
This method of valuation of asset has the several advantages although the followings
are the some issues of the fair value: -
 Frequent changes: - In the todays volatile market the value of the assets
changes quite frequently. This frequent change in the value of assets affects
the valuation and the profitability of the firm. The publicly traded companies
find difficulties in the valuation of the stocks in this method as the value of
the inventory keeps changing and this also infect the profit of the firm.
 Less reliable: - The many accountants find the fair value less reliable than the
historical cost method. As the accountant need to do the market research at
the time of reporting the asset to determine the current value of the company
(Gamayuni 2015). The problem also arises when the asset have different
market value in the different regions.
 Inability: - The fair value method of valuation become unable to value the
assets in those firms, which have some specialized assets or the investment
package. As in the open market, the information of such specialized asset is
not available. In this case, ascertaining the valuation of the asset become very
difficult in the absence of the asset related information in the market.
 Reduces the book value: - This method of the valuation of assets consider
the market value of the asset hence, this method reduces the value of the
assets compared to the historical cost method value. The historical cost
method used the value of the asset at the time of acquisition but fair value
decrease the value of the asset in the basis of the current market price of the
asset. Resulting, the total valuation of the firm is also decreases.

8CROWN RESORT LIMITED – ACCOUNTING CONCEPT ANALYSIS
Fundamental Qualitative Characteristics
The qualitative characteristics means the quality of the financial information reported
by the firm in the financial report of the firm. The qualitative characteristics measures and
maintain the quality of the financial information shared by the company in the annual report
of the firm for the stakeholders of the firm (Nobes and Stadler 2015). Mainly, the demand for
the financial information by the investors, creditors and the other stakeholders of the firm
creates the qualitative characteristics that are desirable in the accounting report of the firm.
The qualitative characteristics of the financial information has been divided in the two part,
fundamental and enhancing characteristics. Here, this report discuss about the fundamental
qualitative characteristics. There are mainly two type of qualitative aspect in the fundamental
qualitative characteristics, those are follows: -
 Relevance: - The relevance means the how much the information is relates and
helps in the decision making process. The relevant accounting information must
consider the confirmatory as well as the predicted value of the financial activities
of the firm. Here, the confirmatory value means the past value and information of
the financial events and the predicted value means the predicted future value and
information of the financial events of the firm. The information are only consider
as the relevant if it provides the both the helpful value of the business event for
decision- making. Here, Crown Resort Limited provides the relevance financial
information in the financial report. As the company shows the values of the last
year in their current year’s financial report (Banks 2018). The firm also shows the
projected value of the different event to calculate and report the different
provision created by the firm and to ascertain various other values like employee
benefits and like. This past and future value and information of the firm helps the
stakeholder in their decision making process.

9CROWN RESORT LIMITED – ACCOUNTING CONCEPT ANALYSIS
 Faithfulness: - The faithfulness of the information means that the information
shared by the firm in their annual report are accurate and true. The faithfulness in
the financial information helps to determine the true and fair financial picture of
the firm. The information is consider faithful if the financial statement reported is
complete, neutral and error free. The neutral means the information must not be
bias (Cohen and Karatzimas 2017). The complete refers that the report must not
exclude any transaction. Lastly, the report must not have any errors in their
information. The Crown Resort Limited annual report ensures the entire three
requirement by auditing their information from the independent auditor. Hence,
financial information provided by the Crown Resort Limited in their annual report
can be consider as faithful.
Conclusion
This paper concludes that the Crown Resort Limited is an Australia based resort
company. This is one of the biggest resort company of Australia. The company prepares its
annual report in the basis of the different accounting standards like going concern concept
and like. The Crown Resort Limited uses the historical cost and the fair value method to
measure its assets. The both method is useful for the firm but have different issues. Lastly,
the paper concludes that the fundamental qualitative characteristics are the relevance and the
faithfulness. The Crown Resort Limited provide the relevance and faithfulness in their
financial information reporting as the firm provides the information for both past and future
value of the firm as well as the neutrality, free of error and complete information.

10CROWN RESORT LIMITED – ACCOUNTING CONCEPT ANALYSIS
References and Bibliography
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11CROWN RESORT LIMITED – ACCOUNTING CONCEPT ANALYSIS
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