Current Issues in Accounting

CURRENT ISSUES IN
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Australian Accounting Policies................................................................................................1
2. Selection of accounting policies when no accounting standard is specified...........................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
The project shall be describing the accounting policies that are followed in Australia for the
preparation of the financial statements. It shall also be showing how accounting policies must be
used in the absence of specified accounting standard for the transaction. Further it shall highlight
the major policies like full disclosure, measurement and recognition shall serve the purpose by
preventing from the negative impact of creative and professional judgement accounting.
MAIN BODY
1. Australian Accounting Policies
The Australian accounting policies are the rules, procedures and practices that are used for the
preparation of the financial statements. These policies must be applied with consistency by the
companies and should not change it until it is significantly required by the accounting standards
or will produce more relevant results for the users of financial statements (Rodriguez Bolivar and
Galera, 2016). Such policies shall be playing key role in presenting the financial statements in
the absence of specific accounting standard for the transaction. Using the basic principles like the
disclosure, measurement and recognition, the true and fair view of the financial performance and
profitability can be gained (Accounting Policies, 2021). Also, the use of accounting policies shall
be done in such a way that it ensures materiality in all aspects, free from bias and can be used for
economic decision-making process.
Some prudently used accounting policies that are used are:-
 Fair Value Measurement- The fair value principle in accounting states that the assets and
liabilities of the corporation must be shown at their fair value in the financial statements
prepared for the users (Saj and Cheong, 2020). The fair value in this respect shall mean
the price that is received on the sell of an asset and transfer of a liability in the free
market among the market participants. The fair value shall be assumed based on the best
use and economic interest of the market participants.
 Full Disclosure- This principle of accounting states that all the relevant and necessary
information should be presented in the financial statements that can be used in the
decision-making process by its users. The methods used for the calculations of
depreciation, inventory valuation, change in accounting policies, future contingencies and
the material losses. These disclosures are important to analyse the financial statements
prudently (Abdo, 2016).
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