Effectiveness of Coca-Cola Amatil Limited to Meet Conceptual Framework of Accounting

The report explains that Coca-Cola Amatil Limited is effective in explaining major financial reporting objectives through implementation of IFRS accounting framework. The company's financial statements are transparent and of high quality based on IFRS standard set. The report also considers the non-financial information disclosure of the company in adherence to the accounting framework. The implementation of IFRS accounting framework has a high impact on the development of financial statements of Coca Cola Amatil Limited. The company is recommended to review material issues yearly to ensure that it always reflects new insights from stakeholders and business. It is also effective in identifying material risks and opportunities that can enhance consumer interest and environmental regulation rapidly boosts.

Running head: EFFECTIVENESS OF CONCEPTUAL ACCOUNTING FRAMEWORK
Effectiveness of Coca-Cola Amatil Limited to Meet Conceptual Framework of Accounting
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1EFFECTIVENESS OF CONCEPTUAL ACCOUNTING FRAMEWORK
Executive Summary
Accounting conceptual framework of IFRS is deemed to explain uses of the company’s financial
statements along with aspects delivered by it. Financial results of Coca Cola Amatil Limited are
developed an alignment with International Financial Reporting Standards (IFRS) conceptual
accounting framework. There has been a high impact of IFRS on development of financial
statements of Coca Cola Amatil Limited for this has an impact on the calculation of parent’s
basis in foreign subsidiaries and impacting plans of cash repatriation. In addition, local tax rules
are focused on accounting standards there has been drastic effect of the same on the company’s
tax authorities in that jurisdiction. Cola Amatil Limited is recommended that material issues of
the company must be reviewed yearly that can facilitate Coca Cola Amatil Limited to make sure
that it always reflects new insights from the stakeholders and business.

2EFFECTIVENESS OF CONCEPTUAL ACCOUNTING FRAMEWORK
Table of Contents
1. Introduction..................................................................................................................................3
2. Major objectives of Financial Reporting Using IFRS Accounting Framework..........................3
3. Users of Coca Cola Amatil Limited’s Financial Statements Prepared by IFRS Accounting
Framework.......................................................................................................................................4
4. Chairman’s Report Aligned with IFRS Accounting Framework Followed by Coca Cola
Amatil Limited.................................................................................................................................5
5. IFRS Accounting Framework Impact on Coca Cola Amatil Limited Financial Report.............7
6. Coca Cola Amatil Limited Disclosure of Non-Financial Information Based on IFRS
Accounting Framework...................................................................................................................8
7. Material Financial Risks and Opportunities in Coca Cola Amatil Limited.................................8
8. Conclusion and Recommendations..............................................................................................9
References......................................................................................................................................11

3EFFECTIVENESS OF CONCEPTUAL ACCOUNTING FRAMEWORK
1. Introduction
International Financial Reporting Standard (IFRS) can be explained as accounting
standards developed by an independent and non-profit companies such as Accounting Standards
Board (Barth 2015). The objective of this report is to explain that the Coca Cola Amatil Limited
is effective enough in explain major financial reporting objectives through implantation of IFRS
accounting framework. Accounting conceptual framework of IFRS is deemed to explain uses of
the company’s financial statements along with aspects delivered by it (Brüggemann, Hitz and
Sellhorn 2013). In addition, the report will consider an ASX top 100 listed company that is Coca
Cola Amatil Limited’s non-financial information disclosure in adherence to the accounting
framework. This can facilitate the company in improving its financial report along with
identifying material risk and opportunities of the company.
2. Major objectives of Financial Reporting Using IFRS Accounting Framework
Considering the financial statements of Coca Cola Amatil Limited it has been gathered
that there are several objectives of financial reporting through implementation of IFRS
accounting framework (Coca Cola 2017). The ways in which the company is effective in
addressing such accounting framework objectives are explained under:
 Financial statements are prepared by the company in the public interest through
considering a set of understandable, high quality and enforceable IFRS accounting
standards. The financial statements prepared by the company is transparent and of high
quality based on IFRS standard set. Such transparent financial reporting of Coca Cola

4EFFECTIVENESS OF CONCEPTUAL ACCOUNTING FRAMEWORK
Amatil Limited supports its participants in the international capital market in taking
effective economic decisions (Cohen, Krishnamoorthy and Wright 2017).
 Implementing IFRS accounting standards has facilitated the company in promoting
regular application and use of the standard set for effective financial disclosure.
 IFRS accounting standards facilitates the company in addressing all its disclosure needs
for its investors (Crawford and Power 2015).
 For developing international financial reporting convergence, international and national
IFRS accounting standards offers the company with effective quality solutions
3. Users of Coca Cola Amatil Limited’s Financial Statements Prepared by IFRS
Accounting Framework
Important information prepared in adherence to IFRS accounting framework is able to
make sure Coca Cola Amatil Limited makes decisions if it has predictive or confirmatory value.
Predictive value supports the users of the company’s financial statements in predicting the future
outcomes (Dumay 2016). Additionally, confirmatory value provided by the company in
alignment with IFRS accounting framework facilitates the users in in checking and confirming
past predictions and anticipations. Materiality aspect of the company’s financial statement is
considered to affect the information in case it is misstated or omitted that can be used by the
users that generates a financial information basis regarding Coca Cola Amatil Limited.
In addition, as the company develops financial statements in adherence to IFRS
conceptual framework is expected to offer comparability which supports users in recognizing
differences and similarities between items (Li, Sougiannis and Wang 2017). Accounting
conceptual framework based financial statement information of Coca Cola Amatil Limited

5EFFECTIVENESS OF CONCEPTUAL ACCOUNTING FRAMEWORK
makes decisions if it has predictive or confirmatory value. Predictive value supports the users is
deemed to be highly useful for it is compared with information concerning other organizations
with similar information regarding same companies for a different date. In addition, IFRS
conceptual framework of accounting offers verifiability which makes sure information faithfully
indicates the economic process it effectively indicates to represent. This also signifies that
numerous observers might reach that consensus which signifies users of the company’s financial
statements that it indicates faithful representation as per IFRS accounting standards framework
(Moscariello, Skerratt and Pizzo 2014). IFRS based financial statements development framework
offers understandability which indicates the company has been effective in presenting its
financial statements in a manner that a user of financial knowledge and reasonable business
might be willing to study such information and comprehend it.
4. Chairman’s Report Aligned with IFRS Accounting Framework Followed by Coca Cola
Amatil Limited
As per the report of chairman that is explained within the financial statements of Coca
Cola Amatil Limited, the company has put more focus on the management along with the
revenue growth. Moreover, the recovery of the margins within the European market has
empowered within the conviction in order to continue the production optimization, route-to-route
market along with the logistics within the Russian and Nigerian market. The organization has
considered declaring yearly dividends in consideration to the fact that just 35% of
unconsolidated stay adjusted after tax IFRS revenues (Picker et al. 2016). In addition, the
consolidated financial statements of the organization can be presented by using values from the
consolidated financial statements of the organizations prepared in accordance to IFRS
accounting framework and is issued by IASB. The organization elaborates its EBITDA that is

6EFFECTIVENESS OF CONCEPTUAL ACCOUNTING FRAMEWORK
adjusted as operating profit before continuing the deductions for the impairment of property,
compensation for stock option, deductions for plant and equipment as well as adjustments with
intangible assets and non-cash items.
Coca Cola Amatil Limited effectively follows IFRS conceptual accounting framework
and ensures two qualitative characteristics of financial reporting as explained below:
 Relevance- In order to maintain relevance, Coca Cola Amatil Limited makes sure that its
financial information is timely reported. For example, in financial report of the company,
financial statements are issued after three weeks (Thornton 2015). The accounting period
is observed to have increased importance in comparison to financial statements that is
seven months later the period end. In addition, it is also observed that relevance of
financial information of the company is affected by its nature and materiality.
 Faithful Representation- Financial report of the company indicates financial information
and the aspects it represents based on IFRS accounting framework. For example,
company’s financial report is aligned with IFRS accounting standards and effectively
represents its assets and liabilities position along with results that take place after
analyzing the position of the company’s income and expenditure. The company
effectively abides by three characteristics of faithful representation mentioned by IFRS
accounting framework that includes error freed reporting, neutrality and completeness
(Macve 2015).
 Quality characteristics improvement might be segmented within four aspects including
timeliness, comparability, understandability and variability. Through implementing IFRS
accounting standards Coca Cola Amatil Limited effectively classifies and characteristics
its financial reporting through IFRS accounting standards clearly and concisely that

7EFFECTIVENESS OF CONCEPTUAL ACCOUNTING FRAMEWORK
makes financial statements understandable and of superior quality (Schaltegger and
Zvezdov 2015).
5. IFRS Accounting Framework Impact on Coca Cola Amatil Limited Financial Report
Financial results of Coca Cola Amatil Limited are developed an alignment with
International Financial Reporting Standards (IFRS) conceptual accounting framework. Based on
such standard, the company considers annual declaration of dividends so that around 35% of
unconsolidated is adjusted after tax IFRS profits. In addition, the company’s consolidated
financial statements are presented by using values from consolidated financial statement of the
company prepared in alignment to IFRS accounting standards and issued through IASB. There
has been a high impact of IFRS on development of financial statements of Coca Cola Amatil
Limited for this has an impact on the calculation of parent’s basis in foreign subsidiaries and
impacting plans of cash repatriation. In addition, local tax rules are focused on accounting
standards there has been drastic effect of the same on the company’s tax authorities in that
jurisdiction.
Implementation of IFRS accounting framework of Coca Cola Amatil Limited has an
effect on its statutory reporting that is accomplished primarily and resulted in huge
implementation of consistent set of accounting standards. This also represents an opportunity for
standardizing and centralizing statutory reporting activities. IFRS conceptual accounting
framework implementation by the company requires vital changes to the company’s accounts
and modifications chart for collecting IFRS based information requirements. In addition, it also
has an effect on general ledger accounting of the company that accommodated numerous ledgers.
Coca Cola Amatil Limited is effective in explaining its adjusted EBITDA as operating profit

8EFFECTIVENESS OF CONCEPTUAL ACCOUNTING FRAMEWORK
prior making adjustments with intangible assets and non-cash items. IFRS conceptual accounting
framework has positive impact on the company’s financial statements that might be observed
within return on invested capital that happens to be an indicator of the company’s performance
and not as replacement for measures such as profit after tax focused on operating profit and
investors of the company as explained by IFRS.
6. Coca Cola Amatil Limited Disclosure of Non-Financial Information Based on IFRS
Accounting Framework
Taking into account the IFRS accounting framework standard Coca Cola Amatil Limited
is intended to disclosure all the necessary non-financial information in order to enhance all its
financial assets (Mignolet 2017). The company follows this accounting framework in making
sure of its effective corporate governance conducts, the social responsibility committee of the
board as well as the decision makers by means of regularly reviewing the priorities of the
company in accordance with changing the issues as well as expectations. Corporate social
reporting is totally centered on disclosure of non-financial information for IFRS standards that
makes it necessary that effective governance as well as transparent reporting is essential for
generation of long term value. Best practices associated with effective corporate governance
have an important role in dealing with opportunities and risks and also maintaining shareholders
trust (Brouwer, Faramarzi and Hoogendoorn 2014). Coca Cola Amatil Limited’s non-financial
disclosure are held responsible for dealing with merchandising manufactured branded beverages
to the customers which is highly accountable for consumer marketing and outlet execution.

9EFFECTIVENESS OF CONCEPTUAL ACCOUNTING FRAMEWORK
7. Material Financial Risks and Opportunities in Coca Cola Amatil Limited
In accordance with IFRS conceptual accounting framework, Coca Cola Amatil Limited
centers on implementation and focus on risk management process with annual review of material
financial risks effectiveness. There are some material financial risks that are recognized in
business opportunities and risks area (Li, Sougiannis and Wang 2017). Some material risk is
identified for the company that encompass strategy of risk transfer through insurance means.
IFRS accounting framework implementation supports the company in identifying vital risks and
its associated effects and reporting company’s progress and approach through considering
material issues transparently.
Through implementing IFRS accounting conceptual framework, the company is highly
effective in reviewing material issues annually that facilitates Coca Cola Amatil Limited to
entertain that this always indicates fresh insight from business and stakeholders (Mardini,
Crawford and Power 2015). The company effectively identifies the material opportunities that
are there within environmental and social impact of the company’s conducts fir consumers. This
has an important opportunity as the organization can recognize its importance which can enhance
consumer interest and environmental regulation rapidly boosts. Certain material risks that is
observed to be high includes demand to the reputation of the organization from compliance with
marketing standards along with ethics and boosting transparency concerned with the marketing
practices. This is because of the reason that the organization was not that capable to align with
certain marketing standards which can drastically effect the company’s reputation along with
relationship with customers (Markelevich, Riley and Shaw 2015).

10EFFECTIVENESS OF CONCEPTUAL ACCOUNTING FRAMEWORK
8. Conclusion and Recommendations
The objective of this report is to explain that the Coca Cola Amatil Limited is effective
enough in explain major financial reporting objectives through implementation of IFRS
accounting framework. From the paper it is gathered that financial statements are prepared by the
company in the public interest through considering a set of understandable, high quality and
enforceable IFRS accounting standards. Moreover, it is also gathered that the company’s
financial report is aligned with IFRS accounting standards and effectively represents its assets
and liabilities position along with results that take place after analyzing the position of the
company’s income and expenditure. The company effectively abides by three characteristics of
faithful representation mentioned by IFRS accounting framework that includes error freed
reporting, neutrality and completeness. Coca Cola Amatil Limited is recommended that material
issues of the company must be reviewed yearly that can facilitate Coca Cola Amatil Limited to
make sure that it always reflects new insights from the stakeholders and business. The
organization is also recommended to elaborates its EBITDA that is adjusted as operating profit
before continuing the deductions for the impairment of property, compensation for stock option,
deductions for plant and equipment as well as adjustments with intangible assets and non-cash
items.

11EFFECTIVENESS OF CONCEPTUAL ACCOUNTING FRAMEWORK
References
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Perspectives, 14(3), pp. 154-167.
Brouwer, A., Faramarzi, A. and Hoogendoorn, M., 2014. Does the new conceptual framework
provide adequate concepts for reporting relevant information about performance?. Accounting in
Europe, 11(2), pp.235-257.
Brüggemann, U., Hitz, J. M. and Sellhorn, T. 2013. Intended and unintended consequences of
mandatory IFRS adoption: A review of extant evidence and suggestions for future
research. European Accounting Review, 22(1), pp. 1-37.
Coca Cola, 2017. Coca Cola Annual Report. [online] Coca-colacompany.com. Available at:
<http://www.coca-colacompany.com/content/dam/journey/us/en/private/fileassets/pdf/
investors/2016-AR-10-K.pdf> [Accessed 1 Dec. 2017].
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financial reporting process: The experiences of audit committee members, CFOs, and external
auditors. Contemporary Accounting Research, 34(2), pp. 1178-1209.
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financial statements about the adoption of IFRS 8. Journal of Applied Accounting
Research, 16(1), pp. 2-27.
Dumay, J. 2016. A critical reflection on the future of intellectual capital: from reporting to
disclosure. Journal of Intellectual capital, 17(1), pp. 168-184.

12EFFECTIVENESS OF CONCEPTUAL ACCOUNTING FRAMEWORK
Li, S., Sougiannis, T. and Wang, I. 2017. Mandatory IFRS Adoption and the Usefulness of
Accounting Information in Predicting Future Earnings and Cash Flows.
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