Concept of Reporting Entity and Disclosures of Liabilities in Financial Accounting

Financial Accounting

Abstract
In Australia, it is compulsory for the reporting entity to comply with all accounting standard
approved by the Australian Accounting Standard Board. Effective and Qualitative information is
provided to the users of the financial statement with the help of the Reporting Entity. The
qualitative information assists the users to take the important decision. Further, the company also
comply with the disclosure required as per prescribed in the Accounting Standard related to the
provisions, contingent liabilities, Income tax and many other aspects.

Table of Contents
Introduction......................................................................................................................................4
Main Body.......................................................................................................................................4
Concept of Reporting Entity and how it assists in the creation of quality information for the
users of financial statement.........................................................................................................4
Analysis and comparison of Disclosures by both firms related to disclosure of liabilities
including provisions and contingent liabilities and compliance with the accounting standard...7
Analysis of disclosure of intangible assets in order to assess their compliance with relevant
accounting standard...................................................................................................................12
Analysis and comparison of both firms related to disclosure of Income Tax expense, benefits,
and obligation with relevant accounting standard.....................................................................15
Conclusion.....................................................................................................................................18
References......................................................................................................................................20

LIST OF FIGURES
Figure 1: Statement presenting movement for the year 2017 and 2018 of Woolworths Ltd........11
Figure 2: Intangible Assets of Woolworths Ltd. for the year 2017 and 2018...............................15
Figure 3: Intangible assets of JB Hifi for the year 2017 and 2018................................................16

LIST OF TABLES
Table 1 Statement of the current and non-current provision of Woolworth for the year ended
2018 (Amount in $M)....................................................................................................................13
Table 2 Statement of the current and non-current provision of JB hi-fi Limited for the year ended
2018 (Amount in $M)....................................................................................................................15

INTRODUCTION
The financial performance of the company can be evaluated by the financial information of the
entity stated in the financial reports. Usefulness and transparency of the information can be
enhanced by the disclosures by the firm in its annual report. The present study is related to the
concept of reporting entity and the manner in which it creates quality information for the users of
the financial statement. in the given study, disclosures of the two companies, namely Woolworth
and JB hi-fi Limited, also presented related to the provision and contingent liabilities. Further,
the comparison regarding the compliance of the Accounting Standard with the aspect of
expenses of income tax, intangible assets also stated in this report.
MAIN BODY
Concept of Reporting Entity and how it assists in the creation of quality information for the users
of financial statement
Reporting entities are that entity, in which the user for gaining the understanding related with the
financial position or performance of the company depends on the General Purpose Financial
Report. They make the decision On the basis of the information available in the financial report
of the company. The members of company, shareholders, investors, creditors, borrowers,
lenders, worker and others are included in the term of users of financial statement (Christensen,
Nikolaev, and Wittenberg‐Moerman, 2016). It is mandatory for the reporting entity to prepare its
financial statement as per the requirement of the General Purpose Financial Reporting
Framework. In, other words it can be said that they have to follow the all accounting standard
which are prescribed by the Australian Accounting Standard Board at the time of preparation of