Understanding Financial Accounting and Preparation of Financial Statements

This article discusses the purpose of accounting, compliance with regulations, and preparation of financial statements. It also highlights the challenges faced while performing research and suggests ways to improve research skills.

Running head: FINANCIAL ACCOUNTING
Financial Accounting
Name of the Student:
Name of the University:
Author Note:

1FINANCIAL ACCOUNTING
Task 2
While performing the research for task 1, I learnt the actual meaning of accounting and purpose
of accounting in the practical day-to-day business. I understood the reason why an accounting
system should indicate a clear picture to the management, as it helps them in proper planning,
controlling and in deciding the next step even in complying with statutory regulations. I came to
know that every business has different accounting system as per its nature of business. Further
while going through the purposes of compliance regarding the statement. I learnt that financial
report is prepared for the general purpose in accordance with the need of the Corporations Act
2001, Australian Accounting Standards and other commanding assertions of the Australian
Accounting Standards Board. (Lee and Parker 2014). The financial report should complies with
IFRS as delivered by the IASB. I noticed that the financial report prepared for Chief.Ltd and its
subsidiary has been equipped on a historical cost basis, all identifiable net assets of Sub.Ltd is
measured at fair value. Consolidated financial statements is prepared as a purpose, that the
company is a for profit entity. I learnt that the currency, at which statements should be presented,
should be according to ASIC. I learnt that the investment made by Chief.ltd in Sub.Ltd is
according to the amendments in IAS that stated an option of equity method for investing in
associates, joint venture and subsidiaries. The issues I noticed while preparing the consolidated
financial statement is adjusting the assets and liabilities of the subsidiary company.
I have been able to understand the guidelines of preparing the financial statements. The
research helped me to enhance my accounting skills. Possessing a sound knowledge on the
concept of principle of accounting it was easier for me to understand the entries and adjustments
related to the consolidation. The problem faced while performing the research was about the sets
of rules that the company has to opt for a particular item. (Schaltegger, Etxeberria and Ortas

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2017). To improve and build my knowledge about the set of guidelines by AASB related to
different matters occurring in the course of business. The list of action for improvement of my
research skills are:
 I would cite my resources correctly and would refer the articles that are well cited with
the material.
 As there are many articles present in the internet henceforth, I would bookmark the
information I would find valuable for my research work.
 I would mainly focus to get the material information regarding my research that are
based on current journals, business magazines and related books so that I can understand
the latest leads, ideas and trends of the business.

3FINANCIAL ACCOUNTING
Reference:
Lee, T.A. and Parker, R.H., 2014. Company financial statements: an essay in business history
1830–1950. In Evolution of Corporate Financial Reporting (RLE Accounting)(pp. 27-51).
Routledge.
Schaltegger, S., Etxeberria, I.Á. and Ortas, E., 2017. Innovating corporate accounting and
reporting for sustainability–attributes and challenges. Sustainable Development, 25(2), pp.113-
122.