Reporting Entity and Capital Maintenance: A Study on Woolworths Group and Crown Resorts - Desklib

Financial Accounting

Abstract
An investment decision can be referred to decision made with respect to application of funds
required to be deployed in an investment. The available investment opportunity can be judged
appropriately only when financial, as well as financial information relating to same, is
available in transparent manner. The present report provides discussion relating to reporting
entity and capital maintenance. The study asserts that management is able to judge that
whether organization is having adequate level of income through application of aspects of
physical capital maintenance. Disclosure relating to provisions, contingent liabilities and
contingent assets have been analysed regarding Woolworths Group and Crown Resort. It has
been assessed that both the companies have complied with provision of AASB 137 in an
appropriate manner.

Table of Contents
Introduction................................................................................................................................4
Part 1:.........................................................................................................................................4
Part 2..........................................................................................................................................6
Part: 3.........................................................................................................................................9
Conclusion................................................................................................................................11
References................................................................................................................................12

Introduction
An investor takes investment decision after assessing financial statements in detail manner
regarding any entity. Investment decision could be taken with ease if the accounting
information provided in the financial report is transparent (prices (Talamo and Atta, 2019).
The present study emphasizes discussion relating to characteristic of reporting entity and their
classification for the purpose of drafting financial statements. Further the concept of capital
maintenance has been explained in detail manner. Lastly, disclosure of provision, contingent
liabilities and contingent assets of Woolworths Group Ltd and Crown resorts have been
compared, and recommendation has been provided in order to increase the transparency of
accounting data by considering the provision of AASB 137.
Part 1:
Reporting entity can be referred as an alternative term for accounting entity. It is an
organization on which users can depend for making appropriate decision relating to financial
and non-financial information provided in general purpose financial report (GPRF). The users
could be shareholders, investors, members or creditors. The reporting entity could be an
individual entity, or a group consists of parent along with all of its regular subsidiaries. This
definition is given in AASB 1053 is consistent with definition within IASB and AASB
conceptual framework to significant extent (Saha, Morris and Kang, 2019). If any entity is
not deemed as reporting entity then this will be not essential for producing GPRFs, not even
required for complying with every accounting standard. When an organization is defined as
reporting entity it is necessary for same to provide GPRF which eventually leads to
compliance with applicable Australian Accounting Standard (Talamo and Atta, 2019).
However, in case of special purpose financial report is drafted than it is not necessary to
apply all Australian Accounting Standards and disclosure of the specified fact is stated in
financial statements. Specifically, its users could be members, shareholders, creditors,
potential investors and lenders. The main characteristics are that it is essential for preparing
GPFR as it signifies that all Australian Accounting Standards should be complied in
preparation of financial report.
An organization is categorized as reporting entity which is drafts its financial statement on
the basis of requirement of its users. On same basis entity has capability for commanding the