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FINANCIAL REPORTING 6 FINANCIAL REPORTING

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Added on  2021-05-31

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It is the obligation on the Australian business entities to make compliance with the standards of Australian Accounting Standard Board (AASB), Australian Accounting Standards and other accounting regulatory body while conducting the accounting and financial reporting related transactions (Nobes 2014). The aim of this essay is to assess the financial statements of one of the Australian business entities, Farm Pride Foods Ltd, and then to address different kinds of financial issue in the company. Requirement 1 As per the 2017 Annual Report of Farm Pride Foods Ltd, the

FINANCIAL REPORTING 6 FINANCIAL REPORTING

   Added on 2021-05-31

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Running head: FINANCIAL REPORTINGFinancial ReportingName of the StudentName of the UniversityAuthor’s Note
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1FINANCIAL REPORTINGIntroductionThe requirement for the business organizations is to make compliance with differentkinds of principles and standards while performing the business operations. One of such area isaccounting operations of the companies. It is the obligation on the Australian business entities tomake compliance with the standards of Australian Accounting Standard Board (AASB),Australian Accounting Standards and other accounting regulatory body while conducting theaccounting and financial reporting related transactions (Nobes 2014). The aim of this essay is toassess the financial statements of one of the Australian business entities, Farm Pride Foods Ltd,and then to address different kinds of financial issue in the company. Some of the major areastaken into consideration in this essay are provisions, contingences, measurement issues, leaseaccounting, description of non-current assets, qualitative characteristics, alternative valuationmethod and others.Requirement 1As per the 2017 Annual Report of Farm Pride Foods Ltd, the company has two types ofprovisions; they are Current provisions and Non-current provisions. The main items undercurrent provision are employee benefits, annual leave and long service leave. The major itemsunder non-current provision are long service leave benefits and aggregate employee benefitsability. In the year 2017 and 2016, the company recognized additional provisions of $961,000and $820,000 respectively. Provision used during the years is $790,000 and $699,000 for 2017and 2016 respectively (farmpride.com.au 2018).
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2FINANCIAL REPORTINGIn the 2017 Annual Report, Farm Pride Foods Ltd has disclosed a contingent liabilityrelated to the allegation made by the Australian Competition and Consumer Commission(ACCC) on Farm Pride Foods Ltd for Egg Cartel Appeal. The full court of the Federal Court ofAustralia heard the appeal on 15th August 2016. This is the only case of contingency recorded byFarm Pride Foods Ltd in the annual report (farmpride.com.au 2018).Requirement 2As per the 2017 Annual Report of Farm Pride Foods Ltd, the company recognizes theirprovisions when the company has a constructive or legal obligation due to any past event andthis obligation makes it probable that there will be a future flow of economic benefits or cashoutflow that can be reliably measured. The company uses the current pre-tax rate for discountingthe provisions in case the time value of money is material. At the time of using the discountingmethod, the increase in provision as a result of passage of time is considered as a finance cost(farmpride.com.au 2018).The 2017 annual report also states that Farm Pride Foods Ltd uses to disclose thecontingencies of their business based on the net of the amount of Goods and Service Tax (GST)recoverable or payable to the taxation authority. The increase in contingent rental provisions isdone with reference to the CPI or market (farmpride.com.au 2018).Requirement 3In the 2017 Annual Report, Farm Pride Foods Ltd has disclosed a contingent liabilityrelated to the allegation made by the Australian Competition and Consumer Commission(ACCC) on Farm Pride Foods Ltd for Egg Cartel Appeal (farmpride.com.au 2018). There can be
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