Financial Reporting Disclosures in the Australian Corporate Sector

Running head: FINANCIAL REPORTING DISCLOSURES IN THE AUSTRALIAN
CORPORATE SECTOR
Financial Reporting Disclosures in the Australian Corporate Sector
Name of the Student:
Name of the University:
Author’s Note:
Course ID:
ACCG224 S3 2018 SID

FINANCIAL REPORTING DISCLOSURES IN THE AUSTRALIAN CORPORATE
SECTOR
Table of Contents
Executive Summary:..................................................................................................................2
Introduction:...............................................................................................................................3
1. Objective of general purpose financial reporting and qualitative characteristics of useful
financial information:.................................................................................................................3
2. Extent to which the latest annual report of BHP Billiton meets the disclosure requirements
for PPE as per AASB 116:.........................................................................................................4
3. Extent to which the PPE disclosures of BHP Billiton satisfy fundamental and enhancing
qualitative characteristics of useful financial information:........................................................5
4. Alignment of the PPE disclosures with the objective of general purpose financial reporting
and actions for improvement for BHP Billiton:.........................................................................6
Conclusion:................................................................................................................................6
References:.................................................................................................................................7
Appendix:...................................................................................................................................8
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ACCG224 S3 2018 SID

FINANCIAL REPORTING DISCLOSURES IN THE AUSTRALIAN CORPORATE
SECTOR
Executive Summary:
The primary emphasis of the research report is to analyse the PPE disclosures of BHP
Billiton according to its latest annual report and whether it satisfies the objective of the
conceptual framework. It investigates and assesses the ways through which PPE obtains the
obligations of AASB 116 and qualitative characteristics. The PPE appearance accomplishes
the requirement of accounting standards and thus, BHP Billiton has complied with all aspects
of AASB 116 and IASB conceptual framework.
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ACCG224 S3 2018 SID

FINANCIAL REPORTING DISCLOSURES IN THE AUSTRALIAN CORPORATE
SECTOR
Introduction:
The objective of the report is to provide faithful and accurate representation of the
financial statements, which is crucial for all business organisations owing to the effects on the
community status and self-assurance of the investors. The scope of the paper would initially
focus on elucidating the objectives of general purpose financial reporting along with
qualitative characteristics of valuable financial information. The second section would lay
stress on analysing the latest published annual report of an ASX listed organisation to
understand whether the same fulfils the PPE disclosures in accordance with AASB 116. For
this reason, BHP Billiton is taken into consideration, which is a leading organisation in the
Australian mining sector and it is involved in producing metallurgical coal, iron ore, uranium
and copper (BHP 2018). Thirdly, the paper would emphasise on ascertaining the extent to
which the disclosures on PPE meet the enhancing and fundamental qualitative characteristics
of financial information. Finally, the report would shed light on evaluating the alignment of
the PPE disclosures of the organisation with the general purpose financial reporting (GPFR)
objectives and accordingly, actions for improvement would be recommended.
1. Objective of general purpose financial reporting and qualitative characteristics of
useful financial information:
In accordance with “IASB OB1- OB21”, GPFR is the base of the conceptual
framework and it intends to provide financial information to the investors, users, lenders and
other creditors so that they could undertake effective investment decisions in an organisation,
which is BHP Billiton in this case (Aasb.gov.au 2018). The information obtained from GPFR
enables the investors in comprehending and undertaking straightforward methodology for
estimating the net cash flows and dividends in future. As a result, the investors could
understand the strengths and drawbacks of the organisation by using the liquidity ratio. For
instance, any changes in cash and property, plant and equipment (PPE) could have direct
impact on the liquidity ratio. With the help of this ratio, it is possible to analyse the existing
financial position of the organisation and its ability to generate money. In addition, it
provides non-financial information such as expectations of the management and economic
resources (Chand, Patel and White 2015).
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ACCG224 S3 2018 SID