Analysis of Financial Reporting of Lamborghini under Conceptual Accounting Framework

Contemporary Issues In Accounting
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Contents
Introduction......................................................................................................................................3
Analysis of the Company in Complying with the Objectives of General Purpose Financial
Reporting.........................................................................................................................................3
Use of General Purpose Financial Reports in Gathering Information as per the needs of Target
Audience..........................................................................................................................................5
Satisfaction of the Recognition Criteria in the Financial Statements..............................................7
Exhibition of Fundamental Qualitative Characteristics of Financial Reporting in the Company...8
Exhibition of Enhancing Qualitative Characteristics of Financial Reporting in the Company.......9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
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Introduction
The present report is developed to provide a critical analysis of the effectiveness of the
corporations in Australia listed on ASX to comply with the conceptual accounting framework.
Australian Accounting Standards Board (AASB) are emphasizing on implementing the
conceptual framework of accounting on the Australian business entities for improving the quality
of their financial reporting. The report has specifically analyzed the effectiveness an ASX listed
entity ‘Lamborghini’ to comply with accounting principles stated in the conceptual framework.
The report has examined the effectiveness of the company in complying with the objectives of
general purpose financial reports through examining its complying with the fundamental and
enhanced qualitative characteristics of conceptual framework of accounting.
Analysis of the Company in Complying with the Objectives of General
Purpose Financial Reporting
Lamborghini, is a recognized Italian company involved in manufacturing of luxury
supercars, sports cars and tractors. The company carries out its operations actively in Australia
and offers its exclusive collection of vehicles in wide markets of the country such as Perth,
Melbourne and Sydney. The company as such has to comply with all the relevant accounting
standards and regulations of Australia in order to effectively carry out its operation within the
country. The general purpose financial reporting objectives have laid to the development of the
conceptual framework of accounting. The financial reports are developed to provide quality
financial information about the performance of a reporting entity to the present and future end-
users. The information provided to the end-users such as investors, lenders and creditors should
be able to facilitate them to take investment decisions whether to purchase, sell or hold its equity
or debt instruments (Conceptual Framework, 2017). The annual report of the parent group of
Lamborghini, Volkswagen Group, is analyzed for examining whether the company has met the
purpose of objective of financial reporting.
The company for meeting with the objective of general purpose of financial report needs
to disclose the complete financial information through the preparation and development of
financial statements. The company, as such, in its notes to financial statements section has
disclosed all the information in relation to the development of its general purpose financial
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statements (Maines and Wahlen, 2006). The relevant accounting standards and principles applied
for measuring the value of different elements of financial statements have been specified in the
notes section. The financial report have provided all the relevant information in relation to the
financial position of the Group through depicting the values of assets, liabilities and equity
(Psaros and Trotman, 2004). The Group has prepared and presented its consolidated financial
statements that are, statement of equity, balance sheet, profit and loss statement, statement of
cash flow and income statement that have provided detained information about the past, present
and future financial growth prospects.
(Source: https://www.volkswagenag.com/presence/investorrelation/publications/annual-reports/
2018/volkswagen/en/Y_2017_e.pdf)
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