Contemporary Accounting Issues: Adherence of Flight Centre Travel Company with AASB Conceptual Framework

Running head: CONTEMPORARY ACCOUNTING ISSUES
Contemporary Accounting Issues
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1CONTEMPORARY ACCOUNTING ISSUES
Table of Contents
Introduction..........................................................................................................................2
Attaining conceptual framework objectives........................................................................2
Attaining conceptual framework-based recognition criteria...............................................5
Equity...............................................................................................................................6
Assets...............................................................................................................................6
Liabilities.........................................................................................................................7
Expense............................................................................................................................8
Revenue...........................................................................................................................9
Addressing qualitative aspects of conceptual framework...................................................9
Faithful Representation....................................................................................................9
Relevance.......................................................................................................................10
Verifiability....................................................................................................................10
Comparability................................................................................................................10
Understandability...........................................................................................................11
Timeliness......................................................................................................................11
Conclusion.........................................................................................................................11
References..........................................................................................................................13

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Introduction
For developing the financial statements, the conceptual framework associated with the
financial reporting is vital for the companies in the recent years. This is due to the fact that it
offers significant course of action as well as the principles along with techniques required to
prepare all the financial reports (Biondi and Lapsley 2014). In addition to the fact that, the
conceptual framework might facilitate in dealing with several concerns of the corporate firms. In
order to improve the quality of the report Flight center travel company is chosen that is listed in
ASX top 100 companies. The objective of the report is to analyze the adherence of this company
in alignment with the conceptual framework.
Attaining conceptual framework objectives
The conceptual framework has an important function to play in dealing with the financial
factors of the companies. For addressing the needs of the financial reporting, such framework
was developed from the behalf of the “International Accounting Standards Board (IASB)” in the
year 1989 (Brown, Preiato and Tarca 2014). For this reason, the conceptual framework can
support in dealing with an organization’s financial aspects. Based on the company’s recent
annual report of 2017, the principles are presented within “Corporation Act 2001” and AASB are
ensured for general purpose financial reporting. Along with the same, the consolidated financial
statements are prepared relied on standards and principles of “International Financial Reporting
Standards (IFRS)” as well as “International Accounting Standards Board (IASB)”. For this
reason, the organization totally confirms with the regulations of financial reporting conceptual
framework of IFRS (Christensen, Lee Walker and Zeng 2015). For aligning with such
framework, it is also vital for the companies to address three specific objectives. These

3CONTEMPORARY ACCOUNTING ISSUES
objectives along with the degree to which the organization aligns with such objectives are
examined below:
 Reliable financial information- The annual report of the company indicates that it offers
timely information regarding financial statements to its investors to make effective
investment decisions (Crawford et al. 2014).
 Analysis of amount, timing and uncertainties- It is important to offer important
information to its investors in evaluating amount, uncertainties and timing that is aligned
with Flight center travel company’s cash flow.