Advanced Financial Accounting: Nature, Benefits, and Application of Conceptual Framework

HA3011 : - ADVANCED
FINANCIAL ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Discussing the nature and benefits of conceptual framework for financial reporting.............1
2. AASB Accounting Standards and their application.................................................................3
3. Theoretical construct of contemporary financial accounting...................................................3
4. Discussing and analysing Property, Plant and Equipment of the company.............................4
5. Australian accounting regulatory environment and conceptual framework............................6
6. How to account for assets and liabilities..................................................................................7
7. Calculation of journalised transactions of non-current assets..................................................7
8. Lessees and lessors accounting................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Advance financial accounting is known as the design which helps the organization by
providing the skills which are applicable internationally in their practices. It contains financial
reporting and business skills which is then applied by the business in their professional
environment. Advance financial accounting is important for the members of accounting
professions as they are responsible for providing financial reports. In this project Sigma
healthcare is used as the organization for understanding its financial reports with the help of
advance financial accounting. The organization is the leading whole-seller and distributor to
pharmacy business products. In this project different type of theoretical models of accounting are
understood. This project shows the application of financial reporting on specific issues of AASB
accounting standards. This project also discusses the theoretical construction of contemporary
financial accounting. In this project the need of development for conceptual accounting and the
discussion of it frame work is done. It helps in understanding Australian accounting regulatory
environment. With the help of this project the ability for calculation of journalized transaction is
done.
MAIN BODY
1. Discussing the nature and benefits of conceptual framework for financial reporting
Conceptual Framework (CF) is a particular body which is interconnected with objectives
and fundamentals followed by organization. The purpose behind this is to incline credibility of
financial reporting. It establishes the standards that encourages firms to cope up with structural
of financial accounting. From the analysis of Sigma Healthcare (SH) it can be analyzed that firm
positively implement it operational practices to cooperate with conceptual framework. It gives
focus on presenting is accounting and financial information in most systematic pattern in order to
compliance with this particular framework. Sigma Healthcare directors not only understand this
concept but apply these policies for attaining development
From the evaluating of accounting report of 2020-2021 it can be evaluated that particular
organization comply with appropriate accounting standards to provide clear and fair view of
financial condition & performance of company. Sigma Healthcare concentrate on financial
factors through getting guidance from experts so that appropriate risk and operational
management according to standard can be maintained (Flower and Ebbers, 2018).
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In the present scenario the specified organization has given focus on adopting all the new
accounting standards as per the conceptual framework for adhering fair practices. It largely
focuses on Australian Accounting Standard Board (AASB). For Instance- In the company’s
financial statements, insurance contracts, etc. Sigma HealthCare gives importance to AASB for
formulating its financial statement so that users can get the understanding for taking economic
and monetary decisions. By giving emphasis on company’s financials statements it can be
interpreted that specified enterprise its concentrates on qualitative features such as reliability,
relevancy, comparability, timeliness, etc. From this it can be identified that firm has shown its
net profitability, ROI, COGS, current liability & assets, equity, retained earnings so that
stakeholders can take accurate decisions.
Conceptual framework execution provides various type of benefits to organization which
enable it to derive positive goodwill in the industry. Following FASB’s CF helps SH to get
positive outcome that provides opportunity to measure, resolve, etc accounting disputes in
standard manner. For example- Sigma Healthcare has not made any changes in accounting
policies for measuring and disclosure of its financial statements so that company can cope with
accounting principle and validate its actions for proofing concept of going concern. It has as well
provided the financial information in understanding manner for making judgments of
performance of organization. This comprises sales & revenue. Segment information, expenses,
taxation, subsequent event, dividends, earning per share, etc. It aids firm to get credibility,
trustworthiness among stakeholders, etc.
Financial reporting is exerted by company in ethical manner so that it can meet the
elements like objectivity, fundamental principles, qualitative features, etc Sigma Healthcare
ensures that its cooperate with ASX while maintaining the balance with conceptual framework.
It records and publish all of its financial data according to IFRS, IASB and AASB. In addition to
this, it can eb identified from the all regulatory requirements relevant to its reporting process is
appropriately implemented (Coetsee, 2021). For essence- deferred tax is presented in balance
sheet by making difference between carrying value of assets and liabilities in order to accomplish
the reporting and taxation purpose. This provides consistency and useful standards so that on
going concern can perform effectively so that it's objectives can be accomplished. It provides
ease to compare different companies financial statements so that investors can rely on these
information for making appropriate decisions. Reporting according to prevailing standards as
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