A1 Investment and Resources Ltd

The report is primarily based on the Australian company that is A1 Investment and Resources Ltd, and a strong critical analysis is undertaken for the company. Such an analysis helps to know about the effectiveness of the company in tune to the conceptual framework. The main stress of the report is on the basic elements of the conceptual framework where a strong understanding is gathered in respect of the company A1 Investment and Resources Ltd.

qwertyuiopasdfghjklzxcvbnmqwerty
uiopasdfghjklzxcvbnmqwertyuiopasd
fghjklzxcvbnmqwertyuiopasdfghjklzx
cvbnmqwertyuiopasdfghjklzxcvbnmq
wertyuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdfghjklzxc
vbnmqwertyuiopasdfghjklzxcvbnmq
wertyuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdfghjklzxc
vbnmqwertyuiopasdfghjklzxcvbnmq
wertyuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmrtyuiopasdfghjklzxcvbn
mqwertyuiopasdfghjklzxcvbnmqwert
yuiopasdfghjklzxcvbnmqwertyuiopas
dfghjklzxcvbnmqwertyuiopasdfghjklz
CONTEMPORARY ISSUES IN
ACCOUNTING

A1 Investment and Resources Ltd
Abstract
The report is primarily based on the Australian company that is A1 Investment and Resources
Ltd, and a strong critical analysis is undertaken for the company. Such an analysis helps to
know about the effectiveness of the company in tune to the conceptual framework. The main
stress of the report is on the basic elements of the conceptual framework where a strong
understanding is gathered in respect of the company A1 Investment and Resources Ltd. The
report starts with the introduction followed by the major areas of the conceptual framework
and other characteristics.
2

A1 Investment and Resources Ltd
Contents
Introduction...........................................................................................................................................3
Requirements of the conceptual framework.........................................................................................3
Fundamental qualitative characteristics................................................................................................5
Enhancing qualitative characteristics....................................................................................................6
The user of financial information..........................................................................................................7
The user needs a basic knowledge of accounting..................................................................................8
Conclusion.............................................................................................................................................8
References...........................................................................................................................................10
3

A1 Investment and Resources Ltd
Introduction
When it comes to the concept of the conceptual framework it needs to be noted that it plays a
predominant part in the presentation, as well as preparation of financial statement for the
users so that they can be assisted in undertaking useful decision. Decision making is enriched
through the concept of CF as it leads to a formidable foundation. Therefore, it is vital that it
provides them with the knowledge to understand the pitfall of financial reporting. Moreover,
to make amend with the need of the conceptual framework, the IASB has provided various
characteristics of qualitative nature such as materiality, reliability, etc. that needs to be
fulfilled by every company. Moreover, the framework even presents a criterion of
recognition that needs to be met so that the reporting of assets, liabilities, expenses can be
projected in a well-defined manner. For the main aim of the report, the annual report of A1
Investment & Resources Ltd has been selected, and the report will consider whether the
company met with the specifications of the CF.
Requirements of the conceptual framework
As per the report of the A1 Investment and Resources Ltd, it can be commented that the
annual report is in tune to the rules and regulations defined by the IFRS. Moreover, it is even
noted that the financial statements adhere to the Article 4 of the IAS Regulation and the
Companies Act 2006 that helps the IASB in the establishment of consistent and strong
accounting. Furthermore, it can be commented that depending on the AASB, the financial
statements of the company projects a real view of the performance that indicates the company
adhered to the conceptual framework objectives (Conceptual Framework, 2016). It even
needs to be noted that directors report is properly linked to the financial statement disclosure
and that plays a vital role in understanding the aim and limitation of the financial reporting.
Therefore, it can be commented that annual report of A1 Investment & Resources Ltd is as
per the obligation of the company and the presentation, as well as preparation, is entire as per
the Corporation Act 2001 of Australia (A1 Investment and Resources, 2016). This is a clear
indication that the company has met with the requirements and that denotes the strong
management of the company.
4

A1 Investment and Resources Ltd
(A1 Investment and Resources, 2016)
5

A1 Investment and Resources Ltd
Fundamental qualitative characteristics
As per relevance, it can be commented that the company has provided a deep-rooted financial
indication to the users in terms of the company’s performance. For instance, the company has
provided information in tune to the earnings that are underlying in the current year and the
same has been compared with the previous year so that the changes can be done in such a
segment (Seilber, 2015). Hence, with such a comparison, the users can judge whether the
company is able to perform in an effective manner. Another important point that should be
considered is that the company has considered both financial and non-financial features of the
conceptual framework so that it can satisfy the quality of relevance when it comes to
6

A1 Investment and Resources Ltd
reporting (Conceptual Framework, 2016). This can be claimed by the fact that the auditor of
the Group has asserted that the financial statements boast of the financial, as well as non-
financial details so that the ineffectiveness of material nature present with the audited report
of the financial statements can be traced with ease (Tysiac, 2015).
In tune to the faithful representation, it can be commented that the company adhere to the
requirements and the same is presented by a declaration in written form. This done from the
directors that states the annual report projects a real scenario of the financial performance
(Melville, 2013). Furthermore, to ensure a better surety, the Group has even complied to the
section 295A of the Corporation Act 2001. The directors further ascertain that the annual
report is prepared in accordance with the accounting standard that is supported by judgements
and estimates of generous nature (Horngren, 2013). Hence, the company has effectively met
the faithful representation and concept of relevance in the annual report.
(A1 Investment and Resources, 2016)
Enhancing qualitative characteristics
It can be commented from the annual report of the company that it has provided material
information of the data performance for the past five years. For example, in the annual report,
the performance in terms of economic contribution has been clearly laid down that leads to
better understanding and comparison (Petty et. al, 2012). Such aspects even contain different
sub heading s that projects a strong focus on the various segments of the company. therefore,
7

A1 Investment and Resources Ltd
the information can be compared easily from one year to another so that it can be clearly
ascertained whether the company is performing to the best of its abilities. Hence, it is proved
that the company has met with the comparability feature of the CF in its annual report.
Thereafter, the company has an adequate procedure of verification in movements that help in
detection of the material error if the data of the previous year is not correctly provided so that
the comparability feature is not disturbed (Parrino et. al, 2012). Furthermore, if the
information can be compared easily, then it can be verified whether the segments of the
company is performing in an effective manner.
When it comes to the timely information, then it can be commented that the director of A1
investment & Resources Ltd attain the information in a timely manner so that the fulfillment
of duties can be done in an effective manner. This projects that the directors are able to grab
the information in a timely manner so that the responsibilities are smoothly performed. This
even helps them in reporting the information to the financial statement users hence
completing the process of strong decision making (Deegan, 2011). Furthermore, the
company understands the concept of timely information that is in tune with the stakeholders
that ensures all the disclosures has been done in tune to understandability. It can be visualized
through the company’s performance indicators that the reporting has been done in a simple
manner that helps in taking effective decision making. Hence, the information projects the
concept of understandability (Gowthrope, 2011). Overall, the enhancing qualitative
characteristics of the conceptual framework have effectively complied.
The user of financial information
Yes, the users of the financial report are able to use the report in taking a valid decision. The
three financial reports that are used by the financial users are the balance sheet, the income
statement and the Cash Flow statement. The financial report is accurate and is in tune with
the accounting standards thereby helping in taking valid decisions.
The Balance Sheet
The balance sheet projects the financial balances that are the assets, liabilities and the
company’s equity. The strength of the company and the working capital days can be easily
ascertained with the help of it. This means that financial users can easily ascertain the
manner in which the company can handle alterations in revenue while staying in business
(Hamilton, Hyland & Dodd, 2011). Balance sheet even helps in identification of the trend
8

A1 Investment and Resources Ltd
that is prevalent such as the receivable cycle and how the net profit is being utilized and how
often the equipment is replaced.
The Income Statement
The income statement projects the revenue, as well as expenses of the company during a
specified period of time. The main aim of an income statement is to help the users of the
financial statements in knowing about the sales, expenses and the profit and loss.
The Cash Flow Statement
The Cash Flow Statement projects the inflow, as well as outflow of cash during a specified
time span. Such movement of money will help in the accountability of the operation,
investment and financial activities. The users of the income statement can help in getting
strong information of the company’s skills to generate cash so that a healthy business can be
maintained (Hamilton, Hyland & Dodd, 2011). The users can gather up to date reporting in
terms of reduction of costs, the increment in sales, enhance profitability, allocation of human
resources, etc. The financial statements are important because it provides ample information
in terms of decision making and the trend can be interpreted from the financial report.
Therefore, the financial users of the report use it as a guide in terms of the economic decision
making process, and it strives to aid in the concept of forecasting. From the financial
statements, a strong understanding in terms of business practices and market trends can be
gathered with ease and flexibility (Kieso et. al,, 2010).
The user needs a basic knowledge of accounting
The conceptual framework is correct in the regard because that user needs a basic knowledge
of accounting. The financial reports are available and provided in the annual report that can
be easily accessed by the users. The users need a simple knowledge of accounting that can be
used for the interpretation. There are various manner and mechanism that can be used in the
process of interpretation. A simple knowledge in this regard helps in knowing about the
status of the company. The Conceptual framework sets the concepts and notion that helps in
underlying as well as interpreting the financial statements (Gibson, 2010). Hence, going by
the overall discussion, it can be commented that simple knowledge in this regard can help in
ensuring a smooth activity. As the report of the two years are provided in the annual report,
and that can be used for differentiation and getting a knowledge of the actual performance of
the two years. The same can be used to differentiate in terms of percentage type.
9

A1 Investment and Resources Ltd
Conclusion
After the assessment of Investment and Resources Ltd, it can be commented that the
company has adhered to the conceptual framework in the annual report. For such an instance,
the company has effectively met with the criteria of recognition in the annual report.
Moreover, the objectives of the conceptual framework have been effectively meeting. For this
instance, the company has adhered to the fundamental and enhancing qualitative
characteristic of corporate reporting that helps the user in taking an effective decision.
10

A1 Investment and Resources Ltd
References
A1 Investment and Resources. (2016) A1 Investment and Resources 2016. Available from:
http://www.riotinto.com/documents/RT_2016_Annual_report.pdf [Accessed 21 December
2018]
Conceptual Framework. (2016) Conceptual Framework Pronouncements. Available from:
http://www.aasb.gov.au/Pronouncements/Conceptual-framework.aspx [Accessed 21
December 2018]
Deegan, C. M. (2011) In Financial accounting theory. North Ryde, N.S.W: McGraw-Hill
Everingham, G.K, Kleynhans, J.E & Posthumus, L.C. (2007) Principles of Generally
Accepted Accounting Practice. Juta and Company Ltd.
Gibson, C. (2010) Financial Reporting and Analysis: Using Financial Accounting
Information, Cengage Learning.
Gowthrope, C. (2011) Business accounting and finance for non specialists (3rd ed.). South
Western
Hamilton, K., Hyland, B. and Dodd, J. L. (2011) Impairment: IASB-FASB Comparison.
Drake Management Review. [online]. 1(1), p. 55–67. Available from:
https://pdfs.semanticscholar.org/8d8f/5fd070193d6fa52e79d1dee9cc6632159d8a.pdf
[Accessed 21 December 2018]
Horngren, C. (2013) Financial accounting, Frenchs Forest, N.S.W: Pearson Australia Group.
Kieso, D., Weygandt, J., Warfield, T; Young, N. and Wiecek, I . (2010) Intermediate
accounting. Toronto: John Wiley & Sons Canada.
Melville, A. (2013) International Financial Reporting – A Practical Guide, Pearson,
Education Limited, UK
Parrino, R., Kidwell, D. & Bates, T. (2012) Fundamentals of corporate finance, Hoboken,
NJ: Wiley
Petty, J. W, Titman, S., Keown, A. J., Martin, J. D., Burrow, M. and Nguyen, H. (2012)
Financial Management: Principles and Applications, 6th ed. Australia: Pearson Education
Australia.
11

A1 Investment and Resources Ltd
Seilber J. (2015) FASB removes concept of extraordinary, retains guidance on unusual item.
Available from: http://www.pwc.com/us/en/cfodirect/assets/pdf/in-brief/us2015-01-fasb-
extraordinary-unusual-items.pdf [Accessed 21 December 2018]
Tysiac K. (2015) No more extraordinary items: FASB simplifies GAAP. Available from:
http://www.journalofaccountancy.com/news/2015/jan/gaap-extraordinary-items-
201511630.html [Accessed 21 December 2018]
12