Contemporary Issues in Accounting

This report discusses the contemporary issues in accounting, focusing on the Australian Agricultural Company Limited. It explores the conceptual framework, measurement, and elements of financial statements, as well as the use of financial reports for users. Recommendations for using a conceptual framework are also provided.

Running head: REPORT 0
CONTEMPORARY ISSUES IN ACCOUNTING
APRIL 15, 2019
student details:

REPORT 1
Executive Summary
The conceptual framework is the main part of financial reporting. The conceptual framework
creates the base as per which the accounting standards may be made like liabilities, incomes
and expenditures and can be recognised. In the following parts, the contemporary issues
related to The Australian Agricultural Company Limited is discussed and critically examined.

REPORT 2
Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Background of company............................................................................................................3
Conceptual framework- measurement and elements of financial statement..............................4
Fundamental qualitative characteristics and enhancing qualitative characteristics...................5
Use of financial reports for the users.........................................................................................6
General purpose financial statements.........................................................................................7
Conclusion and recommendations.............................................................................................7
References..................................................................................................................................9

REPORT 3
Introduction
The accounting and finance are constantly developing, significantly influenced by outside
components in the market place at an international level. The contemporary issues render the
practical overview of recent issues facing by the financial and accounting profession. This
report directs the Australian Agricultural Company Limited to deal with the application of
Contemporary issues of accounting. The following parts investigate and analyse the features
of the conceptual foundation of financial accounting, a relationship between practices and
financial accounting theories; contemporary issues involving international organisation of
IFRS, and various measurement issues related to the industry.
Background of the company
The Australian Agricultural Company Limited is a manufacturer of beef and cattle in
Australia. The main services of Australian Agricultural Company Limited are owning,
operating and developing the pastoral properties. This company produces beef. It also
includes breeding, backgrounding, and processing of cattle, and selling of branded beef. This
corporation has a speciality in manufacturing the grass-fed beef and grain fed beef. This
company runs the incorporated system of manufacturing of cattle across about twenty owned
platforms of cattle, above 2 leased platforms, about ten existed possessions, above 2 owned
feedlots, the amenity of manufacturing the beef and over 2 owned and an exterior farm placed
through NSW, Queensland, Western Australia and Northern Territory. The Australian
Agricultural Company Limited operates herd of Wagyu cattle, manufacturing the Wagyu beef
that is traded to over twenty nations all over the world. The facilities of processing of
Northern Beef are placed at Livingstone Valley (Kelley and Knowles, 2016).

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Conceptual framework- measurement and elements of financial statement
The main reason to establish the conceptual framework is that this renders the framework to
set the accounting standards, the grounds to solve the dispute related to accounting, and the
fundamental principles, which do not have to be happening in the accounting standards. The
framework for the preparation of the financial statements as changed involves the conceptual
framework for financial reporting as issued by IASB. The measurement requirements of the
conceptual framework involve the general purpose financial reporting, objectives of financial
reporting, accounting information’s fundamental qualitative characteristics, the financial
statement’s measurements, and the financial statement’s basic components (Ridker, et. al,
2017)
Considering the annual report of the Australian Agricultural Company Limited, it is observed
that the financial report has been made and presented according to the provisions of the
Corporation Act 2001, the authoritative announcements of Australian Accounting Standard
Board, and Accounting standards of Australia. The financial statements of the company have
complied with Australian International Financial Reporting Standard issued by the
International Accounting Standard Board and Australian Accounting Standards.
Furthermore, financial statements of the company comply with the Corporations Regulations
2001 and the accounting standards. According to the resolution of director of Australian
Agricultural Company Limited, this can be observed that the financial statements are made
according to the Corporation Act 2001. The company’s financial statements provide the fair
and true view of financial condition and performance of the corporation (Bridget, et. al,
2015). The annual report of the company states criteria of income and expenses to be
included in the financial statements-

REPORT 5
Fundamental qualitative characteristics and enhancing qualitative characteristics
The enhancing qualitative characteristics are described as the understandability, timeliness,
comparability and verifiability. These enhancing qualitative characteristics mentioned below-
1. Understandability- The Understandability needs the financial data to be clear or
understandable to the user, who has proper understanding and knowledge related
to the economic activities and the business. For a better understanding, it is
required that the data must be explained evidently and quickly. However, it is
inappropriate to prohibit difficult things only for creating reports easy and logical
(Geisker and Tallis, 2018).

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2. Comparability- As per this enhancing qualitative characteristic, the comparable
data makes able the comparison between the corporation and across corporations.
While comparisons are conducted in the company, data are compared from one
accounting period to another accounting period. For instance, income is compared
for the year 2017, 2018, and 2019. The comparison of data across the companies
makes able the evaluation of similarity and difference between various entities.
3. Verifiability- The outcomes related to the accounting of company
are verifiable when they are capable to be reproduced, so that, given the same data
and expectation, the independent accountant can generate the same outcome the
company did. The verifiability is very useful in helping that the information truly
states the financial phenomenon this claims to the state. In other words, the
different specialists and observers can reach consents that the particular
representation is a faithful representation.
4. Timeliness- The timeliness of accounting information states that the requirements
of information to utilise quickly proper for them to take necessary actions. The
information becomes obsolete and unreasonable in a matter in which this is not
reported in the prescribed period. Usually, the Act states the period for the
purpose of financial report’s preparation and the financial report’s presentation
(Jovanovski, Hočevar and Ogorevc, 2017). In this way, the company has also
followed these enhancing qualitative characteristics.
Besides this, fundamental qualitative characteristics of financial reporting data are typed as
the faithful representation and relevance (Epstein, et. al, 2016). According to the fundamental
qualitative characteristics of financial reporting data, the data must be relevant to the needs of
users this is the matter when the information influences the financial decision of the user.
This may involve reporting particularly related information whose misstatements or the errors

REPORT 7
may influence the financial decision of users. Furthermore, faithful representation means a
concept that financial statements are made that accurately present the financial position of the
company.
It is stated by an annual report of Australian Agricultural Company Limited that financial
statements of the company render relevant and faithful presentation. The entity faithfully
states the transactions and different incidents, shows the underlying causes of the
occurrences, and cautiously states approximation and uncertainties through the relevant
disclosures. It is analysed from the annual report of a company is that it states the financial
data in the proper way that the person with great knowledge and understanding of business,
and willingness to review information, should be able to comprehend it. (Mannucci and
Iacobelli, 2017). The annual report states that how company faithfully represents the assets-

REPORT 8
Use of financial reports for the users
The financial report helps the different users of financial statement. These users include the
investors, potential investors, lenders and creditors. They can use financial statements for
making the proper decisions (Sampaio and González, 2017). The annual report of the
Australian Agricultural Company Limited states that depositors and shareholders require the
financial data to make financial decisions and other decisions. Furthermore, the lenders of
banks or financial institutions are interested to know the capability of an entity to make the
payment of liabilities on time. In addition, creditors require financial data to know the
capacity to make payment of an obligation by the corporation while they become due. It is
stated by the annual report that the financial report does not give only basic knowledge of
accounting but also the knowledge of advanced concept and accounting characteristics. The
users of the company would be capable to know the International Accounting Standards and
IFRS from financial statements. Thus, they may deal with transactions as per the Accounting
Standards of Australia (AACo 2018 Annual Report, 2018).
General purpose financial statements
The financial statements are general purpose financial statements, made by the for-profit
corporation, as according to provisions of the Corporations Act 2001, Australian Accounting
Standards of Australia and reliable pronouncement of ASAB.
1. The terminology used in the company's financial statements- In financial statements,
reference to we, us, AACo, corporation and consolidated, all are for the Australian
Agricultural Company Limited.
2. Historical cost principle- The financial statements have made on the basis of historical
cost excluding the building and land and derivative financial instrument that evaluated
at fair value.

REPORT 9
3. Essential accounting estimates- for preparing financial statements, various essential
accounting estimates are required. This also needs the management to exercise the
judgement in the procedure of implementing the accounting policies of corporations.
4. Compliance with International Financial Reporting Standards- The financial
statements of Australian Agricultural Company Limited comply with IFRS issued by
IASB.
Conclusion and recommendations
As per the above analysis, it can be said that in absence of conceptual framework, ‘rules-
based’ accounting system can be produced having a purpose that the treatment of all
accounting transactions must be dealt with by complete particular regulations, or the

REPORT 10
requirements. The rules-based accounting system is very constricted and rigid; however, has
the attraction of financial statements being equal and consistent. In this way, it is
recommended to use a conceptual framework for providing fundamental principles to
improve the setting of standards for accounting and finance (Karimi, et. al, 2017).

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References
AACo 2018 Annual Report (2018) Australian Agriculture Company Limited. [Online]
Available at: https://aaco.com.au/investors-media/annual-reports [Accessed 15/4/2019]
Bridgett, D.J., Burt, N.M., Edwards, E.S. and Deater-Deckard, K. (2015) Intergenerational
transmission of self-regulation: A multidisciplinary review and integrative conceptual
framework. Psychological bulletin, 141(3), p.602.
Epstein, J.I., Zelefsky, M.J., Sjoberg, D.D., Nelson, J.B., Egevad, L., Magi-Galluzzi, C.,
Vickers, A.J., Parwani, A.V., Reuter, V.E., Fine, S.W. and Eastham, J.A. (2016) A
contemporary prostate cancer grading system: a validated alternative to the Gleason
score. European urology, 69(3), pp.428-435.
Geisker, J. and Tallis, J. (2018) Litigation funding in Australia: A year of review and
change?. LSJ: Law Society of NSW Journal, (46), p.81.
Jovanovski, V., Hočevar, S.B. and Ogorevc, B. (2017) Bismuth electrodes in contemporary
electroanalysis. Current Opinion in Electrochemistry, 3(1), pp.114-122.
Karimi, M., Amirmoezi, F., Haghpanah, S., Ostad, S., Lotfi, M., Sefidbakht, S. and Rezaian,
S. (2017) Correlation of serum ferritin levels with hepatic MRI T2 and liver iron
concentration in nontransfusion beta-thalassemia intermediate patients: A contemporary
issue. Pediatric hematology and oncology, 34(5), pp.292-297.
Kelley, T.R. and Knowles, J.G. (2016) A conceptual framework for integrated STEM
education. International Journal of STEM Education, 3(1), p.11.
Mannucci, P.M. and Iacobelli, M. (2017) Progress in the contemporary management of
hemophilia: The new issue of patient aging. European journal of internal medicine, 43,
pp.16-21.

REPORT 12
Ridker, P.M., Lonn, E., Paynter, N.P., Glynn, R. and Yusuf, S. (2017) Primary prevention
with statin therapy in the elderly: new meta-analyses from the contemporary JUPITER and
HOPE-3 randomized trials. Circulation, 135(20), pp.1979-1981.

REPORT 13
Sampaio, P.G.V. and González, M.O.A. (2017) Photovoltaic solar energy: Conceptual
framework. Renewable and Sustainable Energy Reviews, 74, pp.590-601.