AASB Standards Application in Financial Reports

This assignment examines the application of Australian Accounting Standards Board (AASB) standards in the financial reports of two companies: BWX Ltd and Blackmore Ltd. Students are required to assess the transparency and accuracy of the companies' financial reporting practices, focusing on the disclosure of relevant standards and their impact on the reliability of financial information presented. The analysis should consider both quantitative and qualitative aspects of financial reporting, comparing and contrasting the approaches taken by BWX and Blackmore Ltd.

Accounting 1
Contemporary Issues in Accounting

Accounting 2
Executive Summary
The basic purpose lies behind the designing of this report is to compare the annual reports of two
different companies of Australia and their compliance with the standards prescribed by the
Australian Accounting Standards Board. These two companies are Blackmore Limited and BWX
limited. This report shows the compliance of standards that are laid by the AASB by both the
companies in the preparation of their respective financial accounts in their annual reports. The
findings of the report reveal that IFRS and IASB standards are met out in the preparation of
financial reports by the company. The findings also reveal that the company BWX Limited has
more fairly complied with the accounting standards than the Blackmore Company. Protecting
and promoting the interest of different stakeholders is the main motive behind the application of
these standards.
BWX Company has clearly disclosed about the compilation with AASB standards in its annual
reports. Apart from this, the company has used the revised version of accounting standards in
order to improve the quality of its annual reports. Blackmore Company has also compiled with
the standards laid by AASB but the company fails in disclosing it in its annual reports.

Accounting 3
Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Evaluated the conceptual framework with reference to the both companies annual report............5
Annual report of both companies Blackmore and BWX.................................................................6
Role of revise conceptual framework in addressing the disparity in corporate reporting:........12
Analyzing the financial position perspective and financial performance of the recognition or
measurement decision for Blackmore Ltd and BWX Ltd.........................................................13
Clarification in the Directors Report and in the Notes to Financial Statements............................14
Compare and contrast of the two annual reports, identify the differences in disclosures of these14
Recommendations:........................................................................................................................16
Conclusion:....................................................................................................................................17
References:....................................................................................................................................18

Accounting 4
Introduction
The main purpose lies with the preparation of this report is to create the knowledge about the
various standards that are used in the preparation of final accounts by the company. Every
company is required to comply with the standards and regulations of the country in which the
company is registered in stock exchange during the preparation of final accounts. Two different
Australian companies BWX Limited and Blackmore Limited are chosen for this purpose.
Compilation with the accounting standards in the preparation of final accounts by the companies
are evaluated in this report. The annual reports of both the companies are compared to find out
deviations and reasons that can be held responsible for the deviations are evaluated.

Accounting 5
Evaluated the conceptual framework with reference to the both companies annual report
The basic aim of the accounting standards is to regulate the practices relating to the accounting
and financial reports of the firms. IASB standards and requirements laid by IFRS are compiled
by both the organizations in preparing their final reports (Burton and Jermakowicz, 2015).
Various standards are developed by the ASSB which are required to be complies by the
companies in preparing final accounts. Conceptualized framework is provided at the initial stage
by IFRS that is required to assist in preparation of financial accounts and considering the various
aspects of the financial statements.
The determination of assets must be proper and the annual reports must contains the economic
profits that can be earned through the selling of assets should be done on the basis of IFRS.
Along with it, determining of assets over the business should be in accordance with the IFRS
standards. Assets of a company are required to be considered in final reports according to the
ASSB. Current assets and noncurrent assets are two categories of assets. Noncurrent assets refer
to those assets which have life expectancy of more than 1 year in business (Ltd, 2015). Examples
of noncurrent assets are machinery, plants. Examples of current assets are cash and cash
equivalents.
Financial reports of a company comprise of all the assets on the basis of AASB requirements and
IFRS principles. Balance sheet of both the companies shows the records of assets and liabilities
records. Assembling of IFRS and AASB has been done by the organizations in order to
determine the liabilities. Both the companies have compiled with the AASB requirements in
order to prepare final accounts (Kellaghan and Stufflebeam, 2012). The accounting standards
prescribed by the AASB and IASB have been followed by the organizations in order to prepare
final accounts.

Accounting 6
Annual report of both companies Blackmore and BWX
AASB standards are important and they form the primary basis for accounting principles in case
of financial reports. Accounting standards refer to the procedure of operating, acknowledging,
presenting, disclosing and measuring financial statement (Henderson et al., 2015). Serving
financial information to different stakeholders is the main motive of accounting standards.
Australian Accounting Standard Board is also referred as Australian Government agency, which
aims at sustaining and improving the standards of financial reports for individuals, and both
sectors. Setting the principles in order to govern the market of Australian securities is the basic
aim of ASSB. In order to develop and analyze the accounting standards, ASSB has developed
conceptual framework.
Analysis of reports of both companies reveals that both companies have compiled with the
AASB standards (Deegan, 2014). Screenshot of balance sheet and income has been provided in
order to present them as evidence.
Annual report of BWX Limited and Blackmore Limited
Income Statements of Blackmore Limited:
The income statement for the period of 2015-16 of BWX Limited is shown in the form of images
below:

Accounting 7

Accounting 8
Balance sheet of Blackmore Limited:
The balance sheet for the period of 2015-16 of BWX Limited is shown in the form of images
below:

Accounting 9

Accounting 10
(Source: Blackmore Ltd, 2016)
Income Statements of BWX Limited:
The income statement for the period of 2015-16 of Blackmore Limited is shown in the form of
images below:

Accounting 11
Balance sheet of BWX Limited:
The balance sheet for the period of 2015-16 of Blackmore Limited is shown in the form of
images below:

Accounting 12
(Source: BWX Ltd, 2016)
Role of revised conceptual framework in addressing the disparity in corporate reporting:
According to chapter 1 and 3 of “IASB Conceptual Framework for Financial Reporting”
published in the month of September 2010, AASB has revised its framework in order to improve
the preparation and presentation of final accounts (Birt, et al., 2012). The conceptual framework

Accounting 13
of chapter 1 and 3 of IASB are required to modify instead of altering the whole structure. IASB
has generated the Exposure Draft in order to improve the conceptual framework, which has the
basic aim of providing the financial reports with more clarifications, completeness (Cameron and
Quinn, 2011).
Exposure Drafts are of many types, the detail of which is as below:
There are several parts in addition to larger elements that exist in the conceptual framework,
which deals with measuring, presenting and reporting of the final accounts of the company
(Kieso, et al., 2011). Below are the some examples provided in order to present the revised
conceptual framework:
a) It presents the financial reports in more detailed form than the existing structure in various
aspects like measuring, presenting and clarifying.
b) It asks clarification on several topics that constructs the existing conceptual framework.
c) It requires updating the existing outdated structure of conceptual framework.
Analyzing the financial position perspective and financial performance of the recognition
or measurement decision for Blackmore Ltd and BWX Ltd.
On the basis of analyzing Exposure Draft, it can be said that the basic aim of ASSB is to ensure
the appropriate compilation of the standards in preparation of financial reports by the various
organizations. IPSASB Conceptual structure is framed for General Purpose Financial Reporting
by the Public Sector Entities (IPSASB Conceptual structure) issued in October 2014 was
assumed to be observed by the AASB (Follett, 2012). It ensures the application of AASB
standards in the presentation and preparation of final accounts, which is the basic objective of
IASB Exposure Draft.

Accounting 14
AASB code 1054.7 states that any firm is not required publishing its financial reports until the
firm has not fully complied with all the requirements prescribed by the ASSB. Apart from this,
the ASSB code 1054.8 states that any firm or an organization which is making its final accounts
meeting the requirements of a country’s norms, have rights to address the comments on legal
foundation and framework of that board (Monetary and Department, 2014).
Clarification in the Directors Report and in the Notes to Financial Statements:
The interpretation of financial notes that are provided in the annual reports of the company
reveals that principles laid by ASSB are fully met by both the companies in preparation of final
accounts. The simplifying and improving the procedure of classification and disclosing the final
statements are required for the purpose of mentioning assets and liabilities in balance sheet is the
basic aim of these standards. Providing optimum information to the stakeholders of business is
the main focus of these standards. Principle of entity is used to provide information on various
aspects relating to the leasing of the company (Careaga, 2010). But, these standards do not have
that much impact on the preparation of final accounts. AASB states that there are few standards
that are required to meet at the time of preparing final accounts by the company. Ignoring the
different aspects AASB standards can invite the costs of regulatory fines over companies.
Different attributes of management are involved in the drafting of final reports.
Compare and contrast of the two annual reports, identify the differences in disclosures of
these:
The comparison of the final reports of both the company reveals that BWX Company has more
fairly complied with the standards than Blackmore Limited. BWX Company has more
transparency in its final accounts than the Blackmore Limited, according to the information
stated. Major differences can be observed in the methods used for the presenting the final

Accounting 15
accounts and the financial notes provided by both the companies (Gullifer and Payne, 2011). The
annual report of BWX Company clearly mentioned the different standards that are complied in
the preparation of final reports. Apart from this, the annual report of Blackmore Limited does not
reveal any standard that are followed by the company. The BWX Company has more fairly
complied with the standards prescribed by the AASB than the Blackmore Limited. But, both the
companies have met with the requirements of AASB in preparing final accounts. The financial
reports of both the companies are prepared keeping in view of the standards laid down by AASB.

Accounting 16
Recommendations:
It can be advised to the companies that they should properly mention the detail about the
standards they have used in preparing their accounts in their annual reports. It will help them in
gaining the faith of stakeholders. Both the companies have complied with the AASB standards in
this report. It can be said on the basis of this report that BWX Company has more transparency
in respect of AASB standards in its financial reports than the Blackmore Limited. Improper
compilation of standards by the Blackmore Limited leaves negative impact on its stakeholders.

Accounting 17
Conclusion:
From the analysis of the annual reports of BWX Company and Blackmore Limited, it can be said
the standards prescribed by AASB have been properly followed by both the companies. In order
to prepare their final accounts and showing them in their annual reports, both the companies have
used AASB standards. The basic objective lying behind the AASB standards compliance is to
ensure the legitimacy and quality of final reports. Therefore, companies are required to strictly
follow the standards prescribed by the AASB in preparation of their final accounts in order to
protect and promote the interests of different stakeholders of company.
The another basic role of Australian Accounting Standards Board (AASB) in addition to above
stated objective is to ensure the governing of securities exchange market of Australia. The AASB
works for improving and amending the conceptual framework in order to improve the reliability
of final reports. BWX Company has more transparency in its annual reports in respect of
disclosure of the standards. The company has clearly mentioned the different standards that it has
used for preparing final accounts in the financial section of the company. On the other hand,
Blackmore Limited has failed in presenting these standards in its financial reports. Overall, it can
be said that proper application of standards prescribed by the AASB has been done by the BWX
Company and Blackmore Limited in preparing their final accounts and presenting them in their
respective financial reports.

Accounting 18
References:
Birt, J., Chalmers, K., Byrne, S., Brooks, A., and Oliver, J., 2012. Accounting, Google eBook:
Business Reporting for Decision Making. US: John Wiley & Sons.
Blackmore Ltd, 2016. Blackmore Ltd Annual Financial Report. Available through:
<https://www.blackmores.com.au/about-us/investor-centre/asx-announcements> [Accessed 14
August 2017].
Burton, G., and Jermakowicz, E., 2015. International Financial Reporting Standards: A
Framework-Based Perspective. UK: Routledge.
BWX Ltd, 2016. BWX Ltd Annual Financial Report. Available through:
<http://www.bwxltd.com/wp-content/uploads/2016/09/BWX0006_BWX_AR_FA-2016.pdf>
[Accessed 14 August 2017].
Cameron, K., and Quinn, R., 2011. Diagnosing and Changing Organizational Culture: Based on
the Competing Values Framework BusinessPro collection. UK: John Wiley & Sons.
Careaga, R., 2010. Revised Reg AB Proposing Release Volume 75, Issue 84, Part 2 of Federal
register. USA: Lulu.com.
Deegan, C., 2014. Financial Accounting Theory. USA: McGraw-Hill Education Australia.
Follett, R., 2012. How to Keep Score in Business: Accounting and Financial Analysis for the
Non-accountant. US: FT Press.
Gullifer, L., and Payne, J., 2011. Corporate Finance Law: Principles and Policy. London:
Bloomsbury Publishing.
Henderson, S., Peirson, G., Herbohn, K., and Howieson, B., 2015. Issues in Financial
Accounting. UK: Pearson Higher Education AU.

Accounting 19
Kellaghan, T., and Stufflebeam, D., 2012. International Handbook of Educational Evaluation:
Part One: Perspectives / Part Two: Practice Volume 9 of Springer International Handbooks of
Education. Berlin: Springer Science & Business Media.
Kieso, D., Weygandt, J., and Warfield, T., 2011. Intermediate Accounting, Volume 1Intermediate
Accounting. UK: John Wiley & Sons.
Ltd, P., 2015. Wiley IFRS 2015: Interpretation and Application of International Financial
Reporting Standards Wiley Regulatory Reporting. UK: John Wiley & Sons.
Monetary, I., and Department, C., 2014. Canada: Financial Sector Assessment Program-
Insurance Core Principles-Detailed Assessment of Observance Issues 14-72 of IMF Staff
Country Reports. US: International Monetary Fund.