Contemporary Issues in Accounting

This report explores the contemporary issues in accounting and focuses on compliance with measurement requirements, fundamental and enhancing qualitative characteristics, and the use of financial statements for users.

Running head: REPORT 1
CONTEMPORARY ISSUES IN ACCOUNTING
Student details:
4/19/2019

REPORT 2
Executive summary
The major objective of the conceptual framework is to assist the Board to make International
Financial Reporting Standards on the basis of constant concepts, resulting in financial data,
which is helpful for the users including investors, potential investors, lenders and creditors. This
report discovers the contemporary issues in accounting in critically manner.

REPORT 3
Contents
Executive summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Company overview......................................................................................................................................4
Compliance with measurement requirements of conceptual framework......................................................4
Compliance with fundamental qualitative characteristics............................................................................5
Compliance with enhancing qualitative characteristics...............................................................................6
Use of financial statements for the users.....................................................................................................7
Deep analyses of financial statements for the users.....................................................................................7
Compliance with general purpose financial reporting.................................................................................7
Conclusion...................................................................................................................................................8
References...................................................................................................................................................8

REPORT 4
Introduction
The contemporary issues are related to the issues which are faced by the professional in
accounting. In the following parts, the contemporary issues in accounting in G8 Education
Limited is discussed and critically examined. This report focuses on existing and new issues,
which influence the contemporary practices related to accounting.
Company overview
In Australia, G8 Education Limited is a biggest ASX listed operator related to child care centre.
G8 Education Limited has very easy mission. The main target of this company is to become the
leading provider of high quality, developmental and learning child care service in Australia. G8
Education Limited looks for getting this throughout the 4 pillars for the development and
expansion. This company was established in year 2006 and taken together the dedicated experts
as team driven, to provide highest quality developmental and educational child care service
through Australia. It was in response to improving administrative regulations creating this harder
for single-centre operator to live.
Compliance with measurement requirements of conceptual framework
The IASB issued amended Conceptual Framework for Financial Reporting, the comprehensive
set of theories regarding the financial reporting (Gummer and Mandinach, 2015). The
conceptual framework defines-
1. the objective of financial reporting
2. fundamental qualitative characteristics in respect of relevant financial data
3. Enhancing qualitative characteristics in respect of relevant financial data

REPORT 5
4. explanation of reporting entity and the limit
5. meaning of an asset, expenses, equity, income and asset
6. methods to include assets and liabilities in financial statements
7. recognition and derecognition of assets and liabilities
8. basis for measurement and direction to use them
9. Concepts and direction on item’s disclosure and presentation.
Further, there are various measurement basis of conceptual framework such as historical cost
measurement basis, current value measurement basis, factors such as relevance and faithful
representation and the cost constraints. The company uses relevant accounting policies for
the criteria of assets, income, liabilities, equity and expenses. The annual report of G8
Education Limited states criteria of income and expenses to be included in the financial
statements-

REPORT 6
Compliance with fundamental qualitative characteristics
As per the fundamental qualitative characteristics, the information should be relevant and render
the faithful representation for making the proper decision. G8 Education Limited complies with
following fundamental qualitative characteristics-
1. Faithful representation- it is required that data or information should faithfully represent
the matter of what this implies to represent. The faithful representation should be free
from error. This can be influenced by level of uncertain measurements.
2. Relevance- the data is relevant in a case where this is able to create the differences to
decision taken by users (Gummer and Mandinach, 2015).

REPORT 7
As it can see from the annual report of company how the company faithfully represents the
assets:

REPORT 8
Compliance with enhancing qualitative characteristics
There are four enhancing qualitative characteristics such as verifiability, timeliness,
comparability and understandability. However, these enhancing qualitative characteristics may
not create non-useful data useful. G8 Education Limited complies with following enhancing
qualitative characteristics-
1. Verifiability- The verifiability is very helpful in stating the information faithfully for the
better results.
2. Timeliness- timeliness of accounting information means that the requirements of data to
use rapidly to take relevant actions.
3. Understandability- the information must be understood to take proper decisions.
4. Comparability- the data should be equivalent to financial information stated for various
accounting period to recognise the trend.
Use of financial statements for the users
The main purpose of the financial reporting is to give the financial information, which is helpful
to various users in taking proper decisions in relation to rendering resources to the company. The
financial reporting is very useful for the investors such as creditors, investors, potential investors
and lenders. These users use the financial statements in making decisions. The decisions of users

REPORT 9
include the decision in respect of rendering the loans and other credit, purchasing or holding or
selling instrument related to debt and equity, and in relation to vote, or else affecting the actions
or performances of management. For making these decisions, it is required by the users to
evaluate the prospect future net cash flow to a company and to assess the stewardship of
administration of financial resources of company (Annual Report, 2018).
Deep analyses of financial statements for the users
It is said by the conceptual framework that the users only require basic knowledge of accounting.
However, for the better evaluation, it is required by users to get the information related to the
financial resources of a company, modifications in resources, and claims in against corporation.
The users are also required to have the knowledge regarding that how properly the administration
had discharged the duties to utilize the financial resources of an organization (Krsekova and
Paksiova, 2015).
Compliance with general purpose financial reporting
The annual report of G8 Education Limited states that the conceptual framework for financial
reporting defines the concept and purpose for preparing the general purpose financial reporting.
The conceptual framework sets out the changes to standard, the associated document and the
statement of International financial reporting standards. The annual report of G8 Education
Limited states that it prepares cash flow statement, balance sheet, statement of owner’s equity,
income statement as per the Corporations Act 2001 (Lewandowski, 2016).

REPORT 10
Conclusion
As per the above analysis, it can be concluded that the amendments to a reference to the
conceptual framework in Standards, have the relevant and substantial effect on users and people
who prepare and represent the financial statements of the company. It is recommended to adopt
conceptual framework for financial reporting for better understanding of Australian Accounting
Standards and international financial reporting standards.

REPORT 11
References
Annual Report (2018) G8 Education Limited [Online] Available at:
<https://g8education.edu.au/wp-content/uploads/2019/02/Annual-Report-2018.pdf> [Accessed
19/04/2019]
Gummer, E. and Mandinach, E. (2015) Building a Conceptual Framework for Data
Literacy. Teachers College Record, 117(4), p.n4.
Kršeková, M. and Pakšiová, R. (2015) Financial reporting on information about the financial
position and financial performance in the financial statements of the public sector. Finance and
risk 2015, 14(1), pp.136-145.
Lewandowski, M. (2016) Designing the business models for circular economy—Towards the
conceptual framework. Sustainability, 8(1), p.43.
Panteli, M. and Mancarella, P. (2015) The grid: Stronger bigger smarter?: Presenting a
conceptual framework of power system resilience. IEEE Power Energy Mag, 13(3), pp.58-66.