Accounting Theory and Contemporary Issues: Critical Analysis of Xero Ltd Annual Report

ACCOUNTING THEORY AND CONTEMPORARY ISSUES

Contents
Introduction-...............................................................................................................................2
Critical analysis of Annual Report of Xero Ltd.........................................................................2
Comparison with other corporations listed on the ASX............................................................3
Summary of the Results for the investment in the companies...................................................6
Conclusion..................................................................................................................................6

Introduction-
Accounting is the procedure adopted by public companies in order to recognise, record, and
evaluate the financial performance of the company. The accounting theory studies include the
analysis of historical bases of accounting policies, along with the manner wherein the
accounting practices are altered and included in the regulatory structure, which regulates
the financial reports and financial statement. The financial reports are made by companies by
following the several accounting guidelines. It creates the easy way for the company and the
shareholders of the company to have the knowledge of business. It also helps in taking good
decisions in respect of the corporation’s performance. In the addition of this, the Conceptual
Framework can also support the preparers of financial statement to establish the
accounting policies for transaction or occasions not covered by the current norms.
In this report, the annual report, the accounting theory concepts, guidelines to prepare the
accounting reports have been reviewed of Xero Ltd. The following parts also state the
performance of company with the help of the comparison with other corporations listed on
ASX and whether the investment is to be made in this company.
Critical analysis of Annual Report of Xero Ltd
The conceptual framework can be describes as the concepts or purposes, which leads to the
businesses to standards set to make the good report. The Conceptual framework provides the
proper guidelines to every company to prepare the reliable and comparable reports. It helps to
create better way for the shareholders of the organisation to have the knowledge of annual
report of a corporation and relate it with other opponent companies to attain the conclusion
(Garrett, Hoitash and Prawitt, 2014). In case of Xero Ltd, it is analysed that the corporation
has made the annual report by making focus on the conceptual framework. The appropriate
guidelines have adopted by the corporation to accumulate, recognise, and evaluate the
financial performance of company (Chand, Patel and White, 2015).
Further, AASB define the conceptual framework as the practical tool, which assists the
people to know and understand the standards. The company has made the financial statement
on the basis of AASB rules. The financial statements and accounting of the company have
been made on the basis of conceptual guidelines (Deegan, 2014) .Together with the
appropriate financial statement, financial notes have made to develop the shareholder’s
understanding in respect of) the financial aspects. It states that every transaction has been