University Report: ACC510 Financial Reporting, AASB 101 Presentation

This report provides a detailed analysis of AASB 101, the Australian Accounting Standards Board standard for the presentation of financial statements. It begins with an introduction to AASB and its role in setting financial reporting standards. The report then explores the objective and scope of AASB 101, along with key definitions. It delves into the general features of financial statements, including fair presentation, going concern, accrual basis, materiality, and aggregation. The core of the report covers the structure and content of financial statements, focusing on the statement of financial position, profit or loss and other income statements, statement of changes in equity, and the cash flow statement. Each section includes detailed explanations of the required elements, disclosures, and the related accounting standards (AASB 107, AASB 116, AASB 138, AASB 13 and others). The report emphasizes how AASB 101 guides users in making informed economic decisions by providing a clear view of an entity's resources, performance, financial position, and cash flow. The report also references several other accounting standards that are essential for maintaining the accuracy and transparency of financial statements.

Running Head: AASB 101- PRESENTATION OF FINANCIAL STATEMENT
AASB 101- Presentation of Financial Statement
Name of the Student
Name of the University
Author Note

1AASB 101- PRESENTATION OF FINANCIAL STATEMENT
Introduction
The AASB refers to the Australian Accounting Standards Board that is an
organization of the government of Australia. This helps in maintaining and developing the
standard related to financial reporting through a conceptual framework. These standards are
applicable to private organizations as well as in public organizations.
“AASB 101”- Presentation of Financial Statements is introduced by AASB as
Section 334 within the Corporation Act 2001 on 24 July 2015 (Aasb.gov.au 2019). The
amendment made in this standard is applicable to the period begins from 1 January 2019 and
must be prior to 1 January 2020. The amended standards reflect in Paragraph 1-Aus 126.6.
Reference to this accounting standard, many other standards are available for 101
accounting standard for a proper structure and guidance so that it can declare a transparent
report.
Objective
Paragraph 1 of this standard states its objective- as this standard covers the financial
reports that seem to have information of high quality. This basically considers the whole
requirement for preparing of entity’s financial reports with proper guidelines for maintaining
the structure. The main objective of this standard for the financial report is to reveal an
entity's financial position, performance and cash flow. This brings transparency for the users
and easily compare the presented information to take their economic decisions.
Scope
According to Paragraph 3-6, the scope for this standard discussed as the first
accounting standard considering the financial statement in Australia. Introducing with the
financial position’s standard considers the measurements, acknowledging and disclosure

2AASB 101- PRESENTATION OF FINANCIAL STATEMENT
about different transactions and events that the entity should have to present consider to the
date of start of this standard (Hodgson and Russell 2014). However, this standard is not
applicable in the structure and content of an interim financial report. The standard is applied
to both entities those who prepare consolidated reports and also to those who prepare separate
financial reports.
Important Definitions as per Paragraph 7
o The general purpose of Financial Statement is the report that is being prepared to
help and guide the users who cannot directly contact with the entity for their required
information.
o Impracticable is a situation when an entity is not able to apply a requirement after
making every effort.
o Material Omissions are those misstatements that can affect the user decision which
they made on the basis of the reports presented by an entity.
o Other Comprehensive Income includes the components of income as well as of
expenses that have not been identified in the profit and loss required by else
accounting standard of Australia.
o Total Comprehensive Income reflects the equity due to various transactions
capability and occurrence of events during a period, but other than the changes
occurred from the transaction as per the owner’s capability (Aasb.gov.au 2019).
Hence, it includes the elements of profit/loss as well as of other comprehensive
income.
Financial Statement
 Purpose (As per Paragraph 9)

3AASB 101- PRESENTATION OF FINANCIAL STATEMENT
The financial statement is a report of an entity that is reflected in a well-structured
way. It represents a clear view of an entity's resources, performance, financial position and
their cash flow during a period. This statement prepared by an entity helps the users in
making their decisions more effectively (Libby and Emett 2014). This all is through the
provided information about the entity’s assets, liabilities, equities, all income as well
expenses, contributions by owners and distribution to owners as per their capability and all
the related Cash flows.
 General Features as per Para 15-45 represents financial statement’s Fair
Presentation acquiescence with required standards that helps in reflecting a real and
impartial view of the financial statement (Bazley, Hancock and Robimson 2014).
Further it consists of appropriate disclosures, on the basis of Going concern, Accrual
basis of accounting (except cash flow), materiality and aggregation by separating
similar items and dissimilar nature of an item, offsetting unless permissible by AAS,
frequency of reporting (time gap of reported presentation) and related comparative
information in the statements.
Structure and Content
The standard deals with the preparation and presentation of a financial statement
including all the related reports such as profit and loss, cash flow followed by AASB 107 in
a more accurate and authentic manner. As per paragraph 47 and 48, the standard reflects
disclosure in a broader sense with all the elements that have put in the reports also needed to
the accounting standard of Australia.
 Financial Position Statement
The statement of financial position reflects the detail about the ownership, all the
resources and obligations of a company or an entity on a particular date. It can be used for

4AASB 101- PRESENTATION OF FINANCIAL STATEMENT
doing a proper financial analysis like debt to equity, assets to liabilities. As per Paragraph 54
of this standard Financial statement includes eighteen compulsory items consisting Property,
plant and equipment on the top followed by assets, intangible assets, liabilities, cash, interest,
inventories and other payables. As per Para 56, if an entity is representing its current and
non-current assets as well as liabilities separately then, it does not need to categorize deferred
tax assets as current assets and same with the liabilities in their financial statement.
In the preparation of this statement, accounting standard AASB 16 for Property,
Plant and Equipment is necessary to disclose about the investment and other changes made
in their (entity’s) property, plant and equipment. Thus, clearly, determine and states the
amount of depreciation, carrying costs and loss for damage related to them. Additionally, it
helps in disclosing the acquisition of multiple assets, price, date, restoration cost, and reflects
their fair value (Hu, Percy and Yao 2015). As per Paragraph 59, various bases of
measurement of the asset reflects the nature and the function of an asset as in a separated
classified item separately. The different type of property, plant and equipment carries a
particular cost and also can revalue cost taken as per AASB 116.
The information about the intangible assets, as mentioned in Para54 (c) have to
present in the financial statement. AASB 138 for Intangible Assets provides necessary
guidance and dealing specifically with intangible assets that do not deal with other standards.
AASB 138 helps in recognizing the asset, amount and further disclosures related to an
intangible asset which provides assistance to prepare an accurate report.
 Profit/ loss and other Income Statement
This statement reflects about the whole summary of the revenues and expenses of an
entity in a specific period, whether it is fiscal or quarter or a year. This shows the financial
progress of an entity in a particular time period. As per Paragraph 81A of this standard if an

5AASB 101- PRESENTATION OF FINANCIAL STATEMENT
entity is preparing and showing a separate profit/loss statement for a period, then it does not
require to show this section in other comprehensive income. Addition to this Para 82 sates
the information that is required to put in the profit/loss section are the amounts of revenue,
gains as well as losses, cost of finance, impairment losses, any sharing associated to the joint
venture, tax expenses and also amount from the discontinued operations.
In this, the need for fair value is so much important to create authenticity in the
statements. AASB 13 for Fair Value Measurement is required as it helps in define the fair
value and creates a single framework under standard in which the amount considers and
declare a fair value. The entity’s need to make a fair value disclosure about the amounts they
mentioned as per this AASB 13 that brings more clarity and authenticity in the disclosed
value in profit or loss statement (Dunbar and Laing 2017). It is stated in Paragraph 88 of this
standard that an entity has to identify all the income and expenses made within a period for
the profit /loss statement until Australian accounting standard permits the otherwise any
condition.
Further, as per Paragraph 96, AASB 138 Intangible assets and AASB 116 helps in
eliminating the adjustments to reclassifications in the comprehensive income that has raised
due to the changes in revaluation surplus. Any such occurrence can be transferred to the
retained earnings.
 Statement of Changes in equity
This statement is prepared to reflect the changes that occurred in the equity of the
shareholder or owner (assets-liabilities) during an accounting period. This shows the entity’s
share capital or the issued shares value for the shareholders (Aasb.gov.au 2019). According to
Paragraph 107, a company have to declare the price of dividends to be distributed, or the
dividend per share either in the equity’s statement or in the notes.

6AASB 101- PRESENTATION OF FINANCIAL STATEMENT
 Cash Flow Statement
This statement shows the information about the arrival of cash from ongoing
operation and outflow of cash that has been paid by an entity for the required business
activities (Tran 2015). According to Para 111 of this standard, AASB 107 for Statement of
Cash Flows guides the entity through the mentioned requirements about the information of
cash flow that is needed to be presented and any disclosure for that.
AASB 101 requires the assistance of many other standards to maintain its accuracy
and transparency. This helps the users in recognizing the real position of the company, their
assets and liquidity position so that the user can properly evaluate and take a beneficial
decision for themselves.

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Reference
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2019.
Aasb.gov.au 2019. online Aasb.gov.au. Available at:
https://www.aasb.gov.au/admin/file/content105/c9/AASB138_08-15_COMPjul17_01-20.pdf
Accessed 19 Sep. 2019.
Aasb.gov.au 2019. online Aasb.gov.au. Available at:
https://www.aasb.gov.au/admin/file/content105/c9/AASB13_08-15_COMPfeb16_01-19.pdf
Accessed 18 Sep. 2019.
Aasb.gov.au 2019. online Aasb.gov.au. Available at:
https://www.aasb.gov.au/admin/file/content105/c9/AASB116_08-15_COMPdec16_01-
19.pdf Accessed 18 Sep. 2019.
Aasb.gov.au 2019. online Aasb.gov.au. Available at:
https://www.aasb.gov.au/admin/file/content105/c9/AASB107_08-15_COMPmar16_01-
19.pdf Accessed 18 Sep. 2019.
Aasb.gov.au 2019. Accounting standards. online Aasb.gov.au. Available at:
https://www.aasb.gov.au/Pronouncements/Current-standards.aspx Accessed 18 Sep. 2019.
Bazley, M., Hancock, P. and Robinson, P., 2014. Contemporary Accounting PDF. Cengage
Learning Australia.
Dunbar, K. and Laing, G.K., 2017. Deconstructing the Accounting Standard AASB 13 Fair
Value: Exit vs Entry Price for Assets. Journal of New Business Ideas & Trends, 15(2).
Hodgson, A. and Russell, M., 2014. Comprehending comprehensive income. Australian
Accounting Review, 24(2), pp.100-110.
Hu, F., Percy, M. and Yao, D., 2015. Asset revaluations and earnings management: Evidence
from Australian companies. Corporate Ownership and Control, 13(1), pp.930-939.
Libby, R. and Emett, S.A., 2014. Earnings presentation effects on manager reporting choices
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Tran, A., 2015. Can taxable income be estimated from financial reports of listed companies in
Australia. Austl. Tax F., 30, p.569.

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