Accounting Concepts Report: Financial Analysis and Measurement

This report examines fundamental accounting concepts, including the cost, accrual, matching, realization, dual aspect, going concern, accounting period, money measurement, and business entity concepts. It analyzes the conceptual framework and the debate over measurement in accounting, with a specific focus on the Southern Cross Media Group. The report discusses the application of historical cost, impairment testing, and amortization. Furthermore, it explores fundamental qualitative characteristics such as relevance and representational faithfulness, assessing their importance in accounting for assets and liabilities. The analysis highlights how these concepts and characteristics impact financial reporting, transparency, and the overall understanding of financial statements. The report emphasizes the importance of adhering to accounting standards for domestic and international harmonization.

Accounting Concepts
Module Number

Table of Contents
Introduction...........................................................................................................................................2
1. Identify and describe the accounting concepts used.......................................................................2
2. With reference to the conceptual framework, and the debate over measurement in accounting.
Using your allocated company discuss the issue of measurement and provide examples......................5
Conceptual framework and debate over measurement.......................................................................5
Measurement applied in Southern Cross Media group Company......................................................6
3. Fundamental qualitative characteristics and understanding of relevance and representational
faithfulness in relation to the useful information of the financial statements and if one are more
important than the other, in accounting for assets and liabilities...........................................................6
Which kind of qualitative characteristic is more important for valuation of assets and liabilities......7
Conclusion.............................................................................................................................................8
References.............................................................................................................................................9

Introduction
In this report, fundamental accounting concepts and qualitative intents of the prepared
financial statement of the company has been discussed. It is considered that in order to
strengthen the transparency of the recorded items in the books of account, there is need to
comply with the applicable accounting standards and legal laws. However, harmonization in
the prepared financial statements on domestic and international level is based on the
compliance with the domestic and international accounting standards. In this report, Southern
Cross Media group Company has been selected. This report divulges the key understanding
on the accounting concepts, conceptual framework and fundamental qualitative characteristic
of the financial statement of the company.
1. Identify and describe the accounting concepts used
1. Identify and describe the accounting concepts used
The main concept of the accounting has been formulated from the accounting authorities
which can bring the consistency presentation and preparation in the field of financial data to
make the organization value different all over the country. The concept of accounting if very
much famous not only at national level but at international level also such as International
accounting Standards Board (IASB) which is completely based on the concept of accounting.
Also these globally accounting ideas go about as an umbrella structure which must be
embraced by associations all across the world. The accounting ideas embraced by Southern
Cross Media Group which are as per the following concepts (Eppler, and Mengis, 2014).
 Accounting Cost Concept: - This type of concept is completed based on the presentation of
the financial statement which has been using the historical cost that does not based on the
basis realisable value but its assets initially. The Usage of this type of concept shows the
reflection of the Southern Cross Media Group in terms of acquisition price. Utilization of the
bookkeeping cost idea has permitted impression of benefits in the books of Southern Cross
Media Group at the procurement cost less devaluation at the estimation of $181,654,000.
Also this idea was not in power each year the asset report would have reasonable esteem
which is reflected properly in the balance sheet.

 Accrual concept: The Accrual concept is based on the transaction record of the organization
so that when it comes to business, the business can easily transacted against the cash when it
is received. Also the record of each and every transaction is been recorded in the book after
every single transaction take place until it has not been settled.
Because of the implementation of the accrual notion, the income expense is registered in the
economic results declaration at the moment the operations were put by the company for
acquisition or any other sale-related activity. There is no relationship with the payment of
these money operations (Eppler, and Mengis, 2014).
 Matching Concept: The matching concept is used to match the income which is earned by
the business and it also calculated all the expenses which is paid in respect to the accounting
year. The deduction of the year’s expenses is only done from the expenses which has been
earned as an income from the accounting period itself. Also, the expenses of depreciation is
the $14,782,000 in the year 2008 for financial and the deduction has been shown which has
been generated form the income part in the year 2018 only.
 Realisation Concept: The notion of realization enables the company to recognize income in
the declaration of gain and loss only when the requirements linked to the right to obtain
income are achieved. If the right to obtain the income is certain, the real distribution of the
company's income is not needed.
Also this type of concept is always applied on the Southern Cross Media Group which give
correct direction to the business so that the revenue recorded can be increased and the
probability of the economic gain benefits (Eppler, and Mengis, 2014).
 Dual aspect Concept: The implementation of this idea enables the company to pursue the
billing equation in an ideal way. The implementation of this notion calls for the impact on
two sides of payments, i.e. the loan side and the debit side.
Southern Cross Media Group's economic statements were ready by using the Dual Aspect
Concept. By use of this concept, two parties of the accounts have influenced the company
operations. Software acquisition has influenced both the money account and the property
account. The assets have been increased by $70,541,000 and cash balance has declined by
$70,541,000.

 Going Concern Concept: The ongoing concern notion is used in all aspects of the preparing
of economic accounts by each company organization. Shareholders invest in company and
need assurance about the continuing existence of the company. Management implies that this
idea will be used in company and states that the company will not prevent company activities
in the near future. According to this concept, the business has made various uncertain
provisions. The Southern Cross Media Group has also made the provision based on the
current and non-current which is worth of $15,987,000 and the $65,758,000 respectively for
the uncertainties of the future (Zimmerman, and Yahya-Zadeh, 2011).
 Accounting Period Concept: The notion of the billing era needs the organization to split the
work lives of the organization into the same phases. These identical periods must be
implemented continuously in company. It is necessary to prepare the organization's economic
statements for these identical phases and to calculate the development of the entity; revenue;
profit; income, etc (Dumay, et al. 2016).
The Southern Cross Media group just follows the period of accounting which has to start
from the 2nd of July and it will end on the #0th June next year.
 Money Measurement Concept: The transaction is quantified and measured by the Money
measurement concept which allowed only one term of money to enter in the statement of the
finance. The financial statement entirely ignore the non-monetary measures as it not been
reflected in the statement. However, these interventions can contribute to the performance of
the study, but can nowhere be applied quantitatively and therefore totally overlooked. Due to
the implementation of this idea, the Link Group has overlooked the qualitative elements
common in company, such as employee security in the workforce, production performance,
etc.
 Business Entity Concept: This concept is based on the segregates of the owners of the
business and where it gets from the business itself. The business owner separate the business
transaction itself of both the group by just using the single set of the financial statement. Also
the business book includes all the transaction other than the external one (Schaltegger, and
Burritt, 2017).
It is due to the implementation of the company entity notion in the Link category that called
on the community to demonstrate the cash collected from the shareholders in the form of

shares under the category of liabilities and equity and not property. The cash collected from
the holders must be returned to them and is not the property of the organization.
2. With reference to the conceptual framework, and the debate over measurement in
accounting. Using your allocated company discuss the issue of measurement and
provide examples.
Conceptual framework and debate over measurement
It is considered that the conceptual framework followed in the books of account helps in
measuring the liabilities, assets and income and expenditure recorded. However, in order to
measure these accounts, proper measurement method, amortisation method and other costing
method are followed (Bovens, 2007). However, impairment testing is also one of the method
followed to strengthen the measurement concepts in the recorded items. However,
conceptual framework followed by the all the listed companies in the Australia needs to be
aligned with the frameworks and guidelines set by the IASB accounting standard
(Schaltegger, and Burritt, 2017).
It is considered that there are several costing method to determine the true value of the
recorded items in the books of account. The historical costing method allows company to
identify the true value of the recorded items. However, the historical costing method is used
with the impairment testing method to identify the present value of the assets. It helps
company to identify the impairment loss occurred on the assets historical value. The
historical value determine the value of the assets at its cost. This method is preferred method
which is used by company to make the less complexities in the recorded assets. It helps in
determining the realised value and current proposition of the assets held by company in its
financial statement (Zimmerman, and Yahya-Zadeh, 2011).
. Another valuation method is fair value method which is used to identify the market value of
the recorded items in the financial statement. This helps in determining the organization value
and based on the earning management concept of the organization. This method is ideally

not followed due to the discrepancies created by the management department in the
manipulation of the financial statements (Meyer, and Land, 2015).
Measurement applied in Southern Cross Media group Company
It is analysed that financial statement of the company has been prepared by using the
historical cost method. All the assets have been recorded at the historical cost and considering
the depreciation effect. The measurement of the provision recorded in the books of account at
the cost and future cost redundancies. For instance, property and plants are recorded at their
purchase price and value is deducted with the depreciation rate. The goodwill is also
recorded at the historical value irrespective of its market value. The impairment test also
helped in determining the true value of the recorded items by deducing the impairment loss
from the historical cost. The amortization cost is also used to assess the value of the assets
(Ouchi, 2019).
3. Fundamental qualitative characteristics and understanding of relevance and
representational faithfulness in relation to the useful information of the financial
statements and if one are more important than the other, in accounting for assets and
liabilities.
It is analysed that the conceptual framework of the company is used to prepare the financial
statement of Southern Cross Media group Company. However, fundamental qualitative
characteristics are followed by the company to maintain the uniformity in the recorded items
with the other accounting standards (Barth, et al. 2011). It is required to follow the set
qualitative characteristic by the Southern Cross Media group Company to maintain the
transparency and fair and true view of the recorded items in the books of account. It is
mandatory for the listed companies to comply with these fundamental qualitative
characteristic (Eppler, and Mengis, 2014).
Nonetheless, below are the given two fundamental qualitative characteristic which needs to
be followed by the Southern Cross Media group Company in its prepared financial statements
and recorded books of account (Adams, 2015).
Relevance: - All the recorded items in the financial statement needs to be recorded to the
extent it is imperative or material to its stakeholders. The unnecessary information should be
avoided while recording the financial and no-financial transaction in the financial statement.

The financial statement of Southern Cross Media group Company must reveal the material
qualitative items and should not take into account those information which are imperative or
material to its stakeholders (Barad, 2018).
In case of Southern Cross Media group Company, it is found that company has avoided those
information which are imperative or material to its stakeholders. In addition to this,
qualitative concept of the followed relevancy concept has revealed that company reflected all
the financial figures recorded in the books of account by rounding off them to the closed
thousand. It has also given the supporting notes in the notes to account of the annual report
for the same. The uncertainty, audit risk model has also been disclosed by the company in its
annual report to make the shareholders and other stakeholders more informed (Bosse and
Phillips, 2016).
 Faithful representation: It is analysed that the qualitative intents developed in the followed
conceptual framework of the books of account reveals that company has maintain the
transparency in the recorded items and also given the economic phenomenon of the business
operating in the particular year (Cardona, Chica, and Barragán, 2018). It is considered that
adoption of the faithful representation qualitative concepts has allowed company to make
authentic and true and fair disclosure of the recorded business values to its stakeholder. It
shows that all the recorded assets and liabilities in the financial statement needs to be valued
at its true value. The financial statements should reveals the true value of the recorded items
which eventually helps in taking the investment decisions (Dinnie, 2015).
Which kind of qualitative characteristic is more important for valuation of assets and
liabilities
There are several qualitative intents adopted in the conceptual framework of the organization
for the valuation of the assets and liabilities recorded in the financial statement. However,
these qualitative characteristic is used to strengthen the comparability, uniformity,
interpretation of the recorded items and maintain the transparency in its books of accounts.
It is analysed that in order to identify the true value of the recorded assets in the books of
account, computation of the value should be done on the basis of proper assumptions
(Dumay, et al. 2016). IAS 137 should be periodically followed to identify the impairment
loss of the assets recorded.

Valuation of the assets could be done by considering the materiality of the information
faithfulness. In case of Southern Cross Media group Company, it is found that company has
avoided those information which are imperative or material to its stakeholders. Therefore, it
could be inferred that there is no single qualitative characteristic which should be considered
only as compared to others. These qualitative characteristic helps organization to strengthen
the reporting framework and also align its domestic reporting compliance with the
international accounting and reporting framework (Evans, et al. 2016).
Conclusion
After analysing the annual report of Southern Cross Media group Company, it has
been found that company has kept higher transparency in the recorded financial items by
complying with the IFRS rules and accounting standards. However, the international
accounting conceptual frameworks has been adopted by the Southern Cross Media group
Company to align or set up harmonization in the domestic and international accounting
framework. This has allowed company to disclose all the imperative information to its
stakeholder with the true and fair view aspects. IAS 137, AASB 138 has been followed by
company to identify the true value of the recorded intangible assets covering high value in the
books of account.

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