Contemporary Accounting Theory Report: ACCT20074, Term 1

This report delves into contemporary accounting theory, focusing on conceptual frameworks and financial reporting practices. The report is divided into two main sections: Part A examines the conceptual framework, tracing its development in the USA, UK, Australia, and globally under the IASB. It also addresses the Australian accounting profession's concerns regarding the application of the IASB/IFRS framework and critically discusses academic perspectives on its quality and potential drawbacks. Part B explores integrated and sustainability reporting, including the GRI framework and Integrated Reporting under IIRC, with a focus on two companies: Blackmores Limited (Australian) and Anheuser-Bush InBev (South African). The report analyzes their financial statements, including the application of accounting standards, asset valuation, liability recognition, and disclosure practices. The analysis covers aspects such as the use of historical and fair value methods, treatment of trade receivables, fixed assets, intangible assets, liabilities, and lease accounting. The report concludes by summarizing the key findings and implications of the analysis.

Running head: Accounting Theory
Accounting Theory
Name of the Student
Name of the University
Author Note

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Table of Contents
Executive Summary...................................................................................................................3
Introduction................................................................................................................................3
Part A: Conceptual Framework..................................................................................................3
Requirement (a):.....................................................................................................................3
Requirement (b):....................................................................................................................5
Requirement (c):.....................................................................................................................5
Requirement (d):....................................................................................................................6
Part B: Integrated/Sustainability Reporting...............................................................................8
Requirement (a):.....................................................................................................................8
Requirement (b):....................................................................................................................9
Requirement (c):...................................................................................................................10
Requirement (d):..................................................................................................................11
Requirement (e):...................................................................................................................12
Conclusion................................................................................................................................13
Reference..................................................................................................................................14

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Executive Summary
The report is been based upon the contemporary accounting which also show details
of the sustainability report of the company and it also able to describe the conceptual
framework in the company. It show about the Australian company Blackmores limited and
the South African company Anheuser-Bush InBev. It show about the different accounting
framework and the sustainability reporting of the company.
Introduction
Contemporary accounting helps the company to perform different types of role in the
company (Adams 2017). This report show different aspects of the contemporary account and
also it able to show the different sustainability and conceptual framework of different
company. The report can be separated into two sections. The first section of the report is able
to show the different types of the conceptual framework in regards of the financial reporting.
The second section of the report show the company is able to show the different accounting
framework which the company is using and also it able to show the different sustainability
report of the company. It also able to show the GRI framework and also the Integrated
Reporting under IIRC (Adams 2015). The report is been based upon Blackmores limited
which is an Australian company and Anheuser-Bush InBev which is a South African
company.
Part A: Conceptual Framework
Requirement (a):
As per the decade it can be said that there is a very big background in regards of the
conceptual framework as many big nation are involve in the same such as Australia, UK and
many other organization which have adopted the conceptual framework in regards for the
preparation of the financial reporting of the company in accordance of the IASB (Atkins &

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Maroun 2015). Conceptual framework help the investors to get the confident in the financial
statement of the company as in late 1934 the economic slum which have come up in USA
have directly affect the individual investors as they were not able to invest in the company so
to overcome the problem the government came up with the use of the conceptual framework
so that it can able to clear the problem and also it will help them to gain the confidence of the
individual in the company financial reporting. The responsibility of the developing and
managing of the conceptual framework is been given to FASB so that proper framework can
be maintain by the authority (Bebbington, Unerman & O’Dwyer 2014).
The accounting in the Australia has also able to adopt the conceptual framework in
their financial reporting in regards of the AASB. The use of the conceptual framework in
Australia is due to the affect of the global competition as if all will be able to use the same
accounting framework in the reporting than it will able to help the user to compare the
financial statement of the company with the other company so that it can able to know the
performance of the company and able to know the better company so that it can able to invest
properly in the company (Brown & Dillard 2014).
As per the UK is been concern before the adoption of the conceptual framework in the
company it used to use the rules based accounting standard which does not have any relation
with the global accounting standard as it does not have any similarities with the global
accounting standard as it is only be applicable to the UK company (Cheng et al.,2014). So to
overcome the problem and able to make proper accounting standard, the UK government is
able to apply to the IASB and able to develop the conceptual framework in the financial
reporting of the company (Churet & Eccles 2014).
Their are many other nation except the one which are been mention above and the
reason they able to shift to IASB in order that it can able to match the global accounting

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standard and able to carry the accounting process similar to the global company. It help the
company to carry business easily as it able to hold all the global accounting standard in the
company and able to match up with the global reporting of the company (Clayton, Rogerson
& Rampedi 2015).
Requirement (b):
As per the financial reposting is been concern and also the conceptual framework
there is many question which are been there by the Australia accounting profession. The first
question or concern which the profession has is related to the fair value of accounting as it is
been a rise in regards of the financial reporting with the new conceptual framework. This will
directly have an adverse affect upon the financial statement of the company and also will able
to affect then value of intangible asset and financial instruments (De Villiers, Rinaldi &
Unerman 2014). In spite of these it can also be said that it also affect the valuation method of
the asset and liability and also it will affect the disclosure of the same. As per the changes
which have come in the financial statement in regards of the adoption of the IASB it will
directly affect the interest of the stakeholder and they may have to meet up with the economic
ramifications in regards of the change which are been made by the company (Dumay et al.,
2016).
The changes of the account framework will also affect the non-profit organization
which is carrying their business in Australia (Flower 2015). As per the research it is been
found that the most company have already applied the accounting standard in their reporting
framework. As it is been necessary for the formulation of doctrine of each sector, so it will
directly affect the non-profit organization this will affect the conceptual framework of the
company (Frias‐Aceituno, Rodríguez‐Ariza & Garcia‐Sánchez 2014).

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Requirement (c):
The significant advantage which can be said in regards of the conceptual framework
is that it able to provide sufficient accounting standard and principle which will help the
company to do better reporting in the financial statement of the company. There are some
contexts which contain or show some drawbacks in regards of the theory of the conceptual
framework (Higgins, Stubbs & Love 2014). The adoption of the conceptual is not possible for
each organization as it require a lot of money and time which is not possible for each type of
the organization. The accounting in regards of the conceptual framework is not easy as it is
not a flexible so if the company has adopted the same in their accounting process than it will
be very hard for the company to come up with new ideas and concepts in regards of the new
accounting framework in the company
The conceptual framework is also been affected with the old guidelines as it able to
conflict with the rules which are already there in the guidelines so it will so if both have the
same types of the rules than it will not able follow the rule. It can be state that the conceptual
framework is not able to take all the information which are been obtained by the same. So it
can be said that there is a bit different in conceptual framework and also the AASB so it
should take both the aspects into consideration (Integratedreporting.org. 2019).
Requirement (d):
1. After the interpretation of the annual report Blackmores limited in 2018, it can be said
that the company is able to have four types of the statement which help the company
to show all the financial information of the company. The statement which are been
prepared are consolidation statement of comprehensive income, consolidated cash
flow statement, consolidated statement of the financial position and also the statement
in regards of the changes in equity. It can also be seen that the company is able to
match all the requirement as per the conceptual framework as they have given all the

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details of the accounting process in the disclosure as per the IFRS and the AASB in
regards of the financial statement of the company (Kerr, Rouse & De Villiers 2015).
The financial statement is able to elements such as asset, income, expense and
liabilities.
2. It can be seen from the annual report of the company that they have used historical
and fair value method of accounting in regards of the recognition of the revenue of the
company so that it can able to make proper accounting information to the financial
user so that it can able to have more amount of the information and able to judge the
financial statement and able to take proper amount of the decision in the company
(Serafeim 2015).
It can be seen that they are able to record proper amount of the trade receivable in the
company as the company is able to allow the credit limit from 30 – 60 so it is good
amount of credit so it will help them to get more amount of the return from the debtor
of the company. The fixed asset are been stated after deducting the depreciation
amount and the company have given proper amount of disclosure in the annual report
of the company. The intangible asset is been valued as per the accounting standard
and also proper amount of the disclosure is been given by them in the financial
statement of the company.
As per the liabilities is been concern in the company they able to use the
amortised cost method in regards of the liability and able to carry the trade payable
value also in the annual report of the company (Sierra‐García, Zorio‐Grima & García‐
Benau 2015). As per the annual report of the company is been concern it can be seen
that is able to different in the lease of the company as it have different the financial
lease and the operating lease so it will be helpful for the company financial user to
know the details of the lease and able to take the same in regards of the financial

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position of the company. The company is also able to make proper amount of the
disclosure in regards of the liabilities and also it able to make proper amount of the
provision in regards of the obligation which are there in the past event of the
company.
3. As per the proper disclosure is been made by the company it can be said that the
company is able to make proper amount of the disclosure in the financial statement of
the company and also it help the financial user to take proper amount of the decision
in regards of the financial statement (Simnett & Huggins 2015). The company is able
to have proper adoption of the accounting standard so that it can able to have a proper
amount of the presentation in the company and also help the financial user to know
more about the financial position of the company. The balance sheet of the company
is able to give the financial information for two years so it help the user to easily
compare their performance and able to know how the company is able to perform in
the market. As all the information are there in the financial report so it help the user to
get all the information at one place and also help them to know the performance of the
company in regards of the liquidity and other aspects. So as from the above
discussion it can be said that Blackmores limited is able to provide all the qualitative
information in the company financial reporting so that it will help the investor and
other users to know more about the company and able to take necessary decision for
the same as whether they should invest in the company or not.
Part B: Integrated/Sustainability Reporting
Requirement (a):
The main goal which the sustainability report has is the development of the social and
environmental factor as it also was stated in the reporting of IIRC. There is some amount of

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difference in both reporting framework (Stacchezzini, Melloni & Lai 2016). As per the GRI
sustainability reporting is been concern it can be said that it help the company to minimize
the negative impact which the company business activity is making in regards of the society,
environment and community. In the integrated reporting system it does not only takes the
financial information but it also takes the non-financial information of the company so that it
able to show the future of the shareholder and help them to know whether the plan and
objective which the company is having in the future will help the shareholder or not. So it
can be said that the both reporting help the company to show different aspects of the
organization and so it help them to know all the information which are there in the company
whether it is financial or non-financial information (Stent & Dowler 2015).
The discussion show the difference which is there in between the sustainability
reporting and integrated reporting. So this can be said that the sustainability reporting help
the company to show all the information of the policy which are been made in regards of the
social, environmental and community. This process is also been carried in the integrated
reporting framework in a different way. This reporting framework shows the long term value
by presenting the financial and non-financial information of the company so that the
stakeholder will able to know their future in the company (Stubbs & Higgins 2014). The six
capital method is been adopted in the integrated reporting so that it can able to show both
financial and non-financial performance of the company. So the basic difference which is
there in both reporting is shown above of the discussion.
Requirement (b):
The number of the benefits and drawbacks which are there in the sustainability
reporting is been shown by Conventional accounting. It can be said that in the traditional
accounting system help in providing the risk and opportunity consideration of both financial
and non-financial information. The sustainability helps the stakeholder to know all the future

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strategies of the company and how it will help their interest to grow in the organization. As
the sustainability show the internal performances of the company so it can able to mislead the
external stakeholder in regards of the traditional accounting method.
The conventional accounting system helps the company to know the drawbacks and
benefits which are there in integrated reporting framework. The traditional accounting can be
beneficial also as it help the stakeholder to know the transparency and clarity of the issue and
performance in the organization. It will help them by providing the details of the profit which
the company is earning as it will show both the financial and non-financial information of the
company. The data which is been collected by the accountant of the traditional accounting
system as they able to face issues while interpreting the performance of the company in
regards of the financial and non-financial information of the company.
Requirement (c):
The concept of the sustainability reporting and integrated reporting can be describe
with some types of theory.
Integrated reporting:
To know more about the integrated reporting concept it has to know the application of
the stakeholder theory and agency theory. As per the stakeholder theory is been concern it say
that the company should take consideration all the stakeholder and not only the shareholder
while making any decision in the company as it will also affect each class of stakeholder of
the company whereas the agency theory suggest that the company is only working on behalf
of the shareholder and their only motive should be wealth maximization so that the
shareholder will able to get more amount of the return. As per both the theory the reason why
the company should include the integrated reporting so that it will able fulfils the requirement

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of the shareholder and also the stakeholder of the company for gaining in the sustainability
performance of the organization.
Sustainability reporting:
In regards of the sustainability reporting is concern it able to use two types of theories.
The theories which are applied are legitimacy theory and stakeholder theory. As per the
legitimacy theory is been concern it state that the company should disclosed all its activities
in regards of environmental and social performance and should compulsory maintain societal
sustainability. So the above theories is been discuss so it can be sure that the company is able
to show both the financial information as well as non-financial information so that the
stakeholder will be able to know the survival of the organization in the community. This all
the points should be taken into consideration while implementing the reporting in the
organization.
Requirement (d):
Integrated Reporting Index
Responsibility: Statement from individuals responsible for governance
Strategic concentration: Insights of the strategies
Relationship with the stakeholders: Involvement with the stakeholders
Materiality: Overview of matters impacting the ability of the value creation
Governance: Information related to governance structure
External and organisational review: The activities of the organisation and its position
Risk and opportunity: Opportunities and risks engaged in the process of value creation
Business model: Information related to the business model already implemented
Preparation basis and presentation: Basis through which there is ascertainment of material
issues

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Performance: Information related to the fulfilment of strategic goals
Information disclosure of Blackmores limited:
As per the sustainability report of the company is been concern it can be said that they
have able to do the disclosure as per IIRC. The report also able to show the responsibility
which the individuals responsible for governance. The company is also able to show all the
strategies which are they have used in the strategy section of the report. It also able to
disclose all the material issue and other business model which show all the relationship and
resources of the company.
Requirement (e):
As per the website is been concern it can able to conclude that the company is
involved in the preparation of the integrated report which covers the sustainability social
reporting as well. The report cover all the aspects as the corporate social responsibility and
the sustainability initiatives of the company.
The report show that the company is able to show all the amount of the details which
are been required to be disclose in regards of the sustainability reporting. The report is able to
give all the non-financial information to the stakeholder. So it can be said that the company
is able to give more information as it have published the financial information and non-
financial information separately so that the user will able to understand all the details
properly.
As per the both company is been concern it can be said that they both have follow all
the norms and regulation while making the integrated reporting. The company Blackmores
limited is able to give more sufficient information of the non-financial which is not been able
to be provided by the Anheuser-Bush InBev.

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Conclusion
The report can be conclude as it show the different aspects of the sustainability
reporting of the company and able to show the different in the conceptual framework of the
company. The report all show different part of the Blackmores limited which is an Australian
company and Anheuser-Bush InBev which is a South African company. It can be said that
the Blackmores is able to provide more sufficient information in their report in compare to
the Anheuser-Bush InBev.
Lastly it can be conclude that Blackmores Limited is able to do the reporting as per the
adherence to IIRC. The report takes into many things into consideration and able tom show
all the financial and non-financial information of the company.

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