Contemporary Issues in Accounting: Activist and Adacel Report Analysis

This report analyzes the annual reports of Activist Limited and Adacel Technologies Limited, focusing on their adherence to Australian Accounting Standards (AASB) and International Financial Reporting Standards (IFRS). The report examines the companies' use of the conceptual framework, comparing and contrasting their financial reporting practices. It assesses their compliance with accounting standards, including the presentation of financial statements, assets, liabilities, and cash flow statements. The analysis includes a review of the directors' reports and notes to the financial statements, highlighting differences in disclosures. The report concludes with recommendations based on the findings, emphasizing the importance of transparency and compliance with accounting standards for effective financial reporting. The report also covers the role of AASB and IASB in financial reporting.

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Contemporary Issues in Accounting

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Executive Summary
This report is proposed in order to calculate the annual reports of Activist Limited and Adacel
Technologies Limited Company and their obedience to AASB standards. From this analysis, it
has been observed that both the companies have undoubtedly followed IASB and IFRS for
creating a yearly report. Both the companies have used AASB standards for making a financial
report for the company in the annual report. Companies must follow their country accounting
standard to be more effective in their company’s financial report and disclose all the aspect in
compliance to ASSB. It is very important for the companies to disclose all the details in the final
accounts and activities happen in the organization related to the cash flows. The annual report of
Activistic Limited shows that the company has followed the Australian Accounting Standards
that comprise Australian equivalents to international financial reporting standards (AIFRS).
Obedience with AIFRS makes sure that annual report includes the financial statement, obeys
with (IFRS) International Financial Reporting Standards.
The Adacel Technologies Limited follows the basic accounting principles while making the
company financial report. Company consistently follows the accounting principles every year in
making of annual report. Adacel Technologies Limited prepared their report in accordance with
Australian Accounting Standards and interpretation concerned by the (AASB) Australian
Accounting Standards Board and follows the Corporation act 2001. The combined annual report
of Adacel technologies Limited meet the terms of (IFRS) International Financial Reporting
Standards as rules suggested by the International Accounting Standards Board (IASB).

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Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Estimate the conceptual framework with reference to the chosen company’s annual report..........5
Annual report Adacel Limited and Adacel Technologies Limited..................................................6
Revise conceptual framework in addressing the difference in corporate reporting......................11
Clarification in the Directors Report and in the Notes to Financial Statements............................14
Compare and contrast of the two annual reports, identify the differences in disclosures of these.
.......................................................................................................................................................14
Recommendations:........................................................................................................................16
Conclusion:....................................................................................................................................17
References:....................................................................................................................................18

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Introduction
The fundamental need behind this report is to understand the different standards used by the
listed companies in (ASX) Australian Stock Exchange while making their financial report. Every
listed company follows their own country rules and regulations of accounting standard while
preparing the annual report of the company. Along with this, every listed company in stock
exchange has to follow the terms and conditions of the stock exchange of that country. For
understanding the accounting standards of ASX, the two companies have been chosen Adacel
Technologies Limited and Activistic Limited. The report also complies the information that the
two chosen companies making the financial report in accordance with AASB or not. The report
includes the assessment between the financial reports of the chosen companies. This report is
made to find out the difference between the financial reports of the companies and the reason
behind the differences. The report includes financial notes of the company’s in the director’s
annual report and there is also a comparison between both the company’s annual report and
shows the effectiveness of the annual report

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Estimate the conceptual framework with reference to the chosen company’s annual report
It is necessary for the companies that are listed in stock exchange to follow their accounting
standards in order to prepare the financial reports of the company. In, Australia, AASB has the
main motive to regulate the financial and accounting reporting practices followed by the
companies. The companies tend to follow the accounting standards in order to increase the
transparency in the financial report (Ahmed, et. al., 2012).
Adacel technologies limited and Activistic limited follows the IFRS and IASB just to meet the
regulatory requirements required in the preparation of the financial report. The AASB
(Australian Accounting Standards Board) evolved the standards of accounting that has to follow
by the organization while structuring their financial report. At the beginning stage of IFRS, it
makes availability of the estimated framework of report, which necessitates the loyalty of the
organizations while reporting for the basic annual statements like revenue, expenses, liabilities,
assets and detail of shares. Companies consistently follow the IFRS during their business
functions at the time of purchasing the assets. According to IFRS, the companies are required to
mention the purchase of assets, use of assets and if any earning that has been done through the
sale of assets than it should be clearly mention in the financial report.
Assets are mainly dividing into two parts such as current assets and noncurrent assets. The
differences between both the assets are, currents assets are the inventories, cash, and market
securities and cash equivalents whereas noncurrent assets are those assets that have the life of
more than one year for the company these assets are property or plant and machinery (Ahmed, et.
al., 2012). The (AASB) Australian Accounting Standard Boards says that, there must be a proper
record of assets in the balance sheet. Cash flow statement also shows the sale and purchase of
assets because in cash flow statement companies records the source of cash income and records

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the reason that can be held liable for cash outwards from the company. For the effective financial
report, company should record all of these assets by fulfilling the requirements of AASB and the
ethics laid down by the IFRS. Activistic limited and Adacel technologies limited accumulate the
AASB and IFRS in order to identify the liabilities and assets in the annual report. The worth of
assets and liabilities are revealed in the balance sheet of both the companies in their annual
financial reports. While making the financial report by the companies, both the companies have
identified the requirements and policies of the IASB and AASB. It shows that the selected
companies have followed the accounting standard of AASB and IASB in making financial
report.
Annual report Adacel Limited and Adacel Technologies Limited
After analyzing the annual report of both the companies. It shows that the annual report of the
companies has made under the procedure of AASB. For confirmation, the screenshot of balance
sheet and income statement of Activistic limited and Adacel Technologies limited are attached
below.

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Income Statements of Activistic Limited
Following snapshot provides the income statement of Activistic Limited for the accounting
period of 2015-16:

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Balance sheet of the Activistic Limited
The snapshot of balance sheet of Activistic Limited for accounting period of 2015-16 is as
below:

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Income Statement of Adacel Technologies Limited
The snapshot showing the statement of profit and loss for Adacel Technologies Limited for
accounting period 2015-16 is as below:
(Source: Adacel Technologies Limited 2016)

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Balance Sheet of Adacel Technologies Limited
The following snapshot provides the balance sheet Adacel Technologies Limited for accounting
year of 2015-16:
(Source: Adacel Technologies Limited 2016)

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(ASSB) Australian Accounting Standards Board plays an essential role in financial reporting of
the company to identify the accounting principles. The main aim of accounting standards is to
provide full and relevant financial information to creditors, investors, shareholders, bank
institution and key stakeholders. Accounting standards provides the guidelines to the company
for preparing the financial statements and its company responsibility to follow all the procedure
of accounting standards (Cheong, et. al., 2010).
The Australian Accounting Standards Board is developed to maintain the financial reporting
standards relevant to the public or private entities, which does affect on the Australian economy.
The Australian Accounting Standards Board is an autonomous bookkeeping standard setter
based in Melbourne, Australia. It includes 11 Board members with the chair. The minister selects
the chair for Superannuation and Corporate law and members. The AASB is focused to
increasing, in the public awareness a set of high quality, and easily understandable accounting
standards that necessitate clear and equivalent information in general principle monetary
statements. It helps in contributing to the expansion of worldwide financial reporting standards
and makes easy the involvement of the Australian economy in worldwide standard setting. The
power and functions of AASB are meant in the Australian securities and Investment Commission
Act 2001. The Australian Accounting standards Board is an Australian Government Agency
(Cheong, et. al., 2010).
Revise conceptual framework in addressing the difference in corporate reporting
The aim of IFRS is to provide worldwide structure for how private and public companies
disclose their financial statements. International Financial Reporting Standards (IFRS), it is a set
of accounting standards developed by a self-governing. Not for profit, organizations known as
International Accounting Standards Board.

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In December 2013, the Australian Accounting standards Board did modification in their
framework for the betterment of appearance and preparation of the monetary statements, which
is integrated in the chapter 1 to 3 of the IASB conceptual framework for financial reporting
which published in September 2010. According to conceptual structure of chapter 3 and chapter
1 are rectify in the International Accounting Standards Board that are mandatory in the
framework of IASB, instead of altering the complete framework chapter 1 and chapter 3 are
allowing for framework of afterthought in IASB (Pike, et. al., 2015). The revelation summary
contains the IASB that offers the modification in the conceptual framework that are planned to
raise the quality of annual report of the company by providing clear and complete instructions
along with this a set of revised theories.
The International accounting standards foundation was integrated as a tax excused organization
in the U.S. state of Delaware. There are 13 full time Board members and each one of them had
one vote. It is part of three-tier structure employed by the IFRS.
Role of IASB
The IASB has entire responsibility for all mechanical matters and the IFRS Foundation
Constitution gives this responsibility to IASB.
 The issuing and approval of construal developed by the IFRS Interpretations Committee.
 Complete prudence in pursuing and making its technical schema. Subject to specific
discussion necessities with the public and the Trustees.
 The issuing and preparation of IFRS and exposure drafts subsequent due procedure fixed
in the constitution.
There are several elements that occur in the conceptual structure along with this there are some
parts in large component. These parts compact with the presentation or disclosure, financial