Financial Statement Information Report: AGL Energy's Financials

This report provides an analysis of the financial information of AGL Energy, focusing on how external users can understand and apply this information to real-world activities. The report examines the role of financial statements in providing insights for external users and discusses the importance of accounting standards and generally accepted accounting principles (GAAP) in preparing these statements. It explores the balance sheet and income statement, detailing their components and how they reflect AGL Energy's performance, including the application of the accounting equation (Assets + Expenses = Equity + Revenue + Liabilities). The report emphasizes the qualities of financial information, such as faithful representation and relevance, and their impact on the understanding of business performance. The conclusion summarizes the key findings, reinforcing the value of financial information in understanding AGL Energy's financial position and performance.

Running head: FINANCIAL STATEMENT INFORMATION
FINANCIAL STATEMENT INFORMATION
Name of the student
Name of the University
Author’s Note:

1FINANCIAL STATEMENT INFORMATION
Executive Summary
The purpose of this report is to specify how financial information of AGL Energy helps external
users to gain an understanding of the information and apply them to real-life activities. It also
discovers how financial statement helps the external users most probably but earlier it was
confined to a firm only. The study measures different accounting rules and policies such as
accounting standards, and generally accepted accounting principles (GAAP) are an essential
mark against preparing financial statements of AGL Energy. Lastly, discussion related to the
Balance sheet and income statement is made in the report along with some accounting concepts
and equation.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

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Introduction
In my opinion, after going through Chapters 1 and 2, I discovered that the study focuses
on economic and financial information that helps managers to make effective decisions for the
day –to day activities and performance (da Silva Nogueira & Jorge, 2017). In addition, I also
came to know about different rules of accounting and concepts helping us to get connected and
understand the realities of AGL Energy. After that, I acknowledged some ideas on the balance
sheet and income statements that have different groups and how they show us the performance of
their activities. It also amazed me how the five elements of the Balance sheet and income
statement works for ‘AGL Energy’, putting them in equation.
Discussion
Financial information helps external users to gain an understanding of the information
and apply them in real-life activities. I understand that financial statement helps the external
users most probably but earlier it was confined to a firm only. It also made the points clear that
activities of business create influence on customers, employees, suppliers, competitors,
regulators, tax authorities, and many others who have truthful interest in knowing how firms are
performing. It made my doubts clear regarding double-entry accounting, which includes the
effect of transactions and operations of a business on the business itself, including its equity
owners by outlining the fundamental accounting equation (Rahim, 2018). Different countries use
ensure to follow accounting standards but my concern is what are accounting standards? Further,
I develop an idea about

4FINANCIAL STATEMENT INFORMATION
different accounting rules and policies such as accounting standards and generally
accepted accounting principles (GAAP), are an essential mark against preparing financial
statements of AGL Energy. In different countries, these standards are applied in the preparation
of financial statements only when the information is used by the users. Again one question came
into my mind which companies are abide by these rules? I get to know that only those companies
which prepare and issue general purpose financial statement are abode by the with these rules of
accounting. The general-purpose financial report is presented to a wide range of external users,
and they get their information from it (Agustiningsih, Murni & Putri, 2017). According to my
study, it is clear that along with preparing and issuing a general-purpose financial statement, it is
vital to comply with these rules if the company is a reporting entity. A reporting entity is an
entity which leads to recognizing different types of users who require general purpose financial
statement from the entity to make decisions regarding resource allocation (Carey, Potter &
Tanewski, 2014).
Another question that has come to mind is to know about the quality of financial
information and how it should be presented so that it cannot seem to be difficult for its users to
understand? The poor quality of information makes the financial statement less helpful to gain
insights into the reality of business performance. In this case, I will state two important qualities
included in a financial statement of ‘AGL Energy’ Company, which are faithful representation
and relevance. The first quality is all about the relevant facts and figures, which can tend to
influence my decision and accordingly to act whereas, faithful representation states I can surely
rely on information with factual and error-free data. This quality will surely help me to gain
insights into the realities of business by stating what is precisely going on in a business. Both of

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these qualities interact with each other, whose information can help me to know the realities of
the ‘AGL Energy’ that is genuinely important to me.
What exactly balance sheet and income statement of ‘AGL Energy’ Company look like?
I discovered this by simply identifying an annual report of a company. Balance sheet depicts the
financial position of a firm at the end of a particular financial year where assets and liabilities are
included (La Rosa, Moscariello & Bernini, 2016). All the line items should be appropriately
measured and adjusted if there is any depreciation or provision related to a particular line item.
In addition, I understood that the income statement deals with all the income and expenses,
including all taxes and interest if any. The Balance sheet and Income statement include five
components, such as- assets, liabilities, equity, revenue, and expenses. This helps to form an
accounting equation which works for every business: Assets + Expenses = Equity + Revenue +
Liabilities (Gadd, 2018).
Balance sheet shows a relationship that prevails between an entity and its owners and
other financial institutions.
Conclusion
Thus from the above discussion, it has been concluded that Financial information of AGL
Energy helps external users to gain an understanding of the information and apply them in real-
life activities. I understand that financial statement helps the external users most probably but
earlier it was confined to a firm only. I discovered how different accounting rules and policies,
such as accounting standards and generally accepted accounting principles (GAAP), are a vital
mark against preparing financial statements of AGL Energy. In addition, Balance sheet depicts
the financial position of AGL Energy at the end of a particular financial year where assets and

6FINANCIAL STATEMENT INFORMATION
liabilities are included, whereas income statement deals with all the income and expenses,
including all taxes and interest, if any.

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References
Agustiningsih, S. W., Murni, S., & Putri, G. A. (2017). Audit findings, local government
characteristics, and local government financial statement disclosure. Review of
Integrative Business and Economics Research, 6(3), 179.
Carey, P., Potter, B., & Tanewski, G. (2014). Application of the Reporting Entity Concept in A
ustralia. Abacus, 50(4), 460-489.
da Silva Nogueira, S. P., & Jorge, S. M. F. (2017). The perceived usefulness of financial
information for decision making in Portuguese municipalities. Journal of Applied
Accounting Research.
Gadd, H. R. (2018). The Accounting Equation and Redemption. The Journal of Biblical
Foundations of Faith and Learning, 3(1), 18.
La Rosa, F., Moscariello, N., & Bernini, F. (2016). From the income statement model to the
balance sheet model: an empirical analysis on the impact on SMEs’ earnings quality.
Rahim, M. A. (2018). Another Way Of Learning Double Entry In Accounting: The Mnemonic
Approach. ACCOUNTING BULLETIN, 13.