Financial Analysis of Argonaut Resources NL: Accounting Report

This report provides a thorough analysis of the Argonaut Resources NL annual report, evaluating its compliance with Generally Accepted Accounting Principles (GAAP) and the Australian Accounting Standards Board (AASB) standards. The report examines the company's financial statements, including the income statement, balance sheet, statement of changes in equity, and cash flow statement, to assess the company's financial performance and position. It investigates the application of the conceptual framework, including measurement requirements and qualitative characteristics, to determine whether the financial report provides relevant and faithful representation to users. Furthermore, the report discusses whether the financial report is efficiently usable by its users, if basic knowledge is sufficient for analysis, and if the company meets the requirements for General Purpose Financial Reporting. The analysis concludes that the company adheres to the relevant standards, providing information useful for investor decision-making. The report is designed to help students understand financial reporting and accounting practices through a real-world example.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
Name of the Student:
Name of the University:
Authors Note:

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Executive Summary:
The assessment has evaluated the annual report of Argonaut Resources NL, where it has been
detected that the company follows all the relevant AASB standards in preparing the financial
statement. Moreover, adequate analysis has been conducted, where the company is found to
have provided all the relevant information in their annual report, which can help the investors
in making their investment decisions. Adequate discussion is conducted that whether user of
the annual report needs more than basic information for analysing performance of the
company. Lastly, the annual report is evaluated on the abas of generally accepted accounting
principle to detect whether the organisation has followed all the rules in in preparing the
financial report.

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Table of Contents
Introduction:...............................................................................................................................4
Measurement Requirements of the Conceptual Framework:.....................................................4
Compliance with Fundamental Qualitative Characteristics:......................................................5
Compliance with Enhancing Qualitative Characteristics:..........................................................7
Indicating whether the financial report can be efficiently used by its users:.............................7
Indicating whether basic knowledge is enough to analyse the company:................................11
Stating whether General Purpose Financial Reporting is met by the company:......................11
Conclusion:..............................................................................................................................12
References:...............................................................................................................................13

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Introduction:
The assessment aims in evaluating the overall financial report of Argonaut Resources
NL in accordance with the generally accepted accounting principle. The annual report is
evaluated in accordance with the conceptual framework for detecting that all the relevant
measurement has been met. In addition, the fundamental and enhancing qualitative
characteristics of the annual report are evaluated. Moreover, adequate discussion is conducted
that whether user of the annual report needs more than basic information for analysing
performance of the company. Lastly, the annual report is evaluated on the abas of generally
accepted accounting principle to detect whether the organisation has followed all the rules in
in preparing the financial report.
Measurement Requirements of the Conceptual Framework:
The above figure represents the overall fair value measure that has been used by the
organisation, while preparing the annual report. The organisation adequately follows the
AASB conceptual frame work, where the adoption of historical cost conversion and critical
accounting estimates are used for computing the annual report. The revenue recognition is
also conducted on the basis of fair value treatment, which is based on the conceptual
framework of AASB (Argonautresources.com 2018). The organisation has used fair value
measures in evaluating investment, other financial assets, impairment of non-financial assets,
revaluation of surplus reserves, and Employee benefits. This fair value measurement has
allowed the organisation to detect the fair value for the assets listed in the annual report.

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Compliance with Fundamental Qualitative Characteristics:
The fundamental qualitative characteristics have been followed by the organisation
adequately, which are relevant and faithful representation. Both the qualitative factors are
evaluated as follows.
Faithful representation:
The figure indicates that the organisation has adequately followed all the information
laid down by the AASB and Corporation Act 2001 in preparing the annual report. The
directors declaration has adequately indicated that the company has followed ethically all the
rules laid down by the regulators in preparing the annual report and no unethical measures
have been used for manipulating the statements (Byrne 2018).
Relevance:

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Both the income and balance sheet statement listed in the above figure would
eventually allow the investors in detecting the financial position of the company for the fiscal
year of 2018. Therefore, with the help of adequate ratios and calculations the investors can
detect the financial progress that is been made by the company, which helps them make
investment decisions (Brierley and Gwilliam 2017).

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Compliance with Enhancing Qualitative Characteristics:
The enhancing qualitative characteristics have been used by the organisation in
preparing the annual report, which are depicted as follows.
 Under Comparability Characteristics the annual report of the organisation can be
compared with other organisation for detecting the financial condition and position within
the industry.
 Under Timeliness Characteristics the annual report of the organisation disclosed two
financial years’ data such as 2018 ad 2017 for allowing the investors to compare the
position with historical data.
 Under Verifiability Characteristics the organisation has provided all the relevant
verification regarding the disclosed assumptions and financial data, which is represented
in the annual report.
 Under Understandability Characteristics the financial report disclosed by the company is
concise and clear, which can be read and understood by the investors easily. The investors
do not need special accounting skills for understanding the data that has been represented
in the annual report (Conway 2018).
Indicating whether the financial report can be efficiently used by its users:
Income Statement:

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Balance Sheet Statement:

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Statement of Equity Change:

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Cash Flow Statement:
The financial statement of the organisation has been repented in the above figure,
which can be used by the investor’s for analysing the performance of the company. Yes, all
the users such as investors, potential investors, lenders and other creditors can use the

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financial report presented by the company. The financial report represents all the relevant
information regarding the revenues, expenses, assets and liabilities conducted during the
fiscal year. This information can be used and evaluated by the investors and other users for
detecting the financial position and understanding whether the company can obtain
sustainable growth in future (DesJardins and McCall 2014).
Indicating whether basic knowledge is enough to analyse the company:
The financial report of the organisation provides variety of information, which can be
evaluated by the investors with basic accounting knowledge. The companies also need to
provide the financial report in simple format for supporting Understandability Characteristics.
Hence, the financial report can be evaluated and analysed by investor’s having basic
knowledge of accounts. However, specific terms such as financial risk management, and
transaction related to foreign currency needs appropriate knowledge, which is far more that
the basic understanding of accounting. Therefore, higher degree of accounting knowledge is
needed by the investors for understating the financial risk position of the company. Hence,
the investors can take help from analyst of the annual report to detect the investment
prospects in the company and take adequate decision regarding the investment opportunity
(Hoque 2018).
Stating whether General Purpose Financial Reporting is met by the company:
The organisation has adequately complied with the General Purpose Financial
Reporting, as they have disclosed income statement, balance sheet statement, cash flow
statement, and statement of changes in equity. This disclosure indicates that the company has
followed the rules and regulations of the General Purpose Financial Reporting system, while
preparing the financial report, as adequate disclosure and notes to financial statements have
been provided in the annual report. The useful information that aids the investors in making

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investment decisions are provided in the annual report of the organisation (Schaltegger and
Burritt 2017).
Conclusion:
The assessment has evaluated the annual report of Argonaut Resources NL, where it
has been detected that the company follows all the relevant AASB standards in preparing the
financial statement. Moreover, adequate analysis has been conducted, where the company is
found to have provided all the relevant information in their annual report, which can help the
investors in making their investment decisions. Argonaut Resources NL has followed all the
guidelines of the conceptual framework, General Purpose Financial Reporting system and
AASB in preparing the annual report.