Analysis of Contemporary Accounting Issues: Boral Limited Report

This report provides an in-depth analysis of Boral Limited's financial reporting practices, focusing on its adherence to the Australian Accounting Standards Board (AASB) conceptual framework. The report begins with an executive summary and table of contents, followed by an introduction that outlines the report's objectives and scope. It examines Boral Limited's compliance with the objectives of general-purpose financial reporting, including the presentation of financial information to assess financial position, performance, and changes in financial position. The report then assesses the company's compliance with the recognition criteria for assets, liabilities, equity, revenue, and expenses, as defined by the AASB. Furthermore, the report analyzes the qualitative characteristics of Boral Limited's financial information, including fundamental and enhancing characteristics like relevance, faithful representation, verifiability, comparability, understandability, and timeliness. The analysis is supported by figures and data from Boral Limited's 2017 annual report. The report concludes that Boral Limited effectively complies with the AASB framework, offering recommendations for maintaining this compliance, and ensuring accurate financial reporting.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
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Executive Summary:
Based on the evaluation of the report, it is inherent that Boral Limited has conformed
to the required guidelines and norms, as stated in the conceptual framework of AASB. The
conformance could be seen in terms of disclosure of the financial statements containing all
the useful information for assisting the users in undertaking decisions. Finally, it has been
analysed that Boral Limited has adhered to the various objectives of the conceptual
framework, criteria for recognition and qualitative characteristics depicted under the
conceptual framework of AASB.

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Table of Contents
1. Introduction:...........................................................................................................................3
2. Objectives of general purpose financial reporting:................................................................3
3. Recognition criteria of conceptual framework:......................................................................7
4. Qualitative characteristics of conceptual framework:..........................................................12
5. Conclusion and recommendations:......................................................................................13
References:...............................................................................................................................14

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1. Introduction:
The intention of this report is to take into account the significant conceptual
framework aspects for business organisations having headquarters in Australia. In order to fit
such intention, Boral Limited is selected as the firm, which is a multinational organisation
involved in supplying and producing construction and building materials. Despite its base in
Australia, the organisation has widespread global operations in USA and Asian nations
(Boral.com 2018). The paper would be distributed into three different segments. The primary
focal area would be to assess the objectives of general purpose financial reporting from the
perspective of Boral Limited. In addition, the second segment of the paper would assess the
compliance of the organisation with the recognition criteria related to conceptual framework.
Finally, the report would shed light on emphasising the qualitative features of conceptual
framework with respect to the financial information disclosed by Boral Limited.
2. Objectives of general purpose financial reporting:
The “Australian Accounting Standards Board (AASB)” has formulated conceptual
framework, which provides the organisations with the necessary regulations and standards in
relation to financial reporting. The organisations need to be responsible for conforming to
such standards and regulations, as set out in the conceptual framework of AASB
(Aasb.gov.au 2018). The situation could be applied for Boral Limited and the conceptual
framework of AASB has three main objectives, which would be evaluated in the following
decision:
First objective:
This conceptual framework objective states the financial reports of the organisations
need to have information, which would enable the users of the financial statements in

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analysing their existing financial conditions. The main users of the organisation include
owners, managers and shareholders as the internal users, while the external users are
suppliers, creditors, government, community, customers and public (Huber 2017). This
denotes that certain necessary information regarding assets, liabilities and equity need to be
included in the financial statements. From the annual report of Boral Limited in 2017, the
organisation has published its balance sheet statement having the vital information of assets,
liabilities and equity. This is shown as follows:

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Second objective:
Another objective of general purpose financial reporting is to ensure that the business
organisations are responsible for publishing all information to their users so that they could
judge about the financial performance of the organisations. Such information includes
revenue, income, expenses and loss. In accordance with the annual report of Boral Limited in
2017, it could be seen that the organisation has published its income statement and this
statement possesses all information about above-mentioned aspects. This would help the
investors and other users to understand the financial performance of the organisation in a
better manner, which is evident from the following table:

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Third objective:
The general purpose financial reporting has mandated the need for all business
organisations to deliver important information to their users so that any change in financial
condition could be identified by comparing with that of the previous year. This is because it
would assist them in anticipating the likely performance of the organisations in future
(Brigham et al. 2016). From the latest annual report of Boral Limited, it could be seen that
the organisation has published statement of change in equity and cash flow statement, which
reveal the changes in its cash position and financial performance over the years. Such
procedure enables the investors as well as the other users to obtain an overview of any change
in financial condition of Boral Limited. This is inherent from the following two figures:

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3. Recognition criteria of conceptual framework:
Certain criteria are laid out in the AASB conceptual framework in order to facilitate
the recognition of equity, assets, expenses, liabilities and revenue. All Australian entities have
to comply with these criteria so that the financial aspects mentioned above could be

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recognised. The aspects are not exceptions for Boral Limited and the evidences of these
aspects in the context of the organisation could be discussed as follows:
Assets:
Boral Limited has different types of assets and the conceptual framework has made it
mandatory for the management of the organisation to comply with the rules and policies
mentioned in “AASB 116 Property, Plant and Equipment” falling under “Section 334 of the
Corporations Act 2001”. In case of Boral Limited, this asset is measured at historical cost
after deducting impairment losses and accumulated depreciation charges and it follows the
straight line method of depreciation.
Boral Limited has to comply with “AASB 102 Inventories”, as mandated by the
AASB conceptual framework in order to recognise its inventories. The organisation

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recognises its inventories at either net realisable value or cost, whichever is lower
(Boral.com.au 2018).
Finally, it needs to adhere to the norms laid down in “AASB 138 Intangible Assets”
for measuring or recognising its intangible assets (Cheng et al. 2014). The intangible assets of
Boral Limited are gauged at cost after impairment losses and accumulated depreciation are
deducted.
Liabilities:
In accordance with the conceptual framework regulations, Boral Limited is
responsible to adhere to “AASB 132 Presentation of Financial Instruments” in order to
recognise its business borrowings. The latest annual report of the organisation states that
borrowings are gauged at fair value from which transaction costs are deducted.

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Another significant liability is provision and all the organisations are liable to
conform to the norms mentioned under “AASB 137 Provisions, Contingent Liabilities and
Contingent Assets” to recognise the same (Gomariz and Ballesta 2014). The annual report of
Boral Limited in 2017 makes it evident that provisions are considered at the time of presence
of any existing obligation because of past event.
Finally, according to AASB regulations, it is necessary for the business organisations
to maintain the guidelines mentioned under “AASB 16 Leases” (Henderson et al. 2015).
Boral Limited has adhered to these guidelines as well evident from its annual report.
Equity: