Report on Contemporary Accounting Issues: Anchor Resources Limited

This report provides an in-depth analysis of contemporary issues in accounting, specifically focusing on how an ASX-listed organization, Anchor Resources Limited, conforms to the guidelines of the conceptual framework for financial reporting. The report examines the company's adherence to measurement requirements, fundamental and enhancing qualitative characteristics, and general-purpose financial reporting requirements. It explores how the company utilizes different measurement bases for assets and liabilities, ensuring relevance and faithful representation in its financial statements. The report also assesses the ability of financial statement users to make informed decisions based on the information provided, including the availability of financial statements like income statements, cash flow statements, and statements of changes in equity. The conclusion highlights that Anchor Resources Limited adheres to the conceptual framework by employing a mix of historical cost and fair value methods and disclosing all necessary financial statements to facilitate informed decision-making by investors and creditors.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
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Executive Summary:
For this report, the conformance of an ASX listed organisation with the different needs of the
conceptual framework is taken into consideration. More specifically, Anchor Resources Limited
is considered for this report, which is a leading mineral explorer having expanded portfolio of
highly prospective projects across Queensland and New South Wales (NSW) in Australia. The
organisation has assured conformance to the various qualitative characteristics of the conceptual
framework, which include fundamental qualitative characteristics and enhancing qualitative
characteristics. Moreover, by adhering to the needs of the general purpose financial reporting,
Anchor Resources Limited has disclosed all needed financial statements like the income
statement, cash flow statement, statement of change in equity and cash flow statement.

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Table of Contents
Introduction:....................................................................................................................................3
1. Conformance to measurement requirements:..............................................................................3
2. Conformance to fundamental qualitative characteristics:............................................................6
3. Conformance to enhancing qualitative characteristics:...............................................................9
4. Ability of the users of the financial reports in using the statements for decision-making:.......12
5. Needed basic knowledge of accounting:...................................................................................13
6. General purpose financial reporting requirements:...................................................................13
Conclusion:....................................................................................................................................14
References:....................................................................................................................................15

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Introduction:
The conceptual framework for financial reporting provides the organisations with the
necessary guidelines, principles and standards so that the financial statements could be presented
and prepared accurately. The reason is to assist the users in extracting the necessary information
about the organisations in order to undertake decisions (Beattie 2014). For this report, the
conformance of an ASX listed organisation with the different needs of the conceptual framework
is taken into consideration. More specifically, Anchor Resources Limited is considered for this
report, which is a leading mineral explorer having expanded portfolio of highly prospective
projects across Queensland and New South Wales (NSW) in Australia (Anchorresources.com
2018). Various aspects are taken into account in this paper and they include the requirements for
general purpose financial reporting, measurement needs associated with the conceptual
framework, knowledge needs for analysing the financial statements and qualitative features
related to financial reporting.
1. Conformance to measurement requirements:
In accordance with IASB, measurement could be deemed as the method of ascertaining
the amounts, which are needed to be incorporated in the financial statements of the organisations.
Therefore, the measurement of liabilities and assets has direct effect on the realisation of
expenses and income as well as profit. Based on the IASB conceptual framework, the business
organisations need not adopt a single mechanism of measurement in order to gauge their
liabilities and assets. This is because the implementation of a single approach in relation to assets
and liabilities does not provide pertinent information for undertaking decisions (Aasb.gov.au
2018). Moreover, according to the framework, assets and liabilities could be gauged by using

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four available measurement bases. They constitute of realisable value method, current cost
method, fair value method and historical cost method. The below discussion reflects the extent of
conformance of Anchor Resources Limited with the measurement needs of IASB.
By using the above statement, it is apparent that Anchor Resources Limited has not
followed only one measurement approach for various aspects of the financial statements. This is
because the organisation has utilised fair value approach as well as historical cost method for
measuring its assets and liabilities. Evidences in relation to this conformance could be found
from the below discussion:

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The above extracts from the annual report of Anchor Resources Limited provide
evidences that the organisation has conformed to the basic requirements of the conceptual
framework mentioned in IASB, which is avoiding the adoption of only one measurement
approach for business assets and liabilities. It could be witnessed that Anchor Resources Limited
has implement historical cost method as well as fair value approach for gauging various assets
and liabilities so that the users could be provided with relevant financial information regarding
its asset and liability position (Hotcopper.com.au 2018).

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2. Conformance to fundamental qualitative characteristics:
Anchor Resources Limited has to conform to two fundamental qualitative characteristics
mentioned in the conceptual framework for financial reporting and they are demonstrated briefly
as follows:
Relevance:
When the decisions of the users are impacted with regards to distribution of scarce
resources, financial information is adjudged to be relevant. Along with this, the pertinent
information has the capability of bringing favourable variations in the decision-making process.
Due to this, there must be presence of confirmatory value and predictive value in financial
information. When predictive value is present, it becomes easy for the users to make estimates.
On the other hand, when confirmatory value is present, the users could seek the feedback of the
past analyses (Cheng et al. 2014).
With reference to the above extract, Anchor Resources Limited has disclosed necessary
information regarding revenue for the existing period and this could be utilised by the users as a
base for estimation of revenue in the upcoming years. In addition, it becomes possible for the
users to contrast such information with revenue estimation in the existing year based on the
previous outcomes. The users could enhance accurately the processes by using the comparison
results.

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Faithful representation:
The financial information of the organisations need not contain errors and it needs ro
complete and neutral for assuring faithful representation (Díaz et al. 2015).
From the above extract, it is evident that property, plant and equipment have been taken
into account as an instance. It could be observed that Anchor Resources Limited has given

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derailed overview of the selected asset and its supporting assumptions as well as the overall
numerical explanation of the asset.
As per the above extract, BDJ Partners, the auditor of Anchor Resources Limited, has
affirmed that the financial reports do not contain material misstatements. By taking into
consideration all the above-mentioned aspects, the financial statements of Anchor Resources
Limited are said to be faithfully represented.

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3. Conformance to enhancing qualitative characteristics:
There are four enhancing qualitative characteristics that need to be considered by the
ASX listed organisations and they include comparability, verifiability, timeliness and
understandability.
Comparability:
The financial information of the organisations tends to be more beneficial at the time they
could be contrasted with identical information about the other organisations and with same
information of the organisation for other accounting periods (Henderson et al. 2015).

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The above extracts help in providing evidences that the financial statements of Anchor
Resources Limited could be contrasted with similar sets of financial information of another
organisation operating in the same sector. Along with this, the organisation is involved in
providing financial information of the past year in the existing annual report so that the financial
information of the organisation could be compared with another financial year.
Verifiability:

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Verifiability implies the capability, which ensures that the depicted information is
provided in accordance with the selected measurement technique so that the errors or bias could
be eliminated (Karadag 2015). From the annual report of Anchor Resources Limited in 2018, the
organisation has provided the needed judgements as well as assumptions so that the financial
statements could be developed and represented.
In accordance with the above image, impairment could be taken into account as an
instance, in which the organisation has disclosed the needed estimates and assumptions for
impairment.
Timeliness: