Contemporary Accounting Issues: A Detailed Analysis of Asaleo Care

This report provides an analysis of Asaleo Care's annual report, focusing on contemporary issues in accounting and financial reporting. It examines the company's compliance with the conceptual framework, including fundamental and enhancing qualitative characteristics such as true and fair representation, relevance, comparability, understandability, and verifiability. The report assesses how the annual report enables stakeholders to make informed financial decisions, considering their knowledge of financial statements and the requirements of general-purpose financial reporting. It also references relevant accounting standards and research to support its analysis, highlighting Asaleo Care's adherence to AASB guidelines and its efforts to provide transparent and accountable information to its stakeholders.

CONTEMPORARY ISSUES
IN ACCOUNTING

Contents
Introduction................................................................................................................................2
Conceptual framework...............................................................................................................2
Compliance with fundamental qualitative characteristic...........................................................2
True and fair representation:..................................................................................................2
Relevance:..............................................................................................................................3
Compliance with enhancing qualitative characteristic:..............................................................3
Comparability:........................................................................................................................3
Understand ability:.................................................................................................................3
Verifiability:...........................................................................................................................3
Annual Reports enable the stakeholders to make the financial decisions..................................4
Knowledge of the users of the financial statements...................................................................5
Requirements of the general purpose financial reporting..........................................................6
References..................................................................................................................................9

Introduction
The financial reports are prepared by the corporations by following the various accounting
guidelines. It makes simple way for the corporation and the stakeholders of the company to
know the business of company. It also helps in making good decisions in respect of the
performance of corporation. In the report, the accounting process, guidelines of preparing the
accounting reports have been studied of Asaleo Care. The report focuses that whether the
relevant approaches have been followed by the corporation or how is it helping the
shareholders of the corporation.
Conceptual framework
The conceptual framework is a systematic tool with various alterations and frameworks. The
conceptual framework may be followed in various types of the effort where the complete
picture is required. This is used to create conceptual differences and manage concepts. The
conceptual framework is described as the ideas and objects that advances the business in the
direction of a set of norms in respect of making the good report. The Conceptual framework
provides the relevant guidelines to every company to prepare the reliable and relevant related
report so that it became simple for the shareholders of an organisation to have the knowledge
of the annual report of corporation and relate it with the challengers or other companies to get
the final decision. In respect of Asaleo care, it is evaluated that the annual report of this
corporation has made as per the conceptual framework. Asaleo care has followed guidelines
and accounting standards to recognise and evaluate the financial performance of the
organisation. The corporation has followed the AASB rules while preparing the financial
statement of the company. It is found that the whole presentation factors of organisation are
contented. These factors will help the business to enhance the whole performance in
marketplace (Garrett, Hoitash and Prawitt, 2014).
Compliance with fundamental qualitative characteristic:
As per study, it is evaluated that following are the characteristics and the compliance in the
company-
True and fair representation:

The true and fair representation states that in the annual report of company, the financial
performance and non-financial performance should be stated with evidence for the faithful
representation in front of the stakeholders (Parker, Guthrie, and Linacre, 2011). The data and
information of the company should be analysed and presented in the annual report of the
company. In respect of the Asaleo Care, it is analysed that all the new assignments, different
procedures and modifications in the corporations have been defined in the company’s annual
report in brief (Elad, 2016).
Relevance:
Relevant information are very useful to affect decision of the shareholders of the company.
The annual report of Asaleo care states that the recording has stated in good manner by the
organisation in the annual report of company so that good decision can take by the
shareholders of the company. It is stated in annual report that all the relevant data for the
shareholders have defined appropriately by the administrators in the company’s annual report
(Deegan, 2014).
Compliance with enhancing qualitative characteristic:
Following are the enhancing characteristics of company in order to measure the conceptual
framework-
Comparability:
The comparable data stated in annual report creates it simple for the shareholders of the
company to understand the changes related to the business of company.
Understand ability:
Further, the level of understandability for the business is also required to be discussed.
According to the study, it is identified that all the data has properly described in the annual
report of the company so that the confidence level of shareholders can be increased in the
report and the company.
Verifiability:

Verifiability makes sure that all the details of the business have been truly stated and it has
been authorised by the company. In the case of Asaleo Care, it is found that all the
information of the corporation have been authorised before stating it into the annual report of
the corporation (Loftus, et. al, 2015).
Annual Reports enable the stakeholders to make the financial
decisions
(Source: Asaleo Care, 2017)
The above image depicts a glimpse of the annual report of the company Asaleo Care. The
annual report comprises of the financial highlights, company overview, directors’ report,
report on the sustainability activities of the company, remuneration report, financial report,
auditor’s report and other matters. Thus, report is a comprehensive and detailed presentation
of the activities carried out by the company in a financial year. In addition to this, the report
presents the financial figures in comparison with the past year performances, as required by

the conceptual framework laid down by the AASB. This enables the stakeholders to assess
the growth or the fall down in the figures, accordingly they can make their decisions.
The financial reports are prepared by the corporations by following the various accounting
principles, recognition criteria as referred for the assets, liabilities, incomes, and expenses. In
addition, the notes to accounts have been provided to aid the users to make decisions in
respect to transactions that are not the part of the financial statements, but are necessary to
make the informed judgements. The notes to accounts enable the users to gain the knowledge
of the material agreements entered into by the directors on behalf of the company, the
material changes that have taken after the preparation of the financial statements and before
the annual report, extraordinary items like the contingent liabilities and many more
information. These are at times required by the various regulators itself to be presented as
part of the incidental information to the financial statements. Thus, it can be stated that the
annual report of the entity Asaleo Care are detailed enough to enable and assist the
stakeholders to make financing, investing and regulatory decisions.
Knowledge of the users of the financial statements
The numbers as represented in the financial statements do not provide the complete picture of
the business transactions and overall financial viability of the company (Deloitte, 2018). The
same must be aided with the incidental information. These will enable them to analyse the
information presented. For instance, the notes and additional disclosures are an integral part
of the financial statements of the public reporting entities. The aim behind the same is to aid
the insufficient compliance requirements of some of the accounting standards, thereby
enabling the users to understand the impact of the particular transactions, events or conditions
in a better manner. Thus, the users can have the basic knowledge of the accounting
framework, but the entities must exercise their best judgements and practices to provide a
comprehensive picture of the business operations.
Requirements of the general purpose financial reporting

The basic objectives of the general purpose financial reporting framework, as prescribed by
the Australian Accounting Research Foundation, is to communicate the relevant and reliable
information to the users, of the operations of the entity. Thus, another objective of the general
purpose financial reporting is to provide a mechanism to the management of the company to
discharge their duties of accountability towards the various stakeholders. While there are a
number of the users of the financial information, every user seeks different kind of
information to assist in their decision making. Some of the main stakeholders of the entity
Asaleo Care are shareholders, employees, customers, consumers, and other stakeholders. As
the annual report comprises of the various information, it is aimed at addressing the various
stakeholders. Some of the glimpses of the information presented in the annual report have
been provided below. These show that the conceptual framework have been complied with
and the basic objectives of the general financial reporting framework have been achieved by
the entity Asaleo Care.
(Source: Asaleo Care, 2017)

The above image is aimed at describing the safety performance and the level of working
conditions for the workforce at Asaleo Care.
The above image is aimed at describing the sustainability reporting practices in the enterprise
as required by the ASX principles.

One of the objectives of the general purpose financial reporting is also to ensure
comparability of the financial statements of the previous periods, as stated by the AASB 101
(AASB, 2015). The above image presents the comparative data on the financial performance
of the entity for the financial years 2017 and 2016. Thus, it can be stated that the annual
report of the entity Asaleo Care have been prepared taking into consideration of the
objectives of the general purpose financial reporting, that is mainly to provide transparency
and accountability in the information and assist the various kinds of users to gain relevant
information.

References
Asaleo Care (2017) Annual Report 2017. [online] Available from:
http://fy2017.asaleocare.com/library/report/asaleocare_annual_report_web.pdf [Accessed on
13 December 2018].
Australian Accounting Standards Board. (2015) Accounting Standard AASB 101. [online]
Available from: https://www.aasb.gov.au/admin/file/content105/c9/AASB101_07-15.pdf
[Accessed on 13 December 2018].
Australian Accounting Standards Board. (2015) Conceptual Framework for Financial
Reporting [online] Available from:
https://www.aasb.gov.au/admin/file/content105/c9/ACCED264_06-15.pdf [Accessed on 13
December 2018].
Deegan, C. M. (2014) Financial accounting theory, 4th ed., North Ryde, N.S.W: McGraw-
Hill Education (Australia) Pty Ltd.
Deloitte. (2018) Australian financial reporting guide. [online] Available from:
https://www2.deloitte.com/content/dam/Deloitte/au/Documents/audit/deloitte-au-audit-
australian-financial-reporting-guide-june-2018-220618.pdf [Accessed on 13 December
2018].
Elad, C. (2016) International Classification of Financial Reporting, Christopher W.
Nobes.Routledge, Abington, UK (2014),(160 pages,£ 95), ISBN: 0415736935.
Garrett, J., Hoitash, R., and Prawitt, D. F. (2014) Trust and financial reporting
quality. Journal of Accounting Research, 52(5), pp. 1087-1125.
Loftus, J., Luke, B., Leo, K. J., Boys, N., Daniliuc, S., Hong, A., and Byrnes, K. (2015)
Financial Reporting, 1st ed., Melbourne: Wiley.
Parker, L., Guthrie, J. and Linacre, S. (2011) The relationship between academic accounting
research and professional practice. Accounting, Auditing & Accountability Journal, 24(1), pp.
5-14.