Evaluation of Australian Accounting Standards in Annual Reports

This report provides a comparative analysis of the annual reports of BWX Limited and Blackmore Limited, focusing on their compliance with the standards set by the Australian Accounting Standards Board (AASB). The report examines the application of International Financial Reporting Standards (IFRS) and AASB in the companies' financial statements, evaluating their adherence to the conceptual framework. It assesses the companies' financial positions and performances, including the recognition and measurement decisions. The report highlights the differences in disclosures between the two companies, with BWX Limited demonstrating greater transparency in its financial reporting. Recommendations are provided to improve the disclosure of standards. The conclusion emphasizes the importance of AASB compliance in ensuring the legitimacy and quality of financial reports, ultimately protecting the interests of stakeholders. Desklib is a platform which provides all the necessary AI based study tools for students.

Accounting 1
Contemporary Issues in Accounting

Accounting 2
Executive Summary
The basic purpose lies behind the designing of this report is to compare the annual reports of two
different companies of Australia and their compliance with the standards prescribed by the
Australian Accounting Standards Board. These two companies are Blackmore Limited and BWX
limited. This report shows the compliance of standards that are laid by the AASB by both the
companies in the preparation of their respective financial accounts in their annual reports. The
findings of the report reveal that IFRS and IASB standards are met out in the preparation of
financial reports by the company. The findings also reveal that the company BWX Limited has
more fairly complied with the accounting standards than the Blackmore Company. Protecting
and promoting the interest of different stakeholders is the main motive behind the application of
these standards.
BWX Company has clearly disclosed about the compilation with AASB standards in its annual
reports. Apart from this, the company has used the revised version of accounting standards in
order to improve the quality of its annual reports. Blackmore Company has also compiled with
the standards laid by AASB but the company fails in disclosing it in its annual reports.

Accounting 3
Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Evaluated the conceptual framework with reference to the both companies annual report............5
Annual report of both companies Blackmore and BWX.................................................................6
Role of revise conceptual framework in addressing the disparity in corporate reporting:........12
Analyzing the financial position perspective and financial performance of the recognition or
measurement decision for Blackmore Ltd and BWX Ltd.........................................................13
Clarification in the Directors Report and in the Notes to Financial Statements............................14
Compare and contrast of the two annual reports, identify the differences in disclosures of these14
Recommendations:........................................................................................................................16
Conclusion:....................................................................................................................................17
References:....................................................................................................................................18

Accounting 4
Introduction
The main purpose lies with the preparation of this report is to create the knowledge about the
various standards that are used in the preparation of final accounts by the company. Every
company is required to comply with the standards and regulations of the country in which the
company is registered in stock exchange during the preparation of final accounts. Two different
Australian companies BWX Limited and Blackmore Limited are chosen for this purpose.
Compilation with the accounting standards in the preparation of final accounts by the companies
are evaluated in this report. The annual reports of both the companies are compared to find out
deviations and reasons that can be held responsible for the deviations are evaluated.

Accounting 5
Evaluated the conceptual framework with reference to the both companies annual report
The basic aim of the accounting standards is to regulate the practices relating to the accounting
and financial reports of the firms. IASB standards and requirements laid by IFRS are compiled
by both the organizations in preparing their final reports (Burton and Jermakowicz, 2015).
Various standards are developed by the ASSB which are required to be complies by the
companies in preparing final accounts. Conceptualized framework is provided at the initial stage
by IFRS that is required to assist in preparation of financial accounts and considering the various
aspects of the financial statements.
The determination of assets must be proper and the annual reports must contains the economic
profits that can be earned through the selling of assets should be done on the basis of IFRS.
Along with it, determining of assets over the business should be in accordance with the IFRS
standards. Assets of a company are required to be considered in final reports according to the
ASSB. Current assets and noncurrent assets are two categories of assets. Noncurrent assets refer
to those assets which have life expectancy of more than 1 year in business (Ltd, 2015). Examples
of noncurrent assets are machinery, plants. Examples of current assets are cash and cash
equivalents.
Financial reports of a company comprise of all the assets on the basis of AASB requirements and
IFRS principles. Balance sheet of both the companies shows the records of assets and liabilities
records. Assembling of IFRS and AASB has been done by the organizations in order to
determine the liabilities. Both the companies have compiled with the AASB requirements in
order to prepare final accounts (Kellaghan and Stufflebeam, 2012). The accounting standards
prescribed by the AASB and IASB have been followed by the organizations in order to prepare
final accounts.

Accounting 6
Annual report of both companies Blackmore and BWX
AASB standards are important and they form the primary basis for accounting principles in case
of financial reports. Accounting standards refer to the procedure of operating, acknowledging,
presenting, disclosing and measuring financial statement (Henderson et al., 2015). Serving
financial information to different stakeholders is the main motive of accounting standards.
Australian Accounting Standard Board is also referred as Australian Government agency, which
aims at sustaining and improving the standards of financial reports for individuals, and both
sectors. Setting the principles in order to govern the market of Australian securities is the basic
aim of ASSB. In order to develop and analyze the accounting standards, ASSB has developed
conceptual framework.
Analysis of reports of both companies reveals that both companies have compiled with the
AASB standards (Deegan, 2014). Screenshot of balance sheet and income has been provided in
order to present them as evidence.
Annual report of BWX Limited and Blackmore Limited
Income Statements of Blackmore Limited:
The income statement for the period of 2015-16 of BWX Limited is shown in the form of images
below:

Accounting 7

Accounting 8
Balance sheet of Blackmore Limited:
The balance sheet for the period of 2015-16 of BWX Limited is shown in the form of images
below:

Accounting 9

Accounting 10
(Source: Blackmore Ltd, 2016)
Income Statements of BWX Limited:
The income statement for the period of 2015-16 of Blackmore Limited is shown in the form of
images below:

Accounting 11
Balance sheet of BWX Limited:
The balance sheet for the period of 2015-16 of Blackmore Limited is shown in the form of
images below:

Accounting 12
(Source: BWX Ltd, 2016)
Role of revised conceptual framework in addressing the disparity in corporate reporting:
According to chapter 1 and 3 of “IASB Conceptual Framework for Financial Reporting”
published in the month of September 2010, AASB has revised its framework in order to improve
the preparation and presentation of final accounts (Birt, et al., 2012). The conceptual framework