Boral Limited's Financial Reporting Under Conceptual Framework

This report examines Boral Limited's adherence to the AASB and IASB conceptual framework in its financial reporting practices. It assesses the company's alignment with the objectives of the framework, including the presentation of financial performance, position, and changes in financial condition. The report further evaluates Boral Limited's recognition criteria for assets, liabilities, equity, revenue, and expenses, ensuring compliance with relevant accounting standards. Finally, it analyzes the presence of fundamental and enhancing qualitative characteristics within Boral Limited's financial statements, confirming the reliability, relevance, verifiability, comparability, timeliness, and understandability of its reported financial information. The analysis confirms that Boral Limited effectively complies with the guidelines and principles of the conceptual framework.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
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1CONTEMPORARY ISSUES IN ACCOUNTING
Abstract:
The goal of this report is to present the different aspects laid out in the conceptual
framework and therefore, Boral Limited is taken into consideration. Boral Limited is an
Australian multinational corporation, which is involved in producing and supplying construction
and building materials having operations in US and Asian nations and it is listed under ASX 100.
Boral Limited has complied with all the objectives, which are mentioned under the reporting of
conceptual framework. Along with this, it has been evaluated that the organisation has followed
the criteria of recognition that includes assets, liabilities, equity, revenue and expenses. Finally, it
has been dissected that Boral Limited contains all the necessary enhancing and fundamental
qualitative characteristics laid down in the conceptual framework for developing the financial
statements.

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Table of Contents
1. Introduction:................................................................................................................................3
2. Objectives of the conceptual framework:....................................................................................3
3. Recognition criteria of the conceptual framework:.....................................................................7
3.1 Assets:....................................................................................................................................8
3.2 Liabilities:............................................................................................................................10
3.3 Equity:..................................................................................................................................11
3.4 Revenue:..............................................................................................................................12
3.5 Expenses:.............................................................................................................................12
4. Fundamental qualitative characteristics of the conceptual framework:.....................................13
5. Enhancing qualitative characteristics of the conceptual framework:........................................13
6. Conclusion:................................................................................................................................15
References:....................................................................................................................................16

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1. Introduction:
In the current competitive landscape, various issues confront the corporate firms when
they conduct their business operations. More specifically, the accounting-related issues are
inherent, since many organisations fail to adhere to the regulations and guidelines stated in the
conceptual framework. In order to meet the needs of the conceptual framework, the preparation
and disclosure of the financial statements need to be made appropriately. The main issuers of this
framework include “Australian Accounting Standard Board (AASB)” and “International
Accounting Standard Board (IASB)” through which it is possible for the firms to obtain an
overview of the requirements and guidelines required to prepare and reveal their financial reports
(Azam 2017).
The goal of this report is to present the different aspects laid out in the conceptual
framework and therefore, Boral Limited is taken into consideration. Boral Limited is an
Australian multinational corporation, which is involved in producing and supplying construction
and building materials having operations in US and Asian nations and it is listed under ASX 100
(Boral.com 2018).
2. Objectives of the conceptual framework:
For Boral Limited, it is important to satisfy three objectives of the proposed conceptual
framework of IASB and AASB that would help in preparing and revealing its financial reports.
The brief description of these objectives in the context of Boral Limited are analysed as follows:
Financial performance of the business:

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This objective mandates the need for the organisations in revealing their financial
performance by presenting the income made and amount spent in the form of expenses. The
income statement of the business entities helps in revealing such information to their users
(Baker and Burlaud 2015). It could be observed that Boral Limited has made the necessary
disclosures in its income statement supported additionally by the financial statement notes. As
per the latest annual report of Boral Limited, its income statement is illustrated as follows:
Financial position of the business:

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This objective clearly highlights the fact that the economic resources of a business entity
are to be disclosed to the users for portraying the actual financial position concerning the
business operations. The balance sheet statement of an entity helps in providing such information
to the users (Barker et al. 2014). The annual report of Boral Limited clearly provides a
description of all the economic resources, which could be identified from its statement of
financial position.
Changes in the financial condition of the business:
This objective necessitates the need for the organisation to pass information to the users
about the changes in the financial condition so that the latter could undertake significant

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decisions. These changes could be identified from the cash flow statement and statement of
changes in owners’ equity (Barth 2015). Boral Limited has presented both the statements in its
annual report, which are illustrated as follows:

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3. Recognition criteria of the conceptual framework:
Boral Limited has to meet certain recognition criteria in relation to different financial
components like liabilities, assets, equity, revenue and expense apart from the conceptual
framework objectives. For adhering to AASB and IASB, it is necessary to take into account
different aspects when the financial statements are recognised. At the time of recognition, it is
mandatory for Boral Limited to consider financial information of the distinct components like
assets, liabilities and others (Barth 2018). Moreover, it is necessary for the accountants of the

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business entities to ensure recognition of those aspects having association with rightful
representation of the financial elements. Finally, it is required for the organisations to undertake
cost-benefit analysis of the financial components.
The principles of AASB and IASB are to be followed for fulfilling these criteria. It could
be identified by discussing the recognition criteria in the context of Boral Limited, which are
explained as follows:
3.1 Assets:
As Boral Limited is involved in operating in the Australian construction industry, the
primary fixed assets of the organisation include property, plant and equipment. Property, plant
and equipment is realised at cost minus accumulated depreciation and impairment, which could
be linked with “Section 334 of the Corporations Act 2001” and “AASB 116 Property, Plant and
Equipment”.

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The initial recognition of trade and other receivables is made at the issued invoice value
and at the amount considered recoverable from the customers (cost of amortisation using the
method of effective rate of interest). In addition, Boral Limited has created an allowance for
doubt debts for the anticipated irrecoverable trade amounts.
In case of Boral Limited, the recognition of inventory is made at lower of net realisable
value or cost in accordance with the guidelines of “AASB 102 Inventories”.

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3.2 Liabilities:
Boral Limited realises provisions in its balance sheet statement, if the following three
conditions are satisfied:
 There is a present obligation due to previous event
 The obligation amount could be gauged reliably
 There is likelihood that the economic benefit outflow would be needed for settling
obligation (Craig, Smieliauskas and Amernic 2017)

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The realisation of loans and borrowings is made initially at fair value minus attributed
transaction costs, in which they are stated at amortised cost.
3.3 Equity:
In case of Boral Limited, ordinary shares are considered in the form or equity and they
are paid wholly with no par value, having one vote per share and the dividend rights. Thus, it
complies with the requirements of “AASB 1004”.