Computershare Limited's Compliance with AASB Framework Obligations

This report provides a detailed analysis and evaluation of Computershare Limited's compliance with the Australian Accounting Standards Board (AASB) conceptual framework. It examines whether Computershare Limited meets the objectives of general-purpose financial reporting, including providing users with necessary information about economic resources, financial performance, and changes in financial position. The report assesses if the target audience can adequately use the company's financial reports and if the company satisfies the recognition criteria for financial elements like assets, liabilities, equity, revenue, and expenses. Furthermore, it evaluates the presence of fundamental (relevance and faithful representation) and enhancing (comparability, verifiability, timeliness, and understandability) qualitative characteristics in Computershare Limited's financial reporting practices, concluding that the company adheres to AASB standards, avoiding accounting issues.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
Name of the Student
Name of the University
Author’s Note

1CONTEMPORARY ISSUES IN ACCOUNTING
Abstract
This report tests the compliance of Computershare Limited with the AASB conceptual
framework. The analysis and evaluation part of the report shows that Computershare Limited
follows all the requirements of AASB conceptual framework.

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Table of Contents
Introduction......................................................................................................................................3
Conceptual Framework Objectives..................................................................................................3
Target Audience...............................................................................................................................8
Recognition Criteria.........................................................................................................................8
Fundamental Qualitative Characteristics.......................................................................................12
Enhancing Qualitative Characteristics...........................................................................................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

3CONTEMPORARY ISSUES IN ACCOUNTING
Introduction
The main aim of this report is to conduct an analysis and evaluation on different elements
and requirement of the accounting conceptual framework. In Australia, the Australian
Accounting Standard Board (AASB) has introduced a conceptual framework containing all the
necessary standards and principles of financial accounting with the help of International
Accounting Standard Board (IASB) (Conceptual Framework for Financial Reporting, 2018). It is
the responsibility of the Australian Security Exchange (ASX) listed business entities to follow
these standards and principles in their financial accounting process in order to avoid the
accounting issues. For the completion of this report, Computershare Limited is taken into
consideration. Founded in the year of 1978, Computershare Limited is a technological company
of Melbourne. One major reason of selecting this company is its inclusion in the ASX (Our
Story, 2018).
Conceptual Framework Objectives
The main aim of the introduction of conceptual framework is to make the companies
comply with its standards and principles. In this process, the AASB conceptual framework has
three major objectives. They are stated following:
1. The first objective is to provide the user with the necessary information about the
economic resources of the business entities so that they can determine the financial
position of those companies (Newberry, 2015).

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2. The second objective is to deliver the required information so that the users can
determine the financial performance of the business organizations (Tello, Hazelton and
Cummings, 2016).
3. The third objective is to deliver the necessary information about the change in financial
position of the business entities for the determination of change in financial performance
and position of them (Tello, Hazelton and Cummings 2016).
These are the major objectives of conceptual framework of AASB. Now, it is required to
determine whether Computershare Limited has complied with these objectives of not and it is
shown below:

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(Source: Annual Report 2017, 2018)
By referring the above figure, it can be observed that Computershare Limited releases all
the required information about the aspects like current assets, non-current assets, liabilities and
others so that it becomes helpful for the investors, creditors and other users in ascertaining the
financial standing of the company (Annual Report 2017, 2018).

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(Source: Annual Report 2017, 2018)
By referring the above figure, it can be said that Computershare Limited provides their
users with the necessary financial information about the financial performance related aspects
like revenue, expenses, profit and others. This information helps in determining the financial
performance of Computershare Limited (Annual Report 2017, 2018).

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(Source: Annual Report 2017, 2018)

8CONTEMPORARY ISSUES IN ACCOUNTING
(Source: Annual Report 2017, 2018)
By referring the above figures, it can be observed that Computershare Limited provides
the information related to the change in financial position like change in profit, change in equity
and others with the help of change in equity and cash flow statements. It helps the users is
ascertaining the change in financial performance and position of the company (Annual Report
2017, 2018).

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Moreover, the 2017 Annual Report of Computershare Limited states that the company
follows Corporations Act 2001, Australian Accounting Standard and AASB for the preparation
and presentation of their financial statements; and complies with IASB and International
Financial Reporting Standards (IFRS) in order to bring uniformity and transparency in the whole
financial reporting process (Annual Report 2017, 2018).
Target Audience
As per AASB, target audience is the users of financial information for different decision-
making purposes; they are investors, creditors, banks, government, tax authority and others
(Conceptual Framework for Financial Reporting, 2018). They take investment and other decision
based on the financial performance of the companies. From the earlier discussion, it can be seen
that Computershare Limited releases different financial statements like income statement,
statement of financial position, change in equity statement and cash flow statement for providing
the target audience with adequate information for the different purposes (Annual Report 2017,
2018). Thus, it can be mentioned that the target audience can gather adequate information from
the financial statements of Computershare Limited.
Recognition Criteria
It is an important aspect as it is necessary for the ASX listed companies to comply with
the criteria of AASB conceptual framework for the recognition of major financial items like
assets, liabilities, equity, revenue and expenses. While complying with these criteria, business
entities need to take into consideration all the financial information related to the recognition of
the above-mentioned elements. Moreover, they need to make sure that there is a faithful
representation of these financial phenomena as these are required for the correct recognition of

10CONTEMPORARY ISSUES IN ACCOUNTING
financial elements (Conceptual Framework for Financial Reporting, 2018). The following
discussion shows the level of compliance with these recognition criteria by Computershare
Limited.
Revenue: Fair value method is used in Computershare Limited for the recognition of revenue on
the consideration received or receivable as per AASB 118 (Revenue, 2018). The amount of
revenue is net of returns, volume rebates and trade discounts.
(Source: Annual Report 2017, 2018)
Expenses: Computershare Limited recognizes all of their expenses in the income statements at
the time of their occurrence as per the principle of AASB (Conceptual Framework for Financial
Reporting, 2018).
Equity: In Computershare Limited, ordinary share capital is considered as equity and they do
not bear any special terms or conditions that can affect the income of the company. While
recognizing equity, the company takes into consideration all the costs directly attributed towards
the issue of shares as per AASB 1004 (Contribution, 2018).

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(Source: Annual Report 2017, 2018)
Assets: Trade and other receivables are the current assets of the company and the recognition
process is done based on fair value and they are measured at amortized cost after the deduction
of provision and impairment as per AASB 9 (Financial Instruments, 2018).
(Source: Annual Report 2017, 2018))
For the recognition of property, plant and equipment, Computershare Limited follow
AASB 116 and measured them at historical cost value after considering accumulate depreciation
and impairment costs (Property, Plant and Equipment, 2018).
(Source: Annual Report 2017, 2018)
The company recognizes their goodwill in fair value and it is subject to impairment. Fair
value is used for the recognition of other intangible assets as per AASB 138 (Intangible Assets,
2018).