Report on Contemporary Accounting Issues for Aeeris Limited: Analysis

This report provides an in-depth analysis of Aeeris Limited's financial reporting practices, focusing on its compliance with the conceptual framework for financial reporting. The report evaluates Aeeris Limited's adherence to measurement needs, including the use of historical cost and fair value, and assesses its conformity with both fundamental and enhancing qualitative characteristics, such as relevance, faithful representation, verifiability, comparability, understandability, and timeliness. Furthermore, it examines the ability of users to make informed decisions based on the company's financial statements, considering the information provided in the balance sheet, income statement, statement of changes in equity, and cash flow statement. The report concludes by assessing the knowledge required for company analysis and Aeeris Limited's compliance with the requirements for general purpose financial reporting, highlighting the overall effectiveness of the financial reporting process.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
Name of the Student:
Name of the University:
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Executive Summary:
The paper intends to analyse the different conceptual framework aspects in the context of Aeeris
Limited. The first section has evaluated the compliance of the organisation with the measurement
needs of the conceptual framework. The second section has emphasised on assessing the
conformity of the organisation to the qualitative characteristics of the framework. The next
section reflects the reliability of the financial statements of the organisation so that the users
could make sound decisions. Finally, the report has shed light on dissecting whether the users
require above the basic accounting knowledge in order to evaluate the financial reports of the
organisation.

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Table of Contents
Introduction:....................................................................................................................................3
Compliance with measurement needs of the conceptual framework:.............................................3
Compliance with the fundamental qualitative characteristics:........................................................6
Compliance with the enhancing qualitative characteristics:............................................................8
Ability of the users in using the report to undertake decisions:....................................................10
Knowledge required for company analysis:..................................................................................14
Compliance with the requirements for general purpose financial reporting:................................15
Conclusion:....................................................................................................................................15
References:....................................................................................................................................16

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Introduction:
All business organisations are needed to comply with the accounting regulations when
they carry out their financial reporting activities. In this way, it becomes possible to avoid issues
related to accounting and financial reporting in business operations. The situation is similar for
ASX listed organisations, since they require complying with the necessary guidelines of the
conceptual framework. In Australia, there is presence of conceptual framework for financial
reporting, which is provided on the part of IFRS and all organisations need to adhere to these
standards. The objective of this report is to assess the degree of adherence with various
accounting segments of the conceptual framework by Aeeris Limited, which is an ASX listed
organisation.
Compliance with measurement needs of the conceptual framework:
All organisations need to consider the measurement needs in their financial reporting
process in accordance with the conceptual framework and Aeeris Limited is needed to consider
the same as well. This framework mandates that all organisations are needed to report their assets
and liabilities by using two measurement bases, which include fair value and historical cost
(Macve 2015). The conceptual framework states that assets could be considered in the form of
resources, which are controlled by the business organisations and they form owing to the
historical events and future economic benefits. On the contrary, liabilities could be defined in the
form of current obligations for the organisations owing to historical events resulting in outflow
of resources (Aasb.gov.au 2018). Equity could be taken into account in the form of residual
interest in the assets of the organisation after all liabilities are deducted.

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Similarly, the organisations are required to consider the recognition of the components of
financial statements. The organisations need to consider two specific conditions when the
elements of the financial statements are recognised. Initially, they are required to be realised, if it
is likely that any future benefit related to the item would flow from the business organisation.
Secondly, these items require recognition, if they have a particular cost value that could be
gauged reliably (Abbott et al. 2016).
After evaluating the annual report of Aeeris Limited in 2018, the organisation has utilised
historical cost as well as fair value in order to gauge its assets and liabilities.

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As evident from the above figures, Aeeris Limited has used fair value as well as historical
cost to gauge its assets and liabilities depending on business needs. Under the historical cost
process, the organisation has gauged its assets and liabilities in a manner, which provides
monetary information regarding income, expenses, assets and liabilities during the transaction
events (Aasb.gov.au 2018). Conversely, in fair value, the organisation has gauged some of its
assets and liabilities depending on the present value providing monetary information at the date
of measurement.
However, Aeeris Limited needs to consider other aspects as well when selecting
measurement bases. One such factor is relevance, which could be observed from the annual
report of the organisation, as it has disclosed financial information for 2017 and 2018. Moreover,
it has adhered adequately to AASB, IFRS and Corporations Act 2001, which assure faithful
representation of its disclosed financial information.

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Compliance with the fundamental qualitative characteristics:
The conceptual framework states two fundamental qualitative characteristics, which are
described briefly as follows:
Relevance:
If the provided financial information is relevant, there would be positive effect on the
users in order to undertake decisions. Therefore, it is necessary both confirmatory and predictive
values are present in financial information (Francis et al. 2015). When the predictive values are
present, the users could estimate future outcome. From the annual report of Aeeris Limited in
2018, the users could be able to estimate its future performance by analysing its financial
performance in 2017 and 218 (Aeeris.com 2018).

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Moreover, there is confirmatory value in financial information when the users have the
ability to provide feedback regarding the past accounting incidents. As observed from the annual
report of Aeeris Limited in 2018, it is possible to obtain financial information for the users for
the previous year, which is 2017.
Faithful representation:
When the financial information is faithful, the users could undertake sound decisions. For
ensuring such faithful representation, the financial information needs to be neutral, error-free and
complete (Garrett, Hoitash and Prawitt 2014). In accordance with the latest annual report of
Aeeris Limited, adequate adherence is ensured with respect to IFRS, Corporations Act 2001 and
AASB. As these aspects are complied effectively, the financial information of the organisation is
represented faithfully.

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Compliance with the enhancing qualitative characteristics:
As per the conceptual framework, the financial information contains four enhancing
qualitative characteristics, which are discussed as follows:
Verifiability:
When this particular characteristic is present, the financial information users could use
their independent observations as well as their knowledge to arrive at a consensus (Gigler et al.
2014). Such verification could be either direct or indirect. As per the latest annual report of
Aeeris Limited, adequate disclosures have been made in the form of notes to the financial
statements. This has assisted the users in using their knowledge directly or indirectly for
verifying the accounting information of the organisation.
Comparability:
When this particular characteristic is present, it becomes easier for the users in
understanding and detecting the similarities and variations related to the various financial items
of the business organisations. As observed from the annual report Aeeris Limited in 2018, it has
disclosed all financial information for 2017 and 2018 in table formats. This has helped the users

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in contrasting the financial information of Aeeris Limited with other similar companies and
similar timeframes of the same organisation.
Understandability:
With the help of this characteristic, it assists the organisations in categorising and
representing financial information in a concise and clear manner for better understanding of the
users (Gomariz and Ballesta 2014). The annual report of Aeeris Limited states that all needed
financial information is disclosed in a simple format. Moreover, it has provided the necessary

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clarifications and justifications of the different accounting treatments to be disclosed in the form
of financial footnotes. These aspects have increased the understandability of the users.
Timeliness:
This characteristic assures the delivery of the needed financial information when useful
decisions are undertaken. The previous information is less effective at the time of undertaking
decisions. It could be observed that the organisation has provided required financial information
for the latest years 2017 and 2018.
Ability of the users in using the report to undertake decisions:
Before using the financial statements for undertaking decisions, it is necessary that they
need to conform to the significant objectives of conceptual framework. According to the first
objective, all ASX listed organisations are needed to deliver the users with necessary information
regarding economic resources and financial position, which could be found from the balance
sheet statements.

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The above table clearly indicates the disclosure of such information from Aeeris Limited
in its 2018 annual report as balance sheet statement.
The next conceptual framework objective needs the organisations to disclose information
regarding the changes in their financial performance and economic resources.