Report on Contemporary Issues in Accounting for CTI and KS Group

This report analyzes contemporary accounting issues, focusing on the conceptual framework and financial reporting of CTI Logistics and K&S Corporation. It examines the principle of prudence, advantages and disadvantages of financial reporting, and the general purpose of financial reports according to the AASB framework. The report includes an analysis of AGM reports, shareholder perspectives, and directors' reports for both companies. It also covers financial performance, including assets, tangible and intangible assets, dividends, and revenue. The analysis provides recommendations for CTI Logistics to enhance financial performance and improve shareholder returns. The report provides a comprehensive overview of the financial positions and performance of the two companies, highlighting key aspects such as financial statements, governance structures, and operational strategies.

Running head: CONTEMPORARY ISSES IN ACCOUNTING
Contemporary issues in accounting
Name of the University
Name of the student
Authors note

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Table of Contents
Introduction:....................................................................................................................................2
Prudence:.........................................................................................................................................2
Conceptual framework of accounting:.............................................................................................2
Process for updating conceptual framework:..................................................................................4
Advantages and disadvantages of financial reporting:....................................................................4
General purpose of financial report in accordance with framework of AASB:..............................4
AGM report:....................................................................................................................................7
Shareholders perspective analysis:..................................................................................................8
Directors report:.............................................................................................................................10
Recommendation:..........................................................................................................................11
Closing statements:........................................................................................................................11
Reference:......................................................................................................................................13

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Introduction:
The report is prepared for discussing the conceptual framework of the two-selected
organization that is CTI Logistics Company and K & S Corporation Company. Structure of
governance along with evaluation of guidelines and rules by analyzing their financial reports of
both the organizations are considered in the study. Moreover, the report prepared demonstrate
the issues attributable to the internal as well as external control and structure of remuneration. It
also involves the discussion of principles of prudence that is applicable to both the companies.
The general purpose of the financial reporting is taken into account for these two companies. CTI
logistics is a transportation brokerage company that has logistics team that helps in creation of
heath capacity, providing services to customers and providing consistent business by keeping
carriers busy (Ctilogistics.com 2017). K & S Corporation Company is an organization that is
engaged in contract management, transportation and logistics, fuel distribution and warehouse. K
& S has three segments of its operation. Both the organization strengthens their financial
statements by formulation of distinctive strategies.
Prudence:
Weil et al. (2013) opines that prudence can be considered to be one of the most important
concepts that is referred to as conservatism as well as accounting principles. This is necessary for
registering of both liabilities and expenses during the period of realization.
Conceptual framework of accounting:
The objectives and aims of financial reporting is revealed as per the conceptual
framework and statement of CTI Logistics Company follows the essential requirement of
framework. Financial statements of CTI logistics are prepared under the convention of historical
cost. However, it does not involve the sale of financial assets that is measured at fair value. All

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the statements comply with the international financial reporting standard that is issued by AASB.
Financial position of CTI are revealed by the projection of balance sheet (Drury 2013). The two
aspects that is liabilities and assets are taken into consideration in this particular statement.
In this case, preparation of financial pronouncements considers uncertainties of accounts
along with other facts as regards events and circumstances namely doubtful, receivables,
economic lives of different fixed assets such as plant, property and equipment and many others.
There are certain uncertainties that can be detected by revealing specific corporate disclosures
right after undertaking prudence particularly prudence (Cheng et al. 2014). Thus, prudence refers
to the notion that is particularly takes into account magnitude of restraint for exercising
judgement on uncertainty levels (Ksgroup.com.au 2017).
The conceptual framework reflects the aim as well as objectives of particularly financial
declaration that is essentially qualitative in characteristics and renders vital information. Analysis
of the financial statements of the company K S Corporation particularly follows all the important
necessities of Conceptual Framework. As such, projections presented in the balance sheet assist
in comprehending the overall financial position of the company Ks Group. However, this
particular statement helps in understanding two different broad notions such as the assets as well
as liabilities of this corporation. Essentially, this aspect considers inventory as well as net
inventory, financial liabilities, intangible assets along with the equity of the shareholders.
However, according to the financial announcements of the company KS Group, it is hereby
declared that the board of the corporation has allowed a final dividend of around 1.5 cents during
the year 2016. In addition to this, it is also important to take note of the fact that declarations of
dividend also render vital information as regards the potential stakeholders of the company K S

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Corporation. The primary aim of financial declarations is to acquire favourable credit rating
(Allee et al. 2015).
Process for updating conceptual framework:
In a bid to develop conceptual framework, it is imperative for IASB to eradicate the
references from the basic notions of prudence. Advantages of financial reporting refers to
particularly prudence notion presented specifically in the conceptual structure (Wahlen et al.
2014). This helps in maintaining information consistency along with neutrality of activities.
Advantages and disadvantages of financial reporting:
The conceptual framework as applied in the preparation of financial statements of CTI
logistics relates to the concept of prudence that helps in neutrality and brings in the consistency
of information. Some of the disadvantage of financial reporting of this organization is there are
some biasness in stating the amount of figures that influences the evaluation of financial report
(Henderson et al. 2014).
General purpose of financial report in accordance with framework of AASB:
Total assets:
The total assets of CTI logistics stood at $ 157889403 in financial year 2016 as against $
161887698 in year 2015. This indicates that value of current assets has reduced in recent year.
The depreciation of Total assets is carried out at historical costs that involves expenditure that is
directly related to several items acquired under total assets.
As per the statement of financial position of the firm during the year 2016, it can be
hereby mentioned that the total assets of the corporation has declined to $445004000 during

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2016 from $536259000 in 2015. However, the company has proper internal control in place for
safeguarding the assets (Ksgroup.com.au 2017).
Tangible assets:
The net tangible assets of CTI logistics has value of $ 678422 as consideration at the date
of acquisition. Total value of tangible assets for financial year 2016 stood at $ 101641264
compared to $ 95488833. Depreciation of assets is calculated using the method of straight line
that leads to allocating cost net of their residual value over the useful estimated lives (Lee 2014).
Intangible assets:
The value of intangible assets stood at $ 29933929 in financial year 2016 as compared to
$ 31121478 in financial year 2015. Intangible assets of CTI logistics comprised of customer
relationships, goodwill, software, security lines and trade names. These intangible assets are
tested annually for impairment and are not subjected to amortization (Grant 2016).

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(Consolidated balance sheet)
(Ctilogistics.com 2017)
As per the annual declaration of the corporation K S Corporation, it can be hereby
mentioned that AASB 116 for particularly plant, property and equipment along with AASB 138
for Intangible assets present the directives for enumerating depreciation, amortisation. In
particularly, intangible assets are primarily enumerated at cost. However, after initial
recognition, specific intangible assets of the corporation are essentially carried out at specific
cost less any kind of accumulated amortisation along with collected impairment losses. As per
the report, intangible asset is registered to be $6307000 during the year 2016. On the other hand,
tangible assets of the firm is registered to be $1.5 per share in terms of book value. As stated in

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the annual report, depreciation is enumerated on essentially a straight line basis utilizing the
certain specific rates.
Depreciation calculation rates
(Source: Ksgroup.com.au 2017).
AGM report:
The annual general meeting of CTI logistics was held on 22nd November, 2016 and there
is resolutions mentioned in AGM concerning which the shareholders are requested to follow the
details. They approve final dividend payable to shareholders and approval is made in the meeting
itself. Some of the resolutions concerning financial statements were passed in the annual general
meeting.

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Report of annual general meeting:
(Ctilogistics.com 2017)
The annual general meeting (AGM) of the company KS Corporation mentions about the
ordinary business. It mentions about the financial statements with focus on the adoption on the
remuneration account, election of members of the board (Abeysekera 2013). Report on the
annual general meeting helps in understanding the pronouncements of the directors as well as
auditors of the corporation (Ksgroup.com.au 2017).
Shareholders perspective analysis:
Shareholders of CTI logistics are paid dividend twice a year and dividend payment are
resumed in year 2016 and 2017. Payment of dividend is subjected to improvement in the
financial performance of company. Business plan of organization encompasses some of the

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objectives that comprise of maximizing the return and profits attributable to shareholders by
constantly reviewing of the operations of organization (Li 2013). At the annual general meeting,
shareholders are liable to determine the non-executive director remuneration.
Overview of the operations K S Corporation, overall financial position, and strategies of
conducting business along with outlook of the management helps shareholders in gaining clear
understanding regarding the financial position of the firm. The review also helps in deciphering
the financial declaration issued by the company presented and presented according to the
directives stated in the ASIC RG (247) (Ksgroup.com.au 2017).
Financial Overview
(Source: Ksgroup.com.au 2017).
Financial overview of the corporation K S Group reveals that the operating revenue of the
company has declined during the year 2016 as compared to the year 2015. In essence, profit after

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tax as well as significant items has considerably declined during 2015 compared to the year ago
period. The dividends per share is registered to be 1.5 cents as compared to 7 cents. In addition
to this, the returns on shareholders’ funds also declined significantly to (52) % from the level of
4.5%. Thus, it can hereby mentioned that for the year 2016, the company’s performance is not
very satisfactory/favourable for investment in the company (Ksgroup.com.au 2017).
Directors report:
The directors report comprise of audited remuneration report, change in state of affairs,
directors meetings, company secretary, several events that is subsequent to balanced date,
environmental regulation, principle activities of group in addition to reviewing of results and
operations of business. Revenue from operations of organization was reported to be at $
150640994 and was up by 21.5% in the recent year. Due consideration was given to operating
conditions of company and there was a reduction in interest bearing debt by amount of $ 6.6
million. Company paid an interim dividend of 4c per share and for financial year 2016, there was
not declaration of final dividend. There are no particular environmental regulation that
operations of CTI logistics is subjected. Organization does not had any non-audit services in the
current year. The ability of group is to safeguard their capability to continue and recognized as
going concern that provides return to shareholders. Amount of dividend payable to shareholders
is adjusted for maintaining the capital structure. Shareholders of organization in the current year
take a dividend reinvestment plan (Edmonds et al. 2016).
The directors’ report of the company KS Group illustratively explains about the resource
based operation of the firm. This section of the annual declaration reveals the fact that the

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company has encountered a decline in the revenue founded on Western Australian resource. This
report also declares the reason for decrease in the revenue generated by the pull back of diverse
miners. This report also declares that the volumes of Chemtrans have also decreased in 2016,
projects of Bunbury timber also greatly suffered. On the other hand, this report also mentions
certain positive aspects that reveals performance above expectation of particular business
segments. In addition to this, the directors’ report also divulges about the focused approach of
the company that has helped it to become sharper, assisted in functioning at low cost and operate
a tough trading cycle (Marabel-Romo et al. 2017). Apart from this, this report also explicates the
manner in which the company has acquired and maintained market share in a competitive
environment (Maynard 2017). This segment of the annual report also mentions about the
business development in different divisions of operation.
Recommendation:
From the above analysis, it is recommended to CTI logistics that they should enhance
their financial performance by efficiently utilizing their assets that helps in generating profits so
that it will lead to increased dividend payment to shareholders. There was a decline in cash flow
resulting from trading conditions difficulties. The logistics operations needs to be optimized that
will help in utilizing the production capacity and improving the logistic process efficiency.
It can also be said that particular cost reductions as well as strategies of business
enhancement of K S Corporation have advanced. The company has consistently realized the
transformations in terms of cost reductions of property lease, rationalization as well as
replacement of particular motorized fleet, introduction of IT system, reduction in number of
employees and many more. Critical evaluation of the report reveals that the management of the