Report: Contemporary Issues in Accounting - [University Name]

This report provides an in-depth analysis of contemporary accounting issues within the context of Australian listed companies, specifically focusing on Woolworths Limited and Wesfarmers. It examines their financial reporting practices, drawing insights from their annual reports for the financial year 2016. The report explores the conceptual framework of accounting, including the application of AASB standards and IFRS, and assesses how these companies adhere to the established guidelines. Key areas of discussion include the directors' declarations, shareholder analysis, remuneration reports, and the impact of prudence on corporate financial reporting. The report compares the financial reporting practices of Wesfarmers and Woolworths, offering recommendations for improved financial statement preparation, and concludes with an evaluation of the overall significance of the conceptual framework and its practical application.

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

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CONTEMPORARY ISSUES IN ACCOUNTING
Executive Summary:
The report is prepared to demonstrate the analysis of conceptual framework of the consumer
companies in Australia. It also relates to the discussion of the concepts of produce and their
drawbacks and revised framework. Two organizations selected for the analysis purpose is
Wesfarmers limited and Woolworths. Moreover, analysis is done by depiction of facts from their
respective annual reports for the financial year 2016.

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Table of Contents
Introduction:....................................................................................................................................2
Discussion........................................................................................................................................3
Conceptual framework of accounting of Woolworths and Wesfarmers:........................................3
General purpose financial statements as per the framework of AASB:..........................................4
Director’s declaration:.....................................................................................................................7
Analysis of shareholders:.................................................................................................................9
Remuneration report:.....................................................................................................................10
Prudence and its impact on dealing with corporate disparity:.......................................................12
Comparison of the annual report of Wesfarmers and Woolworths Ltd:.......................................13
Recommendation:..........................................................................................................................14
Conclusion:....................................................................................................................................14
Reference:......................................................................................................................................16

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Introduction:
The report is prepared to emphasize on the overall comprehending operational procedures
of the conceptual framework related to Australian Listed companies. Two companies that have
been selected for analysing their conceptual framework by referring to their annual reports are
two consumer companies that are Wesfarmers and Woolworths Limited. Woolworths is the
largest supermarket retail chain operating in Australia and Wesfarmers limited has diverse
business operations and has diverse portfolio of business. The financial declaration of these two
organizations has been demonstrated in the current study with the intention of identifying various
measures taken by the corporations in order to support the directives laid down by Australian
accounting standard board (Barth et al. 2014). For analysing their framework, various extracts
has been taken for their annual report such as director’s declaration, remuneration report and
notes to financial statement.
Discussion
Conceptual framework of accounting of Woolworths and Wesfarmers:
Conceptual framework helps in rendering useful information and depicts the financial
declaration objectives. The framework deals with the enumeration and detection of several
financial statements components as indicated under the financial statements. Sometimes, the
organization fails to provide with the user of their financial statements with the relevant and
useful information.
The fact whether Woolworths and Wesfarmers adhere to the specific requirements of
conceptual framework is revealed by the analysis of their annual report. The overall financial

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position o organization is depicted by the balance sheet as they involve liabilities and assets as
the two main factors. Other aspects such as inventories, shareholders equity and tangible and
intangibles are also included. The development of conceptual framework is essential for
eliminating the diverse concept relating to prudence.
General purpose financial statements as per the framework of AASB:
The consolidated financial statements of Woolworths have been prepared according to
the ASIC class order 98/100. Furthermore, they are prepared in accordance with the International
financial reporting standard, Australian Accounting standard along with their interpretations and
all other requirements of law. Except for the financial assets sales derivates, all the component
are measured at the fair value and the financial statements have been prepared at historical cost.
AASB 107 of the cash flow statements forms the basis of the cash flow resulting from the
repayment of borrowings and proceeds from borrowing. The entire new and amended accounting
standard and their interpretations have been adopted by organization and they are effective for
the period beginning after June 30th, 2015. The amount recognized in the current period was not
materially affected by any of the amendments and new standards and it is not likely to affect
them in the future period (Camfferman and Zeff 2015).

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Preparation basis:
(Source: Woolworths.com 2017)
The Consolidated financial statements of Wesfarmers have been prepared according to
the requirements that are laid down in the Australian accounting standard, international financial
reporting standard and Corporation Act, 2001. Historical cost forms the basis of preparation of
financial statements and all the components are measured at the fair value except for investments
that is held by associates. Furthermore, the financial report is presented according to ASIC
Corporation instruments 2016/191. The entire new and amended accounting standard and their
interpretations have been adopted by organization and they are effective for the period beginning
after June 30th, 2015. Implications of AASB 16 is being currently evaluated by the group where
organization is required to depict the current value of commitment as liabilities under balance
sheet along with the asset that has right to use (He et al. 2016).

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Preparation basis:
(Source: Wesfarmers.com 2017)
Director’s declaration:
The figure below depicts the declaration of director of Woolworths and the declaration is
made according to the requirement of 295A of Corporation act, 2001. It is declared that the
financial statements of organization complies with the Australian accounting standard and is
prepared in accordance with the Corporation act, 2001. Organization will be able to meet the
obligations that are applied in ASIC class orders that are discussed in the notes to financial
statements. Financial statements also comply with the International Financial reporting standard
(Christensen et al. 2015).

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Remuneration report:
(Source: Woolworths.com 2017)
The figure below depicts the director’s declaration of Wesfarmers for financial year
2016. It has been declared by the directors that that consolidated financial statements of
organization is prepared by adhering to the regulations of Corporation act, 2001 and complies
with the internal financial Reporting standard (Brown 2016). Details of complying with the
standards have been mentioned in the notes to financial statements.

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Directors declaration:
(Source: Wesfarmers.com.au 2017)
Analysis of shareholders:
Shareholders are assisted with acquiring understanding of organization’s financial
position by viewing the overall operations, along with the outlook of management. By analysing
the report, it can be notes that board has issued dividend of 77 cents per share in year 2016 that is
lower as compared to previous year. The total dividend pay out in financial year 2016 stood at $
1 billion. There as a reduced payment of dividend in year 2016. A fully franked final ordinary
dividend of 95 cent per share was declared by board of directors of Wesfarmers limited and the

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dividend payment has reduced in the current year. Dividend per share for financial year stood at
$ 1.86. The total amount of dividend for the year 2016 that was paid to shareholders stood at $
1070 million (Wesfarmers.com.au 2017).
Remuneration report:
The figure below depicts the remuneration report of Woolworths and it provides with the
changes in the remuneration that is paid to the non-executive and executive directors of
company. The remuneration principle of Woolworths has been set by aligning it with the
refocused business strategy. It is as per the discretion of board of directors whether to increase
the salary of executives based on their performance. The fees of non executive directors are
approved by the shareholders and they are paid an annual fee of $ 4000000. Fees payable is
under the current aggregate annual feel pool.

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Auditors declaration:
(Source: Wesfarmers.com.au 2017)
The recommendation on remuneration is provided in accordance with the section 9A of
the Corporation act, 2001. Fixed remuneration if managing director was not changes in thus
particular year and there are principled guiding the remuneration of directors.
Remuneration report:
(Source: Wesfarmers.com.au 2017)