Financial Accounting: Regulatory Environment and Financial Reporting

This financial accounting report, formatted as a newsletter, addresses key aspects of the regulatory environment and financial reporting. It begins with an overview of recent modifications to IFRS 17, including the board's deliberations and proposed amendments. The report then highlights ASIC's focus areas in financial reporting reconnaissance, emphasizing areas such as tax accounting, revenue recognition, and impairment testing. A significant section analyzes the impact of political interference on a national broadcaster, discussing potential effects on company shares and regulatory changes. The report includes a memo comparing and contrasting the income statement by nature and function methods, offering insights into expense classification. The report references academic sources to support its claims. The report aims to keep accounting professionals abreast of the latest developments and their implications on financial statements.

Running Head: FINANCIAL ACCOUNTING 0
Financial
Accounting
(Student Name)

FINANCIAL ACCOUNTING 1
The Regulatory Environment and
Financial Reporting
NEWS LETTER
Recently, there are certain changes occur in
the accounting standards that created great
impact over the performance of the company
to the certain extent. It has both, positive as
well as negative impact over the company
that occur challenges or opportunity for
them in an effective manner.
Over View of the modifications to IFRS 17
and its owed procedure
The board deliberated the projected
adjustments to IFRS 17 as an entire. They
evaluate apiece of the projected
modifications which are in contradiction of
the norms of the Boards that were usual in
October, 2018. With considering the due
process which is undertaken by the Board in
completing the project of narrow-scope on
the amendments to IFRS 17 as well as also
inveterate that its wishes to publish an
exposure draft setting up the proposed
amendments to IFRS 17.
Amending proposals for management
performance measures
The Board decided to clarify that the
management performance measures are one
of the subject to the general requirement that
information included in financial statements
that must provide a faithful representation.
They also decided to specify that the
management performance measures should
be faithful that would able to signify the
financial enactment of the article to the
operators of the pecuniary proclamations
(Camfferman & Zeff, 2019).
ASIC focus areas financial reporting
reconnaissance
On June 2019, ASIC (Australian Securities
and Investments Commission issued the

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Media Release MR19-143 that mainly focus
over the outline of its 30 June 2019 financial
reporting surveillance program. It majorly
focuses on nine areas which are:
 Tax Accounting Impact of the new standards Revenue Recognition policies Estimate and accounting policy
judgment Off balance sheet arrangement Expense deferrals Revenue recognition policies Impairment testing and assets values Operating and financial review
The companies must determine the extent of
the impacts as such could have a flow-on
effect to the financial covenants, divided
policy, remuneration schemes, tax liabilities
as well as it also require new system as well
as processes (Casonato, Farneti & Dumay, 2019)
Political interference crisis hits national
broadcaster in Australia
The national broadcaster in Australia has
been plunged into the crisis after it emerged
that the chairman of its board had demanded
a reporter be fired following pressure from
them the prime minister. The exceptional
political interference in the running of the
state funded Australian Broadcasting
Corporation triggered the emergency staff
meetings at its office across the country. An
email leaked to media revealed that in the
midst of the government anger at a report a
corporate tax cuts by the ABC’s economics
editors.
Such case occur issue for other companies
as the shares of the company are greatly
affected from such intervention as well as
the government will introduce new laws and
regulations that will affect the whole
industry to the certain extent. The
government distanced from the chaos. The
communications minister review that he had
only every raised the factual matters with

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the ABC, not staffing concerns (The
Guardian, 2019).

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Memo
TO: Director
FROM: (Student Name)
DATE- August 12, 2019
In order to classifying the expenses on the statement of profit or loss as well as other
comprehensive income there are mainly two methods that the company can adopt income
statement by nature method as well as income statement by functional method such methods help
in evaluating the expense and income of the company in an effective manner. Such are explained
in below points:
Revenue statement by method of Nature
Such statement is one of the method in which the expenditures are revealing rendering to
the sorts the company spent in its business such as employee’s benefits, transport cost and so on.
It is comparatively easier to be executed by the company. However, such process is not feasible
for calculating the gross profit of the company.
Revenue statement by Function method

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It is the methods in which the expenditures are represented rendering to the diverse function
by are spent on. Such method allows calculating the operating profit as well as gross revenue
inside the revenue statement as well as frequently used in the multi-step setup of revenue
statement.
Therefore, income statement h function method should be adopted by the company to
analyze the gross profit as well as operating profit of the company in an effective manner (Choi,
Choi, Myers & Ziebart, 2019).
There are certain factors that the company need to consider when they select between the
available methods as they are:
 The nature of expenses occur in the organization
 The statement that is adopted by the company
 Motive behind the calculation of expense such as the company only focuses over the
expenses of the company or also focuses over the inflow of the amount (Lin et al., 2019).

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References
Camfferman, K., & Zeff, S. A. (2019). The challenge of setting standards for a worldwide constituency: Research
implications from the IASB’s early history. European Accounting Review, 27(2), 289-312.
Casonato, F., Farneti, F., & Dumay, J. (2019). Social capital and integrated reporting: losing legitimacy when
reporting talk is not supported by actions. Journal of Intellectual Capital, 20(1), 144-164.
Choi, J. H., Choi, S., Myers, L. A., & Ziebart, D. (2019). Financial statement comparability and the informativeness
of stock prices about future earnings. Contemporary Accounting Research, 36(1), 389-417.
Lin, S., Riccardi, W. N., Wang, C., Hopkins, P. E., & Kabureck, G. (2019). Relative effects of IFRS adoption and
IFRS convergence on financial statement comparability. Contemporary Accounting Research, 36(2), 588-
628.
The Guardian. (2019). Political interference crisis hits Australia's national broadcaster. Retrieved from:
https://www.theguardian.com/australia-news/2018/sep/26/political-interference-crisis-
hits-australias-national-broadcaster