Advance Financial Accounting: An Analysis of Ooh! Media Limited

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Advance Financial Accounting
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Table of Contents
Introduction...................................................................................................................... 3
Descriptions of Accounting Concepts...............................................................................4
Conceptual framework, and the Issue of Measurement...................................................6
Fundamental Qualitative Characteristics - Understanding of Relevance and
Representational Faithfulness..........................................................................................7
Conclusion..................................................................................................................... 10
References.....................................................................................................................11
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Introduction
This report contains the applicability of the Australian accounting standards that
includes the accounting theories, various accounting concepts, and the importance of
conceptual frameworks. This report also states about the measurement issues occurred
in the Ooh! Media Limited Company. This company is operating in Australia and New
Zealand. It is one of the leading companies that establish the relationship between the
customers and the brand value of the product and services and its advertising.
Relevancy, representational faithfulness also plays an important role in the above
mentioned company in order to prepare a sound financial statement with the help of
useful information. Hence this report contains the various accounting concepts and
applicable standards to the company in order to achieve the sustainable growth and
accomplishment of desired objectives. Importance and relevance of the conceptual
framework also mentioned in this report.
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Descriptions of Accounting Concepts
This report shows the relevance, importance, and benefits of the various types of
accounting concepts used by the Ooh! Media Limited. Various types of accounting
theories also play an important role in explaining the old practices in order to get a
better framework and also provides the sensible set of principle that evaluates and
develops the various accounting concepts Ooh! Media Limited Company is one of the
most leading companies operates in Australia and New Zealand. This company
establishes a strong relationship between the people and the brands by conducting the
home advertising solution. According to legislation every company has to comply with
the applicable accounting concepts and standards in order to reduce the legal fines, and
the imposition of penalties which further contributes in achieving the desired objectives
of the said company and also increases the overall revenue effectively and efficiently.
There are various accounting concepts undertaken by the Ooh! Media Limited. That
contributes an overall increase in performance of the business of the said company.
Ooh! Media Limited is an Australian based company for which the Accounting Standard
Review Board (ASRB) is responsible for framing the Approved Accounting Standards
(AAS) in order to develop the statement of accounting techniques. This sets the
benchmarks for the financial reporting within the business. Accounting standards and
concepts are the part of the Generally Accepted Accounting Principle that fixed and sets
then accounting rules and company must abide by (Bond, et. al., 2016).
Some of the accounting concepts in the context of Ooh! Media Limited re enumerated
below:-
Going concern concept:- Every business or organization desires to survive or run
inconsistent manner on a long term basis. Here Ooh! Media Limited Company
incorporates the going concern concept in order to prepare the financial statements of
the based on the assumption that the said company will survive or stay in process in
future long term period. Under the going concern concept assumption is made that
revenue and the expenditure may postpone to a future period.
Conservatism Concept:- These concepts state that all the anticipated losses of the
future are required are need to record in the book of accounts by the Ooh! Media
Limited company. Profits are recorded on the basis of the certainty when there is the
possibility that they will be incurred whereas expenses are required to be recognized
sooner, hence this concept leads to more conservative profit and loss.
Matching concept:- This concept helps in facilitating the finance department of the
Ooh! Media Limited so that the expenditure and revenue generated for the same period
is recognized in the books of accounts. This leads to viewing the company's financial
statements recorded at the same time an inaccurate manner.
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Materiality Concept:- This concept is undertaken by the Ooh! Media Limited Company
in order to contribute to recording the petty or small type transactions so that the
financial statement of the company represents the financial results broadly.
All the above-mentioned accounting concepts based on the Australian Accounting
Standard Board are used and undertaken by the Ooh! Media Limited Company in order
to comply with the applicable accounting standards and compliances that further
contributes to reducing the unnecessary imposition of legal penalties and fines.
Financial reporting helps in determining the problems related to the finance through
evaluation and measurement of the performances of Ooh! Media Limited company, and
then communicating those findings to the stakeholders. There are many types of
financial reporting such as cash flow statements, changes in equity, income statement,
etc. Financial reporting should be made quarterly and yearly basis by the company
(Cascino, S., 2019).
Ooh! Media Limited operates in the Australia, therefore, it needs to make a financial
report at end of every financial year and then it should be properly Audited in order to
find out the hindrances that occurred in the accounting process. Sometimes the
company can face some issues relating to financial reporting. The study also brings
some financial reporting issues to AASB accounting standards that include:-
 Complex and technical requirements
 Ambiguity in financial statements that leads to unclear communication of the
relevant information between the various level of management of the company.
 Connection of financial reports with performances reports, and fiscal
sustainability reporting
All the above issues related to financial reporting can be resolved by the application of
the proper reporting frameworks within the Ooh! Media Limited. This company operates
in Australia, therefore, it should implement the effective mechanism of reporting which
contributes to systematic management and also leads in achieving the desired key
goals of the company.
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Conceptual framework, and the Issue of Measurement
A conceptual framework is a statement of the generally accepted theoretical principles
that form the frame or outline map for financial reporting. Financial reporting is a
mechanism of providing the information to the stakeholders that are relevant and useful
in the business and economic decision process, hence conceptual frameworks is a
theoretical approach that determines the responsibility of the occurrence of an event.
The conceptual framework plays a crucial role as an essential part of the financial
reporting system within the Ooh! Media Limited that leads in developing the accounting
standards and various types of accounting concepts. Proper and effective
implementation of conceptual frameworks also contributes to the measurement in
accounting and further contribute to promoting sustainable and ethical behavior (Chen,
and Schipper, 2016).
There are various issues of the measurement in respect of the Ooh! Media Limited such
as:
Measurement of the fair values which indicates the measurement or evaluation of both
financial and nonfinancial assets and liabilities. For this instance, the company has
recognized a framework in respect of the measurement of fair values that include a
skilled finance team who monitors and overseeing the overall measurement of fair
values and reports straight to the CFO of the company.
The conceptual framework then quotes the prices for similar assets and liabilities that
help to resolve the issue regarding measurement. A conceptual framework is highly
crucial as far as accounting concern as it contributes to the formulation of the policies
and procedures. Another measurement issue occurred within the Ooh! Media Limited is
an issue regarding the lease liability which is required to be taken into consideration.
Therefore conceptual framework helps in developing the policies, rules, and regulations
and further contributes to establishing the accounting standards based on the Australian
accounting board. AASB 15, AASB 9, and AASB 16 are implemented within the Ooh!
Media Limited and this is done only by the effective conceptual framework. AASB 15 is
related to the revenue generated from the customers, AASB 16 deals with the lease
issue, In AASB 16 basically sets out the principles for the presentation, measurement,
identification, and findings of leases and needs lessees in the accounting of all the
leases on balance sheet model just like financial leases of accounting policies in AASB
17, which is resolved with the help of the proper implementation of the conceptual
framework and accounting standards of Australian board's recommendation.
Hence conceptual framework is very important in addressing the issue and
development of proper and effective accounting concepts, standards, and the principle
so that the company can achieve its desired objective inefficient manner.
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Fundamental Qualitative Characteristics - Understanding of Relevance and
Representational Faithfulness
Fundamental qualitative
The fundamental quantitative is has been approved by the international accounting
standards board (IASB). Financial information is important to present the relevant and
faithful information of the organisation. The financial information is enhanced by the
comparable, timely, understandable, and verify of the data that has been recorded by
the financial accounting to the external part of the organisation. OOH, Media Limited is
applying the financial information to take the decision for effective the process and
achieve the organisational goals. The financial information is taking control of the cost
and making the effective cost and that will attract the external part of the organisation.
The fundamental quality is to make a faithful presentation and realistic to get accurate
feedback in the market. The information of financial is in the form of complete, neutral,
and there will be without error.
Fundamental Qualitative Characteristics
Relevance
Relevance is an important part of the organisation because the financial information has
to be in the form of relevant otherwise the user will can’t do the decisions among the
position of organisation or business. OHH Media Ltd. Is having the relevant information
to the market and the organisation will show the financial information with the accurate
data. Without the relevant information, the information will be no use in the market and
other use and the organisation will also be the legal action and the licence will be
canceled. Materiality is the aspect and that will be used in the specific entity (Accounting
verse, 2018). It means the material is usable in one entity that will not be used in other
entity.
Faithful representation
Faithful representation is the presentation of the financial reports to the other part of the
organisation. The presentation has to know what to present as per the performance and
that will be faith. OOH Media Ltd, is finding the overall information of the client to
advertise and then the work will be taken and this will work into the organisation. In the
organisation, the faithful has to maintain and that will be build trust.
Characteristics of Faithful representation
 Wholeness means the financial information is complete in the recording or
demand of users has present the proper or complete data with the proper clarification.
The complete information is like attractive and this will not have then it will do the
questioning to the organisation. The OOH media Ltd will take the all or complete
information and then it does the advertisement (Bragg, 2018).
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 Neutrality means the financial information is having own freedom and the data
has to show to all the members or user. In the democratic country, everyone is having
the freedom and the organisation is doing the advertisement with the country
regulations.
 Free from error means the financial information is having the many kinds of work
and that will be calculated in the financial department that will be checked and without
errors. The financial report shows without error then it will attract and they will gate the
good result.
Importance of faithful
 Trust
The faithful will makes the trust among the market and the OML is making the
advertisement in the specific market the valuable data or advisement will make and they
all know this the accurate data. After many times it makes the trust (Mbobo, et. Al,
2016).
 Perception
The data will present and the data is fake then after the perception has made the data is
mentioning that is not real. On the other hand, the data has given accurate or real then
all will believe in good perception.
Enhancing Qualitative Characteristics
Verifiability
The verifiability is the information is verified from the evidence and the user has an
option to check the information whether it is faithful or not. The user is having that type
of facility then they can be believed and the user has not to take care of the wrong
information.
Understandability
Understandability is the financial information is to understand by the user, the
information is understandable or significant information and the data is useful for the
user. The financial information excludes the compound items and it makes the report in
the form of simple and understandable.
Comparability
Comparability is the comparison between the single entity and across all the entity and
that will help the user. The user is doing the comparability and in the current scenario is
doing the comparison. For example, the financial data of 2015, 2016, 2017, and 2018
the data has been shown and make the graph to understand in an easy method. The
comparability is showing the accurate figure, it is growing or not and what the difference
is in the last five years (My accounting course, 2019).
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Timeliness
The timeliness is most valuable for the decision makers and this will help the
organisation and making the effective decisions and the study will be done in the time
for the specific time. The timeliness is cannot be delayed or then it will be not usable in
the financial information.
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Conclusion
In this report, it has discussed the accounting theories and in the accounting, there are
many concepts will applied with the different organisations. It has also discussed the
importance of the conceptual framework. Ooh Media Limited is operating in Australia
and New Zealand and it having many issues and that has measured in this report.
There are many accounting concepts is using by the OML and all are based on the
Australian accounting standard board. It also discussed the fundamental qualitative
characteristics is used in financial accounting. it discussed the financial accounting has
to follow the relevant and faithfulness information to the users and this will be helpful in
making the trust in the market.
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References
 Accounting verse. 2018. Qualitative characteristics of financial information.
Accounting verse. [Online] Available at: https://www.accountingverse.com/financial-
accounting/introduction/qualitative-characteristics.html [Accessed on: 17 Apr. 2019]
 Annual Report., 2018. Ooh! Media Limited [Online]. Available at:
https://investors.oohmedia.com.au/FormBuilder/_Resource/_module/Kop5qeccvUmfSk
ReJ8Nx5g/docs/reports/annual/oOh!media-Annual-Report-2018.pdf [Accessed on 17th
April 2019].
 Bond, D., Govendir, B. and Wells, P., 2016. An evaluation of asset impairments
by Australian firms and whether they were impacted by AASB 136. Accounting &
Finance, 56(1), pp.259-288.
 Bragg, S., 2018. Faithful representation. Accounting tools. [Online] Available at:
https://www.accountingtools.com/articles/what-is-faithful-representation.html [Accessed
on: 17 Apr. 2019]
 Brumm, L. and Liu, J., 2019. New leasing accounting standard. Taxation in
Australia, 53(8), p.449.
 Cascino, S., 2019. Bridging Financial Reporting Research and Policy: A
Discussion of ‘The Impact of Accounting Standards on Pension Investment
Decisions’. European Accounting Review, 28(1), pp.35-43.
 Chen, Q. and Schipper, K., 2016. Comments and observations regarding the
relationship between theory and empirical research in contemporary accounting
research. Foundations and Trends® in Accounting, 10(2-4), pp.314-360.
 Mbobo, M, E., and Ekpo, N, B., 2016 Operationalising the Qualitative
Characteristics of Financial Reporting, International Journal of Finance and Accounting,
Vol. 5 No. 4, 2016, pp. 184-192. doi: 10.5923/j.ijfa.20160504.03.
 My accounting course. 2019. What is the Relevance Principle? My accounting
course. . [Online] Available at: https://www.myaccountingcourse.com/accounting-
dictionary/relevance-principle [Accessed on: 17 Apr. 2019]
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