Financial Principles and Theory Report - Premier Investment Limited

This report provides an in-depth analysis of financial principles and theory, focusing on the compliance and applicability of accounting standards for Premier Investment Limited, an ASX-listed Australian company operating in the retail fashion industry. The report examines the objectives of general-purpose financial reporting, the social and economic role it plays, and the interpretation, application, and evaluation of accounting standards. It also delves into current accounting issues, such as international accounting differences, harmonization, and convergence of accounting standards. The methodology used is qualitative, incorporating a questionnaire for stakeholders and management to address emerging accounting issues. The findings highlight the company's efforts to comply with ASIC and AASB standards, while also emphasizing the importance of minimizing accounting issues for clearer financial statement presentation. The report concludes with recommendations for enhancing financial reporting practices.

Running Head: FINANCIAL PRINCIPLES AND THEORY
FINANCIAL PRINCIPLES AND THEORY
Name of the Student
Name of the University
Author Note

1FINANCIAL PRINCIPLES AND THEORY
Executive Summary
The aim of this report is to do analysis on the financial principles and theory. Under
this assignment discussion will be on compliance and applicability status of the accounting
standard for the company Premier Investment Limited. It is Australia based company in the
specialty retail fashion chains across many countries. Hence, under this assignment, research
will be done on the accounting standards, general purpose financial reporting, corporate
reporting practices as well as current accounting issues in order to determine whether the
financial statements of the company are faithfully represented or not. Therefore, it being
analyzed that apart from the emerging accounting issues all over the world, the company tries
for complying with the guidelines of the ASIC and AASB standard. However, accounting
issues should be minimized as far as possible for more clarity in financial statement
presentation and serving the interests of the stakeholders.

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Table of Contents
Introduction................................................................................................................................3
Methodology..............................................................................................................................3
Findings......................................................................................................................................4
Accounting Standards............................................................................................................4
Current Issues in Accounting.................................................................................................6
Objectives of General Purpose Financial Reporting..............................................................8
Social and Economic Role Played by General Purpose Financial Reporting......................11
Interpretation, Application and Evaluation of Accounting Standards.................................12
Research Findings on Corporate Reporting Practices and Current Accounting Issues.......19
Implications of Findings..........................................................................................................20
Conclusion and Recommendations..........................................................................................21
Reference..................................................................................................................................22
Appendix..................................................................................................................................28

3FINANCIAL PRINCIPLES AND THEORY
Introduction
The aim of this report is to do the analysis on to do the analysis of on the compliance
and applicability status of the accounting standards of ASX listed company. For this, analysis
will be done on Premier Investments Limited. This Australian public company operates in
various retail fashion chains in the New Zealand, the United Kingdom, Malaysia, Australia
and Hong Kong. This company operates through the segments of retail and investments. The
company generally offers women’s wear, casual wear as well as non-apparel products
(premierinvestments.com, 2019). Therefore, under this analysis will be done on the
objectives of the general purpose accounting standards. Moreover, social and economic role
played by the general-purpose financial accounting will be discussed. Further, discussion will
be done on the interpretation, application and evaluation of the accounting standard. In
addition, relationship and the impact of the applicable accounting standards in the context of
the financial accounting theories, regulations, concept as well as other topics will be
discussed in detail (premierinvestments.com, 2019).
Methodology
The methodology that is adopted for the analysis on the compliance and applicability
status of the accounting standard is done by the method of qualitative method. For the
analysis the company that is chosen for the analysis from ASX 200 listed company is Premier
Investment Limited. Thorough analysis is done of the company regarding compliance and
applicability of the accounting standard. Questionnaire has been selected for the emerging
accounting issues from the group of stakeholders and company’s management
(premierinvestments.com, 2019).

4FINANCIAL PRINCIPLES AND THEORY
Findings
Accounting Standards
Accounting standard stands for the written documents and the policies, which
provides the principles for the recognition, presentation, treatments, measurements as well as
disclosures of the accounting transaction in financial statements. The accounting standards
are introduced with the aim of standardizing the accounting practices as it helps in the
comparison of the financial statement for the different organizations that fall in the same
industry for which the accounting standards are applicable (Brown, Preiato & Tarca, 2014).
Therefore, the government agency, Australian Accounting Standards Board is responsible for
the development as well as maintaining the applicable financial reporting standards to the
private as well as public sector entities of Australian economy. Conceptual framework is used
by the AASB for the development and evaluation of the accounting standards. The Australian
Securities and Investments Commission Act 2001 set the functions and the power of AASB
(Henderson et al., 2015). ASIC is the independent body of Australia that is the regulator of
the corporate of Australia. The role of ASIC is for enforcing and regulating the company as
well as the laws of the financial services for protecting the Australian investors, creditors and
the consumers. The responsibility areas of ASIC include corporate governance, securities and
derivatives, insurance, consumer protection and financial literacy (Lovell, 2014). The act of
ASIC requires the following aspects:
 Maintaining, facilitating as well as improving the financial system and entities.
 Promoting the confidence as well as informed participation by the consumers as well
as investors in financial system.
 Administering effectively law with the minimal procedural requirements.
 Enforcing and give effect to law.

5FINANCIAL PRINCIPLES AND THEORY
 Making information about the entities as well as other bodies for availability to the
public as early as possible.
 Taking the necessary action for enforcing and giving effect to the law.
ASIC provides the access to the legislation that is applicable regarding the requirements,
regulatory documents and professional standards. They regulates whether the entities are
complying with the requirements of the financial reporting. The active monitoring of the
compliance of the entities with the requirements does contribute directly to the confidence of
the investor and integrity of the market (Brusca & Martínez 2016). It helps in ensuring that
the issued financial reports are relevant as well as reliable and ultimately helps the users for
making better-informed decisions in market place. In case of non-compliance with the
accounting standards, ASIC seeks for to get revised financial statements, either by the
negotiation with the involved company or if necessary using the power for enforcing the law
(Bazley, Hancock Robinson, 2014).
The accounting standard that is used by the entities for the preparation of the financial
reports under Corporations Law is made by AASB. The reporting entities must have to
comply with the Australian Accounting Standards as well as interpretations issued by
Australian Accounting Standards board and its applicability with the Corporations Act 2001
requirements (Pacter, 2014). The reporting entity is the entity, under which is it is reasonable
to expect that the existence of the users that rely on the general purpose financial statements
of the entity for the information which will be useful for making as well as evaluating the
decisions about resource allocations. The reporting entity may be single or the group that
comprises of parent as well as its subsidiaries (Budding, Grossi Tagesson 2014).
AASB is the agency of government of Australia. The standards of AASB are defined
as Australian Accounting Standards that includes Australian similar to the International

6FINANCIAL PRINCIPLES AND THEORY
Financial Reporting Standards. When they first began for adapting to the IFRS as the
Australian Accounting Standards, AASB made some of the modifications to the IFRS that
includes removing of the some options as well as addition of the some disclosures (Bamber &
McMeeking, 2016). Under the year 2007, Australian Accounting Standard was modified by
the AASB so that the requirements are similar to the IFRS as issued by IASB for the profit
entities. The basis for preparing financial statements notes defines reporting framework as the
‘Australian Accounting Standard’. The note depicts the compliance with the International
Financial Reporting Standards (Edgley, 2014).
Current Issues in Accounting
There are many issues that are faced in the accounting these days. Some of the most
important and key issues are international accounting differences that exist between the
countries, harmonization of the accounting standards and last but not the least convergence of
the accounting standards (Rossi et al., 2016).
International Accounting and the differences between the countries
The first issue in the accounting is the accounting differences between the countries.
Regulations, mode of regulations and practice usually differs by countries to countries. These
differences exists across the many countries in the treatment of the accounting of many items
such as the firms in United States are generally not allowed for reporting the plant,
equipments and property at the amount that is greater than the historical cost. However,
companies in European Union are allowed for reporting their assets at the market values in
the balance sheet (Perera & Chand, 2015). Moreover, the cost that is involved in the research
and development may be recognized as expense in Japan but in Canada and France,
development cost is considered as the asset. Therefore, these differences in the accounting
may result in the significant different amounts that are being reported on the income

7FINANCIAL PRINCIPLES AND THEORY
statement as well as the balance sheet. Various factors have been hypothesized by the
scholars regarding these differences. Some of the causes for these differences include the
system of political nature, economic development stages, accounting state education and
research (Newberry, 2015).
Harmonization of Accounting
The harmonization of the international accounting is defined as that process which
brings the international accounting standards in the some sort of the agreements that
preparation of the accounting standard should be based on the common set of the principles
for the measurement as well as the disclosures. Harmonization of the accounting standards
does not focus on eliminating the differences rather it focuses on reducing the rules that are
contradicting. Therefore, international harmonization of the accounting standard will help in
reducing the differences as much as possible for enhancing better comparability of the
financial statements internationally (Cheng et al., 2014). According to Robert Buchanan, the
decision makers recognize the need for understanding the financial documents with the
clarity as well as transparency. So that the rules of the accounting are in convergence to the
single international standards. Harmonization may be divided into two aspect, material as
well as formal harmonization. Former is referred as the research from the practical point of
view. This involves harmonization of the practices of accounting by different organizations.
Later is referred as theoretical point of view that means similarity and the diversities among
the rules as well as regulations of the different counties or groups. Harmonization will help
the countries in standardization of the accounting practices and the standards, reduction of the
cost (Gray, 2014).
Convergence of the Accounting

8FINANCIAL PRINCIPLES AND THEORY
The issue of convergence of accounting is not new idea, as it first aroused in late
1950s, which was in response to the increase in the cross border capital flows and economic
integration post world war II. Hence, it is referred as the high quality of the accounting
standard that is to be used internationally as well as standard setters’ efforts for the goal
achievement. The effort that is taken towards the convergence includes improving of the
respective standards of accounting as well as those which aims for reducing the differences
between them. The motivation for the convergence includes belief for increased
comparability between the financial statements, which will benefit majority of the
stakeholders such as FASB has stated in one of their comment that, convergence will benefit
the investors, auditors, companies as well as the other participants in the financial reporting
system of US (De Villiers, Venter & Hsiao, 2017). However, the issue of the convergence
has been criticized also by many, calling convergence as “shelved indefinitely” and advising
IASB for improving its own standards as compare to focusing on convergence. The other
criticism includes nature of converged accounting standards such as this convergence will
increase the using of the fair value accounting. In addition, some has criticized it for its
principal based standards because it allows different interpretation for the transaction of
similar nature; it has been criticized for its less precision. According to Robert h. Herz, the
single set of the high quality international standards of accounting is desirable because the
uses of it will improve the comparability of the financial information by reducing the cost of
the users of the financial statements; its preparers, auditors as well as others by helping for
promote the capital market of world. FASB continues to invest its considerable time and
resources in the efforts of the convergence (Beattie, 2014).
Objectives of General Purpose Financial Reporting
General purpose Financial Reporting is defined as those financial statements that are
released to the users of broad group. It is generally issued throughout the year for aiding the

9FINANCIAL PRINCIPLES AND THEORY
investors as well as the creditors in the process of the decision-making. It is the financial
report for meeting the needs of the information that are common to the users, for those who
are not able to command for the reports preparation that are tailored specifically for all their
needs of the information (Achim & Chiş, 2014). The set of general purpose financial
reporting includes income statement, balance sheet, statements of retained earnings or
owner’s equity and cash flows statements. The set of the financial statements is known as
general purpose because it includes basic financial statements, which can be used by the
broad categories of people for the broad range of the activities (Ball, Li & Shivakumar,
2015). The companies use this particular set of the financial statements as the form of the
financial reporting for communicating the performance of the company with the people that
is outside of the entity (Zhang & Andrew, 2014). However, much specific financial reports
such as market analyzes and production flow processes are not considered as the part of the
general-purpose financial statements, it is because these reports are available for only
managements of the company. Therefore, financial reports are intended for providing the
information that would meet external users’ need who cannot prepare special reports for
meeting their needs of specific information (van Mourik & Katsuo, 2014). Following are the
objectives of the General purpose financial reporting are as follows:
 The general purpose financial reporting is intended as the means for communicating
the information that is relevant as well as reliable about the reporting of entity to the
users. The objectives are derived from the needs for the information for the identified
users of the reports of the general-purpose financial reports. These needs depend upon
the reporting entities activities as well as users of the decision that make about them
(Davidson, Dey & Smith, 2015).
 The reporting entities are responsible for controlling of the resources as well as
influencing the community members through providing of the goods and the services,

10FINANCIAL PRINCIPLES AND THEORY
charges, acquisition and investments of the resources, rates and taxes as well as
levying of the prices. The interest of the community is best served in case if controlled
scarce resources are served in most efficient manner for providing of the goods and
services (Leuz & Wysocki, 2016). The output are raised by the efficient use of the
resources, which has effects of desirable macro economics with the enhancement of
standard of living and the employment as well as enabling the objectives of social
policy for achieving it at the lowest cost. The member of community makes the
decisions for allocations of the resources in relation with the reporting entities (Feng
et al., 2014).
 Efficient allocations of the scarce resources can be enhanced only when the sufficient
information is available to the groups and the identified groups, based on that
information, they take decisions. Therefore, general purpose financial reporting helps
in providing this information (Lourenço, 2015).
 It also helps in providing the mechanism for enabling the managements as well as
governing bodies for discharging their accountability. The managements as well as
the governing bodies are accountable for those who helps in providing the resources
to entity for the controlling and planning for the business entity operations (Robinson
et al., 2015). In the broader context, the reporting entities are accountable for the
public at large because the influence of the reporting entities on the community
members at both the levels of micro as well as the macroeconomic. It provides the
means through which there is discharging of the responsibility (Gomariz & Ballesta,
2014).
 However, the needs of the information of users at times are distinguishable between
the business as well as non-business entities. The common objectives that are
specified in the statement show the inherent similarities that exist between these two

11FINANCIAL PRINCIPLES AND THEORY
types of the entity. While the business organization seeks for earning more profits or
the desired rate of the return, the non-business organizations aim for the non-business
organizations (Tschopp & Huefner, 2015). Both the types of the types of the
organizations provides the community with the goods and services by using the scarce
resources in process, both the organizations obtain the resources from the external
sources and are accountable for their representatives or the providers of resources. In
addition, the entities incur the obligations, both control the stocks of the resources and
both must be viable financially for meeting their operating objectives (Yahaya, Kutigi
& Mohammed, 2015).
Social and Economic Role Played by General Purpose Financial Reporting
General purpose financial reporting enhances social welfare by look it into the interest
of the employees, government and the trade unions. The entities provide the information to
their various stakeholders in regarding the performances of the company in relation to its
management and their diligence and ethics in relation to their discharge of their fiduciary
duties as responsibilities. Further, the economical role played by the company includes
providing the information in relation to one or more important variables such as income,
liabilities, assets and overall all financial position of the company (Oulasvirta, 2014). These
information provided by the organization would be very important for the stakeholders
because based on these decisions, they would be able to take their decisions. It enables the
investors for predicting the timing as well as amount of the future cash flows while making
decisions relating to investments (Brown & Dillard, 2014). The main aim of the general-
purpose accounting is providing the information that will assist in making the decision
relating to economical aspect of the organization. Moreover, financial reporting helps in
providing the information about the performance of the organization in terms of its financial

12FINANCIAL PRINCIPLES AND THEORY
position and changes in the financial position, this is useful for the wide ranges of the users
for making the economic decisions (Leuz & Wysocki, 2016).
Interpretation, Application and Evaluation of Accounting Standards
Accounting of Agriculture
The agricultural accounting helps in addressing every aspects of accounting, which
can be encountered in the farm, related business or ranch. The intention behind this is not
only limited for explaining the concepts of accounting but it also provides the examples as
well as it shows operations and construction of the accounting system. Hence, the accounting
standard set for the accounting of agriculture is AASB 141 (Agriculture., 2019). The main
objectives for this particular standard are to prescribe the treatment of the accounting,
presentations of the financial statements as well as the disclosures in relations to the activity
of the agriculture (Starova et al., 2016). This application of this standard is applied to the
following situations:
 There is the requirement for every entity for the preparation of the financial
statements that is in accordance with the part 2M.3 of Corporation Act, which is the
reporting entity.
 The general-purpose financial reports for each other reporting of the entity.
 The financial reports which are held or to be held and general-purpose financial
reports.
The scope financial of the accounting of agriculture is applied in case if they relate to the
agricultural activities for following:
 Biological assets
 Government grants and
 Agriculture that produces at the time of the harvest.

13FINANCIAL PRINCIPLES AND THEORY
For the company Premier Investment Limited, the accounting standard of accounting
for agriculture is not applicable.
Accounting for Financial Instruments
The derivative financial instrument consists of financial options, interest contracts,
futures and interest rate as well as currency swaps. The Australian Accounting Standards
Boards provides the AASB 9 accounting standard of Financial Instrument, under the section
334 of Corporation Act 2001. This standard has the objective for establishing the principles
for the reporting of the financial assets and the liabilities, which provides relevant as well as
useful information to the financial statements users in order for the assessment of amount,
timing as well as uncertainty of future cash flows of entity (AASB, 2014). AASB 9 applies to
the following situations:
 When each reporting organization that is required for preparing the financial report
according to part2M.3 of corporation.
 For each other reporting entity, general purpose financial statement is required.
 Financial statement that are or held out to be the general purpose financial statements.
Application by Company
The company has elected for adopting AASB 9 from the beginning of financial year.
AASB 139 has been replaced by AASB 9. It provides the approach for classification as well
as measurement of the financial assets as compare to the requirements of accounting standard
AASB 139. AASB 9 has introduced the new model of expected credit-losses impairments,
which requires the entities for accounting for the expected credit losses, when financial
instrument recognizes first and for recognizing full time losses expected on the timely basis.
The company has also elected for early adopting the AASB 9 requirements of hedge
accounting as on January 28, 2018. The nature as well as the effect of the important changes

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to the accounting policies of the company that have resulted from the early adopting of
AASB 9 as given below:
 The financial assets classification have been simplified by the adoption of AASB 9,
certain categories of classification have been removed of AASB 139. The
classification method given in AASB 9 is based on the business model of the
company for management of financial assets and contractual cash flows of financial
assets characteristics (Basford, 2017).
 In case of AASB 9, the amortization of the cost is applied to that instrument for which
the company has business model for holding financial assets for collection of the
contractual cash flows and the contractual cash flow characteristics are consist of the
solely payments of interest and the principal amount.
 In case of AASB 9, the company have the revocable option on the basis of
instrument-by-instrument for presenting the fair value changes of the instrument of
non-derivative equity that are not held for the trading in the other comprehensive
income without the reclassification for profit and loss. Premier investment group has
elected for classifying their listed investment, which it holds for this particular
category. These changes in the accounting policy have been applied in the company
retrospectively without any material impact on the retained earnings of the company.
 However, there has not been any significant impact on the financial liabilities
classification of group.
 The model of incurred loss, which was required in AASB 139, is replaced by the
model of ‘expected credit losses’ of AASB 9. It uses impairment allowance are
calculated on the basis of expected credit losses. After the recognition has been done
initially, the adjustment is done through the profit or losses at the date of reporting of
the impairment allowances at the date of reporting for the probabilities of improving

15FINANCIAL PRINCIPLES AND THEORY
or detoriating, It is because of this nature, the trade as well as other receivables and
the re-measurement of the allowances of the impairment by using expected model of
credit loss under the AASB 9 do not have any material impact on impairment
allowances of current or prior period (Financial Instruments., 2019).
The company’s financial instrument comprises of derivative financial instruments,
receivables, interest bearing liabilities, bank overdraft, payables, cash and cash equivalents
and listed equity investments.
Accounting for Foreign Currency Transactions and Forward Exchange Contracts
The accounting of foreign exchange accounting takes place when it is designed for the
economical hedge of foreign organizations’ net investments and when no expectation is there
for settling the transactions between the entities, which are to be consolidated. The scope of
the accounting for foreign currency transactions are as follows:
 In case if the organization recognizes the non- monetary assets and the liabilities, that
arises from the receipt or payment of the advance consideration that is before the
recognition of the related assets, receipt or income of entity then the interpretation is
applied to the foreign currency transactions (Standard, 2015).
 However, the interpretation is not applied for measuring the related expense, income
or assets on the initial recognition of the entity at the fair value or at fair value of
consideration received or paid at the date, which is other than the initial date
recognition of non-monetary assets or liabilities that arises from the advance
consideration.
 Entity should not apply for the interpretation in case of income taxes or the insurance
contracts that includes contracts of reinsurance, which are reinsurance contracts or
issues that it holds (AASB Interpretation, 2019).

16FINANCIAL PRINCIPLES AND THEORY
Application by the Company
In case of Premier Investment Limited, they have their exposure to the currencies of
future that arises principally from the purchases by the operating entities in the currencies that
is other than its functional currency. Approx 70% of the purchases of the company are
dominated by the United States Dollar that is not considered to be functional currency of any
of the foreign operating entities or the Australian entities (AASB Interpretation, 2019).
The company considers their exposure to the USD that arise from the inventory
purchase for the long term as well as ongoing exposure. Therefore, for protecting against the
movements against the exchange rate, the company involves into the contract of forward
exchange for purchasing US dollars. These contracts are termed as cash flow hedges that are
subject to the movements by the respective profit or loss and equity as moving of the foreign
exchange rates (Setyaningrum & Siregar, 2015).
The company’s risk management policy of the foreign currency helps in providing the
guidelines of the term by which currency hedging will be undertaken, either for the part or
full. The term is does not exceeds more than two years.
The foreign exchange contracts as well as interest rate swaps are recognized initially
in the financial statement at the fair value on the date of entering the contract and it is
remeasured at the fair value. Therefore, accordingly carrying amount of the interest rate
swaps and foreign exchange rate does the approximation of their value at the date of
reporting (Setyaningrum & Siregar, 2015).
Accounting for Leases
Introduction of AASB 16 is based on the single accounting model of lease and it
requires the leaser for recognizing the assets and the liabilities for the term of 12 months or
more than that of all the leases, unless there is low value of underlying assets. There is the

17FINANCIAL PRINCIPLES AND THEORY
need for the requirement of lease for recognizing the asset of right-to-use that represents its
rights for using the underlying leased assets as well as lease liability that represents the
obligations for making the lease payments. The objective behind this standard is for setting
out the principles for recognizing, measuring, presenting as well as disclosing of the leases.
The aim is to ensure that the lessor and the lessees provide the relevant information in the
manner of faithful representation of those particular transactions (aasb.gov.au, 2019). The
scope of this accounting standard means that the entity would apply this standard for all the
leases including the leases of rights of the use assets in sublease expect following:
 Leases for exploring for or using the minerals, natural gas as well as similar resources
of non-regenerative.
 Leases of the biological assets that are within the AASB 141 Agriculture scope, held
by the lessee.
 Arrangements of service concession that is within the scope of the arrangements of
service concession.
 Granting of intellectual property licenses that are within the scope of the AASB 15,
revenue from the contracts with the customers.
 Lastly, rights that are held by the lessee under the licensing agreements that is within
the scope of AASB 138, intangible assets such as motion picture films, plays,
manuscript, copyrights, patents and video recordings.
 A lessee may, however, is not required for applying this standard to the leases of the
intangible assets that is other than described above (Joubert,Garvie & Parle, 2017).
Application by the Company
Premier Investment Limited has completed the initial assessment regarding the potential
impact on their consolidated financial statements as well as in the process of the completion

18FINANCIAL PRINCIPLES AND THEORY
of the detailed assessment. After the application of the AASB 16, the actual impact on
financial statements in period of initial investment will depend on the following aspects:
 The economic conditions of future that includes incremental borrowing rate of the
company at the date of initial application.
 The extent of choices for using recognition exemptions and practical expedients.
 The latest assessment of the company regarding exercising of the options of lease
renewal.
 The composition of the lease portfolio of the company, which includes retail
property value in the holdover negotiations or the option of lease renewal
exercise.
There has been identification of the most significant impact, which is the company, will
recognize the new liabilities and assets for the leases which are classified currently as
operating leases. Moreover, expenses nature in relation to the leases which will be changed to
AASB 16 that is replacement operating lease expense of straight line with the charges in
depreciation for the right of using the assets as well as interest expenses on the lease
liabilities. The group will first apply this for the financial year July 2020 (Xu, Davidson &
Cheong, 2017).
The payments of operating lease are recognized as an expense in the statement of the
comprehensive income on the basis of straight –line over the term of lease. The incentives of
the operating lease have recognized as the liability when it is received and it is reduced
subsequently by the allocations of the lease payments between the liability reduction and
rental expenses. The company has entered in commercial operating leases on some land and
buildings, item of plant and equipments and motor vehicle, whose average life is of five years
(Niescho, 2018).

19FINANCIAL PRINCIPLES AND THEORY
Research Findings on Corporate Reporting Practices and Current Accounting Issues
As per the findings of the current issues of accounting and corporate reporting
practices, it has been find that the current accounting practices in the dynamic environment is
going through major challenges. The current accounting issues which are being faced these
days are harmonization of accounting, differences between the countries regarding
international accounting and convergence of the accounting (Peters & Romi, 2014).
However, apart from the above challenges faced by the accounting, it is being
analyzed that the company is strictly following the accounting standards. The changes in the
standards of the accounting are adopted by the company, whenever any changes are brought
in notice by the regulatory bodies. The company presents its financial information exactly
according to the relevance of the accounting standards (Maas, Schaltegger & Crutzen, 2016).
They summaries the disclosures of the financial information and other disclosures of the
performance of the company in order to comply with the Australian Accounting Standards as
well other required authoritative pronouncements (Schaltegger & Burritt, 2017). The nature
of company’s operations as well as principal activities of the company is shown in the report
of the director. The financial report of the company is based on the general-purpose financial
report that has been prepared according to the requirements of Australian Accounting
Standards, Corporation Act 2001 as well as other authoritative pronouncements of Australian
Accounting Standards Board (Bebbington & Larrinaga, 2014). The company prepares its
financial report based on historical cost, that is excepts to the listed equity investments and
the other financial instruments at the fair value. The presented financial report is in the
Australian dollars as well as all the values are rounded off to nearest thousand dollars that is
otherwise state, which is referred to the ASIC Corporation. Moreover, the financial report of
the company includes compliance with the Australian Accounting Standard as well as
International Accounting Standards Board (IASB) (Belal, 2016). The consolidated financial

20FINANCIAL PRINCIPLES AND THEORY
statements is based on the consolidated entity that comprises of Premier Investment limited
as well as its wholly owned subsidiaries at the end of every financial year. In addition, the
consolidated financial statements of the company need the management for making the
judgments, assumptions as well as estimates which affects the reported amount n financial
statements. The managements are responsible for continuously evaluating their judgments
and the estimates on the historical experiences as well as other factors that is believed to be
reasonable in the given circumstances (Martínez-Ferrero, Banerjee & García-Sánchez, 2016).
The presentations of the assets and the liabilities of the company in financial statement are
based on the classification of current versus non-current. Further, the adoption of the
accounting policies of the company is consistent with that of the last financial year that is
except in case of amended and new Australian Accounting Standard as well as relevance of
the AASB interpretations to the company and their business operations which are effective
for accounting policies adopted earlier during the annual reporting period of current and the
current annual reporting period (Stubbs & Higgins, 2014).
Therefore, by the research, it has been found that the status of the compliance of the
accounting policies and standards by the company follows the criteria of the representations
of financial statements faithfully by adhering to the accounting standards as per the
guidelines set by the regulatory. Even though the challenges faced by the regulator for the
differences, harmonization and convergence, the companies are still trying their level best for
adhering and adapting to the changes (Velte & Stawinoga, 2017).
Implications of Findings
The implication of the findings is that company should adhere to the accounting
standard of AASB. The accounting standard provides the guidelines that must be followed by
the company for the faithful representations of the financial position of the company
(Bebbington, Unerman & O’DWYER, 2014). The general purpose financial reporting helps

21FINANCIAL PRINCIPLES AND THEORY
the users for enhancing their decisions making. If the company follows the guidelines set by
the regulatory there would be less chance of materiality. Moreover, it will also help in serving
the needs of the stakeholders such as investors, employees, government and others (Özsözgün
Çalişkan, 2014).
Conclusion and Recommendations
Therefore, as the role of investigator for the Australian corporate regulator of the
Australian Securities and Investment Commission, it can be concluded from the analysis that
compliance and the applicability status of the Premier Investment Limited is justified. It is
because the company complies and applies the accounting standard specified by ASIC. In
addition, the complex issues of accounting involve differences n accounting, harmonization
as well as convergence which is very key issues of accounting standards that need to be
addressed for smooth functioning of the company’s operations and serving the needs to the
users. Moreover, the objectives of the general purpose financial reporting aims at providing
the well stated adhered accounting standards by the entities that can serves the needs and
purpose of the parties interested. This financial reporting plays the role of serving the social
and economical interest of the individual or the groups. Further, apart from the several
accounting issues the company follows the guidelines and the accounting standards such as
accounting of financial instrument, accounting of foreign currency transaction and foreign
exchange contracts as well as accounting of leases of AASB are adopted and applied by the
company, not only that the company also adopt to any of the changes in the accounting
standard if it is applicable for the company.
The recommendation that should be given should be harmonized and converged
accounting practices all over the world so that there would not be any differences among the
countries and the companies regarding the accounting practices.

22FINANCIAL PRINCIPLES AND THEORY
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Appendix
https://www.premierinvestments.com.au/wp-content/uploads/2018/10/2018-Annual-Report-
to-Shareholders.pdf