Financial Reporting Analysis: AASB Standards and Intangible Assets

This report provides an overview of financial reporting in Australia, focusing on the role of the Australian Accounting Standards Board (AASB). It discusses several key AASB standards, including AASB 101 (Presentation of Financial Statements), AASB 138 (Intangible Assets), AASB 119 (Employee Benefits), and AASB 15 (Revenue from Contracts with Customers). The report explains how these standards contribute to the comparability and reliability of financial statements, ensuring that investors and other stakeholders can make informed economic decisions. It examines the characteristics of intangible assets, their recognition criteria, measurement, and amortization. The report highlights the importance of these standards in providing a true and fair view of a company's financial position and performance, ultimately aiding in investment decisions.

Financial Reporting

Contents
Financial Reporting.........................................................................................................................1
Introduction......................................................................................................................................3
Main body........................................................................................................................................3
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

Introduction
The Australian accounting standard board is one of the wholly owned government department
that help in developing and maintaining financial reporting in the country for different entities.
The AASB helps in contributing and development of financial reporting standard and also helps
in facilitating the disclosure objectives of the business house in the country. the powers and the
functions of the AASB are considered to be set in the Australian Securities and the investment
commission act, 2001. The board has developed different standards for the purpose of
identifying the different accounting requirements of the corporation (Bond, et. al., 2016). The
standards that are developed by the board helps the investors of the investors to find the company
that is most financially stable and holds the accounting reputation among the group of members.
Main body
To solve the issue one of the most important standards that is formulated by the accounting board
of the country which includes the AASB standard 101, it is one of the most important forms of
the accounting standard that is required by the company. This standard form the part of the
financial statement under sections 334 through the corporation’s act 2001. This is the standard
that helps in prescribing the method for the presentation of the financial statement of the
corporation so as to ensure the comparability among the different financial statements of the
organisation from the previous periods. This also helps in making the comparison between the
other business enterprise so that better understanding can be made and investors in the company
can make the best decision for the purpose of making investment in the company. this helps in
formulation of the financial statements and specifying the guidelines through which minimum
requirements of the contents are captured for this purpose (Davern, et. al., 2019).
As specified by the board the financial statements are the representation of the financial position
and financial performance of the corporations. This is considered that the objective of the
financial statement is to provide the information about the financial position, performance and
the cash flow of the company so that economic decision can be taken by the investors of the
company. this also helps in getting the insight into the management stewardship which is
entrusted in the company. the financial statement of the company provides various information
about the company’s assets which includes the assets, liabilities, equity, income and expenses,
contribution and the cash flows of the company as these are the main and the elements through

which the economic value of the company can be identified for this purpose. the information that
is provided in the financial statement of the company along with the notes, assists the users of the
financial statement so as to identify the future cash flow of the company. This helps in making
the economic decision to the entity and through this they are able to maximise the investment
opportunity of the company (Handley, et. al., 2019).
Also, one of the accounting standards that is specified by the AASB standard 138 includes the
valuation of the intangible assets of the company through which they are able to maximise the
performance of the company. This standard is identified by the accounting standard board which
for the purpose of identifying the intangible assets and the value of the assets in the company’s
balance sheet. This standard provides an entity to identify and recognise the intangible assets in
their balance sheet if the specified criteria are followed. The standard also helps in measuring the
carrying amount of the intangible assets through which the investment decision can be made by
the users of the report. As through this standard the value and the class of assets that the
company has can be tested by the users and hence this, in turn, helps in getting the return to the
investors as they are able to make the economic and valuable decision so as to maximise the
performance. As there are various users of the financial reports of the company and hence this is
important for them to identify the reporting and the fair integration of the financial performance
of the company. It is considered that as the employees of the company, creditors of the company,
government, competitors and various other stakeholders are related to the acts that are performed
by the company. Hence these standard helps in planning and taking the economic decision that is
related to the company and through this the best return on the investment can be made by the
investors of the company (He, et. al., 2016).
As one of the stakeholders which include the employees of the company the board has made the
AASB standard 119 which helps in creating the employee benefits. The objective of this
standard includes that it helps in prescribing the accounting and disclosure for the employee’s
benefits. Through this it must be considered by the company that a liability has occurred where
the employee has provided the benefit in exchange of the monetary consideration which has to
be paid in future by the company. this is seen that an expense is considered to be made by the
entity where economic benefit arises to them in exchange for the services that are provided by
the employees of the company. hence if the company is providing the best services to the
employees of the company then it would lead to a more and better product which is better for the

investment. hence this is one of the most important for standard that helps in making the most
prominent decision in the company (Joubert, et. al., 2017).
For the purpose of making the economic decision so as to maximise the investment that is made
in the company. hence for this purpose the revenue from the contracts with the customers are
defined in the AASB standard 15, which plays one of the most important roles as revenue is one
of the most important parts of the company on which the company is dependent. The growth of
the company is based on the revenue that it generates. Hence for the purpose of making it
standard the board identified the revenue recognition as an accounting standard. Here this is
necessary that the entity must follow the principles through which they would report the revenue
and the information in the financial statement. This is necessary as most of the economic
decision that is made by the investors and the stakeholders is based on the revenue of the firm. If
the revenue of the firm is growing then there are huge chances of getting investment in the
company. This is seen that the users of the financial statements are more encouraged to get the
information about the revenue of the company as this helps them to make the economic decision
regarding the investment in the company (Zhuang, 2016).
Conclusion
Hence, this is important for the companies to identify the required standards that help in
disclosure of the financial assets in the best possible manner. If the financial report of the
company is disclosing the true and fair value of affairs than it would help the company to raise a
huge investment for them. also, the stakeholders and the investors in the market would get
benefit as they would be able to compare the financial report of two companies simultaneously
so as to make the profit.

References
Bond, D., Govendir, B., & Wells, P. (2016). An evaluation of asset impairment decisions by
Australian firms and whether this was impacted by AASB 136.
Davern, M., Gyles, N., Potter, B., & Yang, V. (2019). Implementing AASB 15 revenue from
contracts with customers: the preparer perspective. Accounting Research Journal, (just-
accepted), 00-00.
Handley, K., Evans, E., & Wright, S. (2019). Understanding participation in accounting
standard‐setting: the case of AASB ED 192 Revised Differential Reporting
Framework. Accounting & Finance. `
He, L., Evans, E., & He, R. (2016). The impact of AASB 8 operating segments on analysts’
earnings forecasts: Australian evidence. Australian Accounting Review, 26(4), 330-340.
Joubert, M., Garvie, L., & Parle, G. (2017). Implications of the New Accounting Standard for
Leases AASB 16 (IFRS 16) with the Inclusion of Operating Leases in the Balance Sheet. The
Journal of New Business Ideas & Trends, 15(2), 1-11.
Zhuang, Z. (2016). Discussion of ‘An evaluation of asset impairments by Australian firms and
whether they were impacted by AASB 136’. Accounting & Finance, 56(1), 289-294.