Financial Reporting Disclosures in Australian Corporate Sector Report

This report provides a detailed analysis of financial reporting disclosures within the Australian corporate sector, focusing on the application of AASB 116 and the identification of relevant qualitative characteristics as per the Conceptual Framework for Financial Reporting. The report examines the financial statements of Monash Ivf Group Limited, assessing their compliance with accounting standards, particularly regarding depreciation methods and the treatment of agricultural bearer plants. It identifies relevance and understandability as key qualitative characteristics and evaluates how the company meets these criteria through its disclosures. The report also discusses areas for improvement, such as incorporating materiality aspects and enhancing comparability. The analysis includes an overview of the primary users of General Purpose Financial Reporting (GPFR) and the rationale behind it, providing a comprehensive view of the financial reporting landscape in Australia.

Running head: FINANCIAL REPORTING DISCLOSURES IN THE AUSTRALIAN
CORPORATE SECTOR
Financial Reporting Disclosures in the Australian Corporate Sector
Name of Student:
Name of University:
Author’s Note:

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Table of Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................3
Body.................................................................................................................................................3
Answer to Part A.........................................................................................................................3
Answer to Part B..........................................................................................................................4
Answer to Part C..........................................................................................................................5
Answer to Part D.........................................................................................................................6
Conclusion.......................................................................................................................................7
Reference list...................................................................................................................................8
List of Appendix..............................................................................................................................9
Appendix 1...................................................................................................................................9
Appendix 2...................................................................................................................................9

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Executive summary
The report is intended to state on the qualitative characteristics mentioned as per “General
Purpose Financial Reporting (GPFR)”. In order to perform the analysis, Monash Ivf Group
Limited has been selected. Based on QC-1 to QC-39 some of the fundamental qualitative
characteristics as for the conceptual framework has been identified in terms of relevance,
materiality, faithful representation, verifiability, timeliness, understandability and consideration
of cost constraint. “Monash Ivf Group Limited” published in the year 2016, it has been discerned
that the clarification for the acceptable method of depreciation and amortisation are done based
on “Amendments to AASB 116 and AASB 138”. Another important application of
“Amendments to AASB 116 and AASB 141” has been evident with agricultural bearer plants.
Among the several types of “qualitative characteristics” useful for financial information as per
conceptual framework for financial reporting, “relevance” and “understandability” has been
identified as the two main “qualitative characteristics for “Monash Ivf Group Limited”. The
company has been able to recognise the PPE values in the balance sheet with utmost “relevance”
to the prescribed guidelines. It has been further able to identify the percentage change in property
expenses for both present and previous financial year. The “understandability” factor has been
covered with concisely segregating the PPE values for the present and previous year in the
annual report. The “understandability” aspect has been duly maintained by clearly stating about
the contractual commitment for the acquisition of PPE.The company needs to take several
improvements which are associated to improve the financial reporting by including the scope
base types of materiality aspects in the financial report.

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Introduction
The report is aimed to highlight on the main users of “General Purpose Financial
Reporting (GPFR)” along with the rationale for the same. It also defines the qualitative
characteristics mentioned as per the standard. The next section of the report has anyone related to
what extent the latest and will report for a company listed under ASX 300 Index has been able to
meet the criteria for disclosure requirement for “AASB 116”. It has been particularly ensured
that the company is having 30th June as the year-end. In order to perform the analysis, Monash
Ivf Group Limited has been selected. Based on the analysis on the disclosures compliance the
report has been able to suggest on two qualitative enhancing characteristics for the selected
company. The latter part of the report has been able to critically discuss on the disclosures on
meeting the PPE criteria for the primary users.
Body
Answer to Part A
Citizens of a country are identified as the primary users of GPFRs. The legislature or a
alike body along with Parliament member or alike representatives are also considered as an
important user for GPFR. Citizens are regarded as primary users of GPFR as they receive and
provide service at the same time to the government and other public sector entities, henceforth
they need to rely on GPFRs for the necessary information which aides in decision-making
purposes and accountability (Cnc.min-financas.pt. 2017).
As per OB 5 to OB 10, the “qualitative characteristics” of functional information as per
the “Conceptual Framework for Financial Reporting” states that several existing potential

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investors and lenders along with additional creditors cannot require the reporting entities for
providing information directly to them and should consistently rely on the requirements for
general purpose reports. Based on QC-1 to QC-39 some of the fundamental qualitative
characteristics as for the conceptual framework has been identified in terms of relevance,
materiality, faithful representation, verifiability, timeliness, understandability and consideration
of cost constraint. The same has been represented in the “Appendix 1” of the study. The faithful
representation aspect of the financial information has been identified in terms of potential to
make a difference in decisions depiction of complete, neutral and error free report. The main
objective of the board has been seen in terms of maximising the quality as much as possible
(Fasb.org. 2017).
Answer to Part B
Based on the depiction of annual report of “Monash Ivf Group Limited” published in the
year 2016, it has been discerned that the clarification for the acceptable method of depreciation
and amortisation are done based on “Amendments to AASB 116 and AASB 138”. Another
important application of “Amendments to AASB 116 and AASB 141” has been evident with
agricultural bearer plants.
Under “Section 30” of “AASB 116” (Cost model), the measurement of recognition under
the cost model states that after recognising an asset such as PPE, the total amount should be
carried as per the cost less any accumulated reduction and impairment losses. In a similar way,
“Monash Ivf Group Limited” has performed the key estimate and judgement for equipment by
depreciating/amortising over its useful economic life. In addition to this, the depreciation amount
has been substituted for cost, less its residual value. The depreciation method for the company
has been further identified with profit or loss on “straight-line basis” over the estimated useful

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life of PPE. This is indirectly seen in terms of compliance with depreciation method stated under
“Section 62” of “AASB 116” (Annualreport2016.monashivfgroup.com.au 2017).
In addition to this, the company has duly complied with “Section 3b” of “AASB 116”
which is associated to biological assets linked with agricultural activity. Similarly, the company
is clearly stated that its agricultural bearer plants are in compliance with Amendments to “AASB
116” and “AASB 141”. The aforementioned findings have been clearly presented in “Appendix
2” section of the study (Deegan 2013).
Answer to Part C
Among the several types of “qualitative characteristics” useful for financial information
as per “conceptual framework for financial reporting”, “relevance” and “understandability” has
been identified as the two main qualitative characteristics for “Monash Ivf Group Limited”.
The adherence to “relevance” quality characteristics for the company has been evident in
operating segment, taxation, earnings per share and dividends. The segment EBITDA has been
able to measure the performance with most relevant results of segments in relation to the entities
which operates in the industry of healthcare. In addition to this, the segmented PBT has been
incorporated in the internal management and duly reviewed by Group’s CODM. It has been used
as a measure of performance as the management is of the notion that such information in
evaluating the financial result is relevant to their respective segments in relation to various types
of other entities which are operating in the same industry. The impairment testing for the amount
to be recovered has been estimated to be high than the usual carrying amount and responsible for
relevant assumption with reasonable possible change to the relevant inputs and such input shall
not result in any recoverable amount being lesser than the actual amount of carrying. The

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company has been further observed to adhere to long-term obligations with relevant market
changes for the corporate bonds which are having graduated eighth approximating the terms of
obligation of the group. Therefore, it can be clearly seen that the financial information has the
capability of making a difference in decisions made by users. It has been further observed that
the information published by the company has confirmatory value and predictive value which
directly complies with “relevance” quality aspect under QC 6 to QC 10 duly stated in
“Conceptual Framework for Financial Reporting” (Cheng et al. 2014).
The “understandability” quality aspect has been duly maintained by the group through the
organising the notes to the financial statements into several sections which will help the users in
better understanding the performance of the group. In addition to this, the changes proposed by
the group has been able to provide the users with a clearer understanding for the factors which
drive the financial performance, financial position for the group thereby suggesting on better
alignment of group strategy and complying with the provisions of “Corporations Act 2001”.
Therefore, it can be said that the company is able to classify, characterise and present the
information in a clear and concise manner which makes it understandable to the user. In addition
to this the financial reports have been prepared even for users having a reasonable knowledge of
economic and business activities. Due to the aforementioned factors it can be stated that is able
to adhere to “understandability” quality as per conceptual framework (Abeysekera 2013).
Answer to Part D
The company has been able to recognise the PPE values in the balance sheet with utmost
“relevance” to the prescribed guidelines. It has been further able to identify the percentage
change in property expenses for both present and previous financial year. The relevant values for

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the payments for “property plant and equipment” have been duly noted in the “net cash flows
generated from the operating activities” (McNeil, Frey and Embrechts 2015).
The important “understandability” factor has been covered with concisely segregating the
PPE values for the present and previous year in the annual report. The “understandability” aspect
has been duly maintained by clearly stating about the contractual commitment for the acquisition
of PPE. In 30 June 2016, the parent entity of Monash Group was not seen to have any capital
commitment associated to acquisition of PPE (Wahlen, Baginski and Bradshaw 2014).
Conclusion
The company needs to take several improvements which are associated to improve the
financial reporting by including the scope base types of materiality aspects in the financial
report. There is also no cost constraint on useful financial reporting which has been provided in
the financial report. It has been further seen that that there has been several drawbacks associated
to comparability aspect of the financial reporting which should have been shown with the
changes adopted along with eye of IFRS.

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Reference list
Abeysekera, I., 2013. A template for integrated reporting. Journal of Intellectual Capital, 14(2),
pp.227-245.
Annualreport2016.monashivfgroup.com.au. (2017). AnnualReport. [online] Available at:
http://annualreport2016.monashivfgroup.com.au/ [Accessed 30 Sep. 2017].
Cheng, M., Green, W., Conradie, P., Konishi, N. and Romi, A., 2014. The international
integrated reporting framework: key issues and future research opportunities. Journal of
International Financial Management & Accounting, 25(1), pp.90-119.
Cnc.min-financas.pt. (2017). [online] Available at:
http://www.cnc.min-financas.pt/pdf/IPSAS_Janeiro_2013.pdf [Accessed 30 Sep. 2017].
Deegan, C., 2013. Financial accounting theory. McGraw-Hill Education Australia.
Fasb.org. (2017). [online] Available at: http://www.fasb.org/resources/ccurl/515/412/Concepts
%20Statement%20No%208.pdf [Accessed 30 Sep. 2017].
McNeil, A.J., Frey, R. and Embrechts, P., 2015. Quantitative risk management: Concepts,
techniques and tools. Princeton university press.
Wahlen, J., Baginski, S. and Bradshaw, M., 2014. Financial reporting, financial statement
analysis and valuation. Nelson Education.

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List of Appendix
Appendix 1
Appendix 2

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