Comprehensive Report: Illuka Resources' Financial Reporting Compliance

This report provides a comprehensive analysis of Illuka Resources' financial reporting practices, focusing on the company's compliance with accounting standards and the conceptual framework. The report examines the measurement requirements, fundamental qualitative characteristics (relevance, comparability, verifiability, timeliness, and understandability), and how Illuka Resources adheres to them. It assesses whether users of financial reports, such as investors, lenders, and shareholders, can effectively utilize the reports to make informed decisions. The report also explores the knowledge required by users to analyze the company's financial position and evaluates whether Illuka Resources meets the requirements for general-purpose financial reporting, specifically referencing the Australian Accounting Standards Board (AASB). The report concludes with recommendations for improvement, such as the appointment of an auditor and periodical disclosure of financial statements, and emphasizes the importance of adopting various financial reporting techniques. The report highlights the significance of reliable financial reporting for attracting investors and ensuring the financial health of the organization.

REPORT OF ILLUKA
RESOURCES

TABLE OF CONTENTS
1. Compliance of company in relation with the measurement requirements of conceptual
framework....................................................................................................................................1
2. Fundamental qualitative characteristics...................................................................................1
3. Compliance of Illuka resources with enhancing the qualitative characteristics......................2
4. Are the users of financial reports able to use reports to make decisions?...............................2
5. Knowledge required by users for analysing company's financial position..............................3
6. Have they met the requirements for general purpose financial reporting?..............................3
RECOMMENDATION...................................................................................................................4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

1. Compliance of company in relation with the measurement requirements of conceptual
framework
There have been various guidelines and standard which were presented by the accounting
standard boards as well as reporting framework would be adequate for the businesses in relation
with having effective ascertainment over the operational practices. In relation with the
performance and activities governed by Illuka resources in the business activities on which
measuring each report in a summarized format would have positive impacts on managing the
business goals (Baudot, 2018). In accordance with the operational activities of IASB
measurement methods on which it can be said that, there has been measurement of various
financial statement which would manage cost and fair value of the transaction.
It can be said that, there have been measurement of several transaction which were being
transited in accounts throughout year (Hashim, Li and O’Hanlon, 2016). It includes the
accounting records to be made in various reports such as cash flow statement, statement of
change in equity as well as determination of various fair value as well as current market prices.
Moreover, in managing the business resources on which making a reliable ascertainment of
the operating activities would be effective as if businesses make appropriate disclosure of the
financial statement which would have impacts on delivering the best and reliable information
among the stakeholders of the firm.
2. Fundamental qualitative characteristics
There has been various qualitative characteristic which are required to be applicated by the
companies while disclosing the financial health of the organisation.
Relevance: It must be relevant with presenting the financial detail of the organisation
among the users of such information. However, in relation with such aspects it will affect in
better investment decisions made by users (Walton, 2018).
Comparability: There must be comparative analysis over time and information which
would have bene represented by organisation that helps the accounting professionals in effective
decision making (Kohler and Le Manh, 2018). On the basis of actual results must be compared
with the budgeted or estimated plan by professionals.
Verifiability: At the time of auditing all information were required to be verified by the
professionals as well as communicated adequately among the professionals in the right manner.
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There the verification of information would be effective for the organisation as this information
is creditable and reliable for the users which are performing activities in the business.
Timeliness: Presenting the financial information would be adequate in terms of regularly
disclosing the financial reports among the users (Masiello, Moscariello and Fera, 2018). It will
eb adequate for the users for effective decisions making and analysis over the market
requirements.
Understandability: each and every disclosure must reflect clear and understandable
information which would have positive impacts on developing the business goals for the entity at
the right time (Du, N., McEnroe and Stevens, 2016). Therefore, creating such transparency and
clearance in the reporting techniques would be effective in delivering the adequate information
among the users. Illuka Resources are required to bring the transparent, validate and clear
information among the audience which would make them able to analyse the profitability,
liquidity and efficiency of the business. However, this will be effective to them in investment
decisions.
3. Compliance of Illuka resources with enhancing the qualitative characteristics
To ascertain the financial performance of an entity on which it required that the firm must
have followed all the guidelines which are being presented by international standards and boards.
In the present report, there have been discussion based conceptual framework and its importance
in making the adequate financial reporting (Eisenschmidt and Krasodomska, 2017). However, in
this case Illuka resources have been examined with reference to have appropriate ascertainment
over financial reporting methods and analysis over the annual reports presented by the
organisation. However, there have been ascertainment of all the qualitative characteristics by the
organisation in the right manner.
4. Are the users of financial reports able to use reports to make decisions?
Investors, potential investors, lenders, other creditors etc. are major users of financial
reports of Illuka Resources (Baudot, 2018). They use these reports for taking their decisions
towards the company. Financial report shows the liquidity and profitability of the firm. With the
help of these data, lenders and other creditors can analyse the risk behind providing the company
funds on credit. They use these reports for evaluating the sum that should be provided to the
Illuka on credit basis.
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Shareholders are one of the key users of financial statements. Through analysis of
financial reports like profit and loss statements, balance sheet, trial balance, cash flow
statements, etc., they enable to detect the areas where the company is using their funds and
analyses the risk involved in the business as well (Dumay, 2016). With the help of these reports,
they can take decisions regarding maintaining, enhancing or reducing the shareholding in the
firm.
Moreover, with the help of balance sheet, its investors can determine liquidity of firm. It
would help them in taking decisions of a range of fund that is needed to be invested by them as
to gain the optimal return from business (Hashim, Li and O’Hanlon, 2016). Further, through
these statements, Illuka can also attract the potential investors by showing growth of business
through which they can get maximum return on their investment.
In this regard, it can be analysed that financial reports of Illuka are helping the users of
company in making their decisions.
5. Knowledge required by users for analysing company's financial position.
External users like investors, shareholders, lenders, etc. requires analysing the company's
liquidity and profitability. For this purpose, they are needed to evaluate their earning per share,
comparison of total assets over total liabilities, etc. which can be analysed by through just having
basic knowledge about accounting.
Although users like managers, board of directors, etc. that are needed to analyse the
financial reports in detail, cannot have a complete analysis through just basic knowledge (Leuz
and Wysocki, 2016). They are required to have in depth knowledge of accounting for the sake of
having a complete analysis of financial reporting.
6. Have they met the requirements for general purpose financial reporting?
While preparing the financial reporting, a company is needed to follow requirements of
country's accounting system. Further, a global business is also needed to comply with
International financial reporting standards along with standards of its native country's standards.
The Illuka is an Australian based company. It follows the requirements of Australian
Accounting standards while preparing its financial reports. Through the guidelines of Australian
accounting standard board (AASB), it enables to develop the financial reports in a standard
format (Bond, Govendir and Wells, 2016). Further, the guidelines provided by the AASB also
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leads in formation of the reports in such a way so that it could be prepared in such a way so that
it could reflect the actual position of company.
Moreover, follow up of these guidelines also prevents an organisation to eliminate
various errors from the financial reports and preparing them free from errors. By adopting each
clause and fulfil each requirement, the company can also maintain a standard format of the
financial reports through which these can be compared easily.
Preparation of reports, in a standard format, free from errors, comparability and reflecting
the actual position are some basic requirements for a general purpose financial reporting. As
these are being fulfilled by preparing financial reports as per the requirements of AASB, it can
be analysed that the financial reports of Illuka have been fulfilled all the general and basic
requirements.
RECOMMENDATION
As per analysing the outcomes stated in the report on which it would be suggested to the
professionals of Illuka Resources that they must have implication of various standards and
guidelines presented by International Accounting standard board in preparing and presenting the
financial reports. However, there have been several recommendations which would be effective
in managing the financial health of organisation such as:
 Appointing an auditor or accountant which would regularly being engaged in making
proper records of transactions.
 Periodical disclosure of the financial statements would be adequate for the business in
communicating the financial position of firm among the market.
 Analysing the profitability, liquidity and efficiency would be effective in generating large
number of investors to the firm.
CONCLUSION
On the basis of above report, it can be said that implicating various techniques and
operational motives would have implication of various financial reporting tools and techniques.
There has been recommendation awarded to the professionals of Illuka resources for implicating
the financial reporting techniques in presenting a reliable financial report.
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REFERENCES
Books and Journals
Baudot, L., 2018. On Commitment Toward Knowledge Templates in Global Standard Setting:
The Case of the FASB‐IASB Revenue Project. Contemporary Accounting
Research. 35(2). pp.657-695.
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.
Du, N., McEnroe, J. E. and Stevens, K., 2016. Why isn't comprehensive income
comprehensible? The FASB and the IASB have made headway in dealing with OCI
issues, but it's time to establish conceptual definitions. Strategic Finance. 98(5). pp.46-
54.
Dumay, J., 2016. A critical reflection on the future of intellectual capital: from reporting to
disclosure. Journal of Intellectual capital. 17(1). pp.168-184.
Eisenschmidt, K. and Krasodomska, J., 2017. Insights into the IASB due process: the influence
of country characteristics on constituents’ formal participation. Zeszyty Teoretyczne
Rachunkowości, (95 (151)), pp.117-145.
Hashim, N., Li, W. and O’Hanlon, J., 2016. Expected-loss-based accounting for impairment of
financial instruments: The FASB and IASB proposals 2009–2016. Accounting in
Europe. 13(2). pp.229-267.
Kohler, H. and Le Manh, A., 2018. An analysis of the contribution of the telecommunications
sector to the IASB due process with reference to actor-network theory. Comptabilité-
Contrôle-Audit. 24(1). pp.43-79.
Leuz, C. and Wysocki, P. D., 2016. The economics of disclosure and financial reporting
regulation: Evidence and suggestions for future research. Journal of Accounting
Research. 54(2). pp.525-622.
Masiello, B., Moscariello, N. and Fera, P., 2018. Political Marketing Strategies to Foster the
Sustainability of Private Transnational Organisations: The Case of the
IASB. Sustainability. 10(8). p.2652.
Walton, P., 2018. Discussion of Barker and Teixeira ([2018]. Gaps in the IFRS Conceptual
Framework. Accounting in Europe, 15) and Van Mourik and Katsuo ([2018]. Profit or
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loss in the IASB Conceptual Framework. Accounting in Europe, 15). Accounting in
Europe. 15(2). pp.193-199.
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