Origin Energy and the Conceptual Framework: A Detailed Report

This report assesses Origin Energy Private Limited's conformance with the conceptual framework for financial reporting, focusing on the objectives, recognition criteria, and qualitative characteristics outlined by the AASB. The analysis reveals that Origin Energy adheres to the Corporations Act 2001, AASB, and IFRS, ensuring valuable financial information is delivered to users. The company appropriately recognizes assets, liabilities, equity, revenue, and expenses, providing transparent and faithful representation in its financial statements, which are audited by KPMG. Origin Energy's practices support comparability, verifiability, timeliness, and understandability, ensuring stakeholders receive a clear overview of the organization's financial performance and market position. The report concludes that Origin Energy effectively follows the guidelines and regulations set forth in the conceptual framework, reinforcing trust among users and stakeholders.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
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Abstract:
The conceptual framework has a significant role to play for managing the financial
aspects of the organisations. Origin Energy Private Limited is chosen as the firm, which is one of
the leading integrated energy firms in Australia. The firm concentrates on exploration and
production of oil and gas, energy retailing and power generation. This report would assess the
conformance of Origin Energy in association with the conceptual framework. It has been
assessed that the organisation has adhered to all the recognition criteria of the conceptual
framework for financial reporting purpose. In case of Origin Energy, the balance sheet statement
is developed in such a manner that it helps the users to obtain crucial information about its
economic resources, while conforming to the necessary regulations as laid out in AASB.

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Table of Contents
Introduction:....................................................................................................................................3
Achieving the conceptual framework objectives:............................................................................3
Achieving the criteria of recognition of the conceptual framework:...............................................8
Assets:..........................................................................................................................................8
Liabilities:..................................................................................................................................10
Equity:........................................................................................................................................12
Revenue:....................................................................................................................................12
Expense:.....................................................................................................................................12
Achieving the qualitative characteristics of the conceptual framework:.......................................13
Conclusion:....................................................................................................................................15
References:....................................................................................................................................17

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Introduction:
In order to prepare the financial statements, the conceptual framework related to financial
reporting is significant for the business organisations in the recent times. This is because it
delivers considerable course of action along with the techniques and principles needed to
develop the financial reports (Barth 2015). Along with this, the conceptual framework could help
in resolving various issues of the business organisations. Hence, the conceptual framework has a
significant role to play for managing the financial aspects of the organisations.
In order to meet the requirements of financial reporting, this framework was initiated on
the part of “International Accounting Standard Board (IASB)” in 1989. Hence, it would focus on
examining the adherence related to recognition criteria, goals and qualitative characteristics of
the framework. For enhancing the overall report quality, Origin Energy Private Limited is chosen
as the firm, which is one of the leading integrated energy firms in Australia. The firm
concentrates on exploration and production of oil and gas, energy retailing and power generation.
It is included in the top ASX 100 corporations having ASX code of ORG (Originenergy.com.au
2018). Thus, this report would assess the conformance of Origin Energy in association with the
conceptual framework.
Achieving the conceptual framework objectives:
As stated above, conceptual framework is highly significant in order to look after the
aspects of the firms. The annual report of Origin Energy depicts that all the conceptual
framework aspects are followed in this case. According to its recent annual report of 2017, the

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principles that are laid out in “Corporations Act 2001” and “Australian Accounting Standards
Board (AASB)” are enforced for general purpose financial reporting.
Along with this, the consolidated financial statements are developed based on the
principles and standards of “International Financial Reporting Standards (IFRS)” and
“International Accounting Standard Board (IASB)”. Thus, the firm conforms completely to the
regulations in the IFRS conceptual framework. In order to comply with this framework, it is
necessary for an organisation to satisfy three particular objectives. Such objectives and the
degree to which Origin Energy conforms to them are illustrated briefly as follows:
Valuable financial information:
The conceptual framework wants each business organisation to be responsible for
delivering beneficial and meaningful financial information to the users for aiding in the decision-
making procedure (Birt, Muthusamy and Bir 2017). The annual report assessment of Origin
Energy states that timely necessary information is delivered to the users via the financial
statements. The primary financial statements of the companies constitute of profit and loss
statement, cash flow statement and balance sheet statement (Cordery and Sinclair 2016). In
addition to this, the notes to accounts are represented in the annual report, which enable the users
to obtain useful information.
Evaluation of amount, timing and uncertainties:
It is necessary to provide beneficial information to the users for analysing amount, timing
and uncertainties that revolve around the cash flows of the organisation (Filip et al. 2017).

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Information regarding organisational resources:
All the organisations should disclose vital information regarding their organisational
resources for aiding in the process of decision-making for their users. In case of Origin Energy,
the balance sheet statement is developed in such a manner that it helps the users to obtain crucial

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information about its economic resources, while conforming to the necessary regulations as laid
out in AASB.

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Based on the information evaluated above, it is highly evident that Origin Energy has
satisfied all the objectives, which are stated in the conceptual framework related to financial
reporting.
Achieving the criteria of recognition of the conceptual framework:
Under the conceptual framework related to financial reporting, it is mandatory for the
corporate entities to comply with the recognition criteria related to revenues, assets, expenses,
liabilities and equity. From another perspective, it is necessary for them to meet three basic
criteria. The initial criterion is to present an overview of the financial aspects having relevant
information. The second criterion is that the financial aspects are required to be represented
faithfully. The final criterion is to increase the usefulness of these aspects for the users. These
criteria are evaluated in the context of Origin Energy to determine its compliance with the
conceptual framework and they are summarised as follows:
Assets:
It is obvious that an organisation tends to possess certain classes of assets. One of these
assets in case of Origin Energy is property, plant and equipment, which is revealed in the annual
report after depreciation is deducted from the cost of the asset. This asset cost is recognised only;
in case, the organisation expects future benefits from the same.

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In case of intangible assets of Origin Energy, impairment is charged on them. The
impairment loss is recognised on the carrying values of the various asset classes. The economic
lives of the intangible assets of the organisation are different, which do not need amortisation to
be charged on them (Hodgson and Russell 2014).

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Liabilities:
Origin Energy has different types of liabilities, which could be observed from its annual
report. It recognises the deferred tax liabilities depending on the differences in the rate of tax.
In relation to contingent liabilities, the main items that are considered in case of Origin
Energy constitute of guarantees, joint arrangements, capital expenditure along with legal and
regulatory environment. According to the management perspective of Origin Energy, the
organisation does not require any sort of provision for these obligations due to the lower
likelihood that economic benefits would be flown away in future or unreliable measurement of
amount (Holland 2016).

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