Financial Report Analysis: Contemporary Accounting Issues in Australia

This report provides a comparative analysis of the accounting practices of Telstra Corporation and Amaysim Australia Limited, focusing on their compliance with the IFRS and AASB conceptual frameworks. The analysis includes a review of their annual reports, treatment of assets (tangible and intangible), depreciation methods, and the content of their Annual General Meeting (AGM) and Director's reports. The report highlights key differences in asset valuation, depreciation policies, and financial reporting practices between the two companies. It also addresses specific issues related to the application of IFRS and AASB standards in their accounting practices, including the challenges and limitations of these frameworks, providing a comprehensive overview of their financial reporting strategies and the implications for stakeholders. The report uses financial data from 2015 and 2016 to illustrate the differences in financial performance and asset management between the two companies.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary issues in accounting
Name of the student
Name of the university
Author note

1CONTEMPORARY ISSUES IN ACCOUNTING
Executive summary
This report will focus on the importance of IFRS and AASB conceptual framework on the
accounting and financial statement of Telstra Corporation and Amaysim Australia Limited. It
will also focus on the treatment of assets, method of depreciation of the company. Further,
the report will concentrate on the AGM of the companies, Director’s reports of the companies
and the issue associated with the IFRS and AASB in accounting.

2CONTEMPORARY ISSUES IN ACCOUNTING
Table of Contents
Introduction................................................................................................................................3
Analysis......................................................................................................................................4
Annual reports and its compliance with AASB conceptual framework....................................4
Total assets.................................................................................................................................5
Tangible asset.............................................................................................................................5
Intangible assets.........................................................................................................................6
Treatment of assets.....................................................................................................................7
Depreciation...............................................................................................................................8
Treatment of assets.....................................................................................................................8
Depreciation...............................................................................................................................9
AGM report..............................................................................................................................10
Director’s report and closing statements..................................................................................10
Issues in accounting with regard to IFRS and AASB..............................................................11
Conclusion................................................................................................................................12
Reference..................................................................................................................................13

3CONTEMPORARY ISSUES IN ACCOUNTING
Introduction
Telstra is one of the leading technologies and Telecommunication Company from
Australia that offers full range of services related to telecommunication sector and competes
with all the other telecommunication companies. They deliver services to more than 17
million mobile services, 3.5 million retail services for broadband and 6.8 million services to
fixed voices. They believe that more the people are connected, more opportunities they will
have. Therefore, they are assisting in creating the exceptional connectivity for everyone.
They believe in content and technology solutions which are easy and simple to use and are
valued by the customers. They always focus on serving and knowing the preference of the
customers better as compared to others. As the leading information and Telecommunication
Company from Australia, Telstra always provides a helping hand towards their customer to
improve their living standard through better connectivity (Telstra.com.au, 2017).
On the other hand, Amaysim is the telecommunication company that is focussed on
providing the telecommunication services and make the home internet and mobile experience
of the customers with exceptionally simple through solving the unnecessary issues and letting
the customers to get the superfast speed at pocket-friendly price. They believe in providing
the services in such a way that the customers will have minimum number of complaints with
regard to the telecommunication services. They are confident that at least 93% of their
customers will tell their loved ones or mate regarding the exceptional good services of the
company. Further, they believe in no lock-in contacts that mean if the customers with
Amaysim it is just because they want to be with the company and not because they are forced
to be with the company (Amaysim.com.au, 2017).

4CONTEMPORARY ISSUES IN ACCOUNTING
Analysis
Annual reports and its compliance with AASB conceptual framework
From the Financial statement of Telstra it is recognised that the financial report of the
company is a general purpose financial report and is prepared by the profit entity as per the
requirements of the Australian Corporation Act 2001, the Accounting Standards those are
applicable in Australia and other conceptual framework and interpretation of AASB
(Australian Accounting Standard Board) and also complies with the IFRS (International
Financial Reporting Standards) and the interpretations issued by the IASB (International
Accounting Standards Board) (Kober, Lee & Ng, 2013). Further, the report is prepared in
Australian Dollars unless it is stated otherwise and the value are rounded off to nearest
million dollars ($m) under the available option of ASIC. The historical balue approach is
used for preparation of the statements except for some financial instruments those are
transacted at fair values.
On the other hand, in the way like Telstra, Amysim’s financial report is also a general
purpose financial report that is prepared by the profit entity as per the requirements of the
Australian Corporation Act 2001, the Accounting Standards those are applicable in Australia
and other conceptual framework and interpretation of AASB (Australian Accounting
Standard Board) and also complies with the IFRS (International Financial Reporting
Standards) and the interpretations issued by the IASB (International Accounting Standards
Board). Further, the report is prepared in Australian Dollars unless it is stated otherwise and
the value are rounded off to nearest thousand dollars ($’000) under the available option of
ASIC. The historical value approach is used for preparation of the statements except for some
financial instruments those are transacted at fair values.

5CONTEMPORARY ISSUES IN ACCOUNTING
Total assets
Telstra Corporation
Limited
Amaysim Australia Limited
2015 ($
Million)
2016 ($
Million)
2015 ($
Million)
2016 ($
Million)
Total assets 40445 43286 53 117
Table 1: Total assets of Testra and Amaysim
(Source: Created by Author)
Total assets
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
40445 43286
53 117
Total assets
Telstra Corporation
Limited 2015 ($ Million)
Telstra Corporation
Limited 2016 ($ Million)
Amaysim Australia
Limited 2015 ($ Million)
Amaysim Australia
Limited 2016 ($ Million)
Graph 1: Total assets of Testra and Amaysim
(Source: Created by Author)
It can be identified from the above table that for both 2015 and 2016 the total asset of
Telstra is significantly higher as compared to that of Amaysim. It can be said that Amaysim
does not have enough savings to purchase the assets or invest in the assets.
Tangible asset
Telstra Corporation
Limited
Amaysim Australia Limited
2015 ($
Million)
2016 ($
Million)
2015 ($
Million)
2016 ($
Million)

6CONTEMPORARY ISSUES IN ACCOUNTING
Tangible assets 20450 20581 0.6 1.0
Table 2: Tangible assets of Testra and Amaysim
(Source: Created by Author)
Tangible assets
0
5000
10000
15000
20000
25000
20450 20581
0.6 1.0
Tangible assets
Telstra Corporation
Limited 2015 ($ Million)
Telstra Corporation
Limited 2016 ($ Million)
Amaysim Australia
Limited 2015 ($ Million)
Amaysim Australia
Limited 2016 ($ Million)
Graph 2: Tangible assets of Testra and Amaysim
(Source: Created by Author)
It can be identified from the above table that for both 2015 and 2016 the tangible asset
of Telstra is significantly higher as compared to that of Amaysim. It can be said that
Amaysim does not have enough savings to acquire the tangible assets or invest in the assets.
Intangible assets
Telstra Corporation
Limited
Amaysim Australia Limited
2015 ($
Million)
2016 ($
Million)
2015 ($
Million)
2016 ($
Million)
Intangible assets 9332 9229 77 8
Table 3: Intangible assets of Testra and Amaysim

7CONTEMPORARY ISSUES IN ACCOUNTING
(Source: Created by Author)
Intangible assets
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000 9332 9229
77 8
Intangible assets
Telstra Corporation
Limited 2015 ($ Million)
Telstra Corporation
Limited 2016 ($ Million)
Amaysim Australia
Limited 2015 ($ Million)
Amaysim Australia
Limited 2016 ($ Million)
Table 3: Intangible assets of Testra and Amaysim
(Source: Created by Author)
It can be identified from the above table that for both 2015 and 2016 the intangible
asset of Telstra is significantly higher as compared to that of Amaysim. It can be said that
Amaysim does not have enough savings to acquire the intangible assets or invest in the
assets.
Treatment of assets
The assets of Telstra like plant property and equipments including the the construction
under progress are transacted at cost after deducting the impairment and depreciation.
Further, the cost involves the purchase costs and the costs that are directly attributable for
bringing the assets to the condition and location required for the intended use (Kent and
Zunker, 2015). The borrowing costs are capitalised that are attributable to production,

8CONTEMPORARY ISSUES IN ACCOUNTING
acquisition or construction directly. All the other borrowing costs are identified as the
expenses under the income statement at the time of incurring.
Depreciation
Telstra provide depreciation for the plant, property and equipment including the
leasehold property and building and excluding the freehold on straight line method under the
income statement and the depreciation are provided for the useful estimated life of the assets.
Further, the assets are started depreciated only after the assets are installed and are ready to
use. The useful lives of the significant assets like equipment, plant and property are shown as
below –
For estimating the residual values and useful lives of the assets the company apply
their management judgment. If the useful life or the residual lives are to be modified the
expenses of depreciation is to be changed from the date of the reassessment and till the
revised useful life of the asset.
Treatment of assets
The assets of Amaysim like plant property and equipments including the the
construction under progress are transacted at historical cost after deducting the impairment
and depreciation. Historical costs involves the cost spend for purchasing the asset and the
costs that are directly attributable for bringing the assets to the condition and location
required for the intended use. Subsequent costs are taken into account under the carrying

9CONTEMPORARY ISSUES IN ACCOUNTING
amount or are recognized as separate cost only in the circumstance where it is likely that the
future economic advantages will flow to the company with regard to the asset and the
associated costs can be reliably measured. The borrowing costs are capitalised that are
attributable to production, acquisition or construction directly. All the other borrowing costs
are identified as the expenses under the income statement at the time of incurring.
Depreciation
Amaysim provide depreciation for the plant, property and equipment including the
leasehold property and building and excluding the freehold on straight line method under the
income statement and the depreciation are provided for the useful estimated life of the assets
(Bonner, 2015). Further, the assets are started depreciated only after the assets are installed
and are ready to use. The useful lives of the significant assets like equipment, plant and
property are shown as below –
For estimating the residual values and useful lives of the assets the company apply
their management judgment. If the useful life or the residual lives are to be modified the
expenses of depreciation is to be changed from the date of the reassessment and till the
revised useful life of the asset (He, Evans & He, 2016). Further, 4 types of intangible assets
that are recognized by the company are – goodwill, software development, customer lists and
brand or trademarks.

10CONTEMPORARY ISSUES IN ACCOUNTING
AGM report
The AGM of Telstra for the year 2016 was held on 11th October 2016, Tuesday at
Grand Ballroom, Four Points By Sheraton (Darling Harbour), 161 Sussex Street, Sydney
NSW. The meeting was held as per the listing Rule of 3.13.2 and the section 251AA (2) of
Corporation Act. At the AGM o the company the following points were discussed –
 Re-election and election of the directors
 Grant for performance rights
 Adoption of remuneration report
On the other hand, the AGM of Amaysim was held on 17th November 2016 at the
Market Announcement Office, Australian Securities Exchange, 20 Bridge Street, Sydney
NSW 2000. The meeting was held as per the listing Rule of 3.13.2 and the section 251AA (2)
of Corporation Act. At the AGM o the company the following points were discussed –
 Summarize the performance of the company for the financial year 2016
 Provide the overview for their strategies and the business model and to explain the
reasons that setting them apart from their competitors
 Highlight the priorities for future years including their entry into broadband market.
Director’s report and closing statements
Under the director’s report of Telstra it is mentioned that that Telstra Entity falls
under the category of company as mentioned in Australian Securities and Investment
Commission Corporations (Rounding under Director’s or Financial Reports/) instrument
2016/191 that is dated on 24th March 2016 and the issued pursuant with regard to the section
341(1) of Corporation Act 2001. Owing to this, the amounts under the director’s report and
that are mentioned in the attached financial report are rounded off to nearest million dollars

11CONTEMPORARY ISSUES IN ACCOUNTING
($m), except where mentioned otherwise. Further, the report was made on 11th August 2016
as per the resolution of the directors (James & Prout, 2015).
On the other hand, under the director’s report of Amaysim it is mentioned that the
company’s board are committed for demonstrating and achieving the highest standards under
the corporate governance. They have reviewed the practices of corporate governance against
the recommendations and principles issued by ASX Corporate Governance Council (Bhimani
2015). Further, it is mentioned that the company falls under the category of company as
mentioned in Australian Securities and Investment Commission Corporations (Rounding
under Director’s or Financial Reports/) instrument 2016/191 that is dated on 24th March 2016
and the issued pursuant with regard to the section 341(1) of Corporation Act 2001. Owing to
this, the amounts under the director’s report and that are mentioned in the attached financial
report are rounded off to nearest thousand dollars ($’000), except where mentioned
otherwise.
Issues in accounting with regard to IFRS and AASB
Various issues that are associated with the IFRS and AASb for accounting are as
follows –
 IFRS interpretations are written only for for-profit companies
 IFRS do not consider the non-exchange transactions like taxes, donations and grants
and also do not deal with the non-cash generating activities like infrastructure assets
and heritage assets (Beaver, 2014)
 Consolidation of GBEs into Government’s financial statement may entail the
alignment of the accounting policies (Williams, 2014)
 It also have issue with related party disclosures, emission trading schemes,
disaggregated disclosures and reporting of service performance

12CONTEMPORARY ISSUES IN ACCOUNTING
Conclusion
From the above analysis it is concluded that AASB conceptual framework and IFRS
play important role while the companies prepare their financial statement. From the financial
statement of the companies it is identified that both the companies prepare their annual
statement as per the requirement of AASB framework, interpretation of IFRS and as per the
Corporation act 2001. Further, both the companies fall under the category of company as
mentioned in Australian Securities and Investment Commission Corporations (Rounding
under Director’s or Financial Reports/) instrument 2016/191 that is dated on 24th March 2016
and the issued pursuant with regard to the section 341(1) of Corporation Act 2001.

13CONTEMPORARY ISSUES IN ACCOUNTING
Reference
Amaysim.com.au 2017. Amaysim australia | Downloads. [online] Available at:
http://www.amaysim.com.au/investor-centre/annual-reporting-2016/downloads [Accessed 18
Aug. 2017].
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Bhimani, A., 2015. Contemporary issues in management accounting. Oxford university
press.
Bonner, S.E., 2015. Judgment and decision making in accounting. Prentice Hall.
Chester, G., 2014. Contemporary Issues in Accounting. Journal of Accountancy (pre-1986),
148(000005), p.102.
Griffiths, J.J., 2016. Recognition of Foreign Administrative Acts in Australia. In Recognition
of Foreign Administrative Acts (pp. 51-89). Springer International Publishing.
He, L., Evans, E. and He, R., 2016. The Impact of AASB 8 Operating Segments on Analysts’
Earnings Forecasts: Australian Evidence. Australian Accounting Review, 26(4), pp.330-340.
James, A. and Prout, A. eds., 2015. Constructing and reconstructing childhood:
Contemporary issues in the sociological study of childhood. Routledge.
Kent, P. and Zunker, T., 2015. A stakeholder analysis of employee disclosures in annual
reports. Accounting and Finance.
Kober, R., Lee, J. and Ng, J., 2013. GAAP, GFS and AASB 1049: perceptions of public
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Telstra.com.au (2017). Downloads. [online] Available at:
http://www.telstra.com.au/investors/downloads-16678.aspx [Accessed 18 Aug. 2017].

14CONTEMPORARY ISSUES IN ACCOUNTING
Williams, J., 2014. Financial accounting. McGraw-Hill Higher Education.