Critical Analysis of TPG Company's Adherence to Accounting Framework

This report provides a critical analysis of TPG Company's effectiveness in meeting the obligations of the conceptual framework of accounting. It evaluates whether TPG Company satisfies the objectives of the conceptual framework, including the recognition criteria for assets, liabilities, equity, revenue, and expenses. The report also examines the fundamental and enhancing qualitative characteristics of financial reporting, such as relevance, faithful representation, comparability, verifiability, timeliness, and understandability. Academic research and screenshots from TPG Company's annual report are used to support the analysis, providing a comprehensive assessment of the company's financial reporting practices in relation to accounting standards.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
University Name
Student Name
Authors’ Note

2CONTEMPORARY ISSUES IN ACCOUNTING
Table of Contents
Introduction................................................................................................................................2
Evaluation whether TPG Company is satisfying the objectives of the conceptual framework. 2
Evaluation whether TPG Company is satisfying the recognition criteria..................................3
Evaluation of relevance and faithful representation of the report..............................................5
Evaluation of enhancing qualitative enhancing characteristics of financial reporting..............6
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
The current study analyses the contemporary issues in accounting that refers to exploration of
the advanced notions of accounting as well as policies and understanding a range of issues
with reference to the operations of TPG Company. The current study presents an analytical
understanding of efficacy of the firm to satisfy the necessities of the conceptual framework of
particularly conceptual framework of accounting. The study therefore takes into
consideration the objectives of the conceptual framework, criteria for recognition and
presents the fundamental as well as enhancing characteristics of the guidelines. The study
intends to analytically examine satisfaction of the objectives of the conceptual framework by
the firm and analyses satisfaction of recognition criteria. In addition to this, the study also
critically analyses fundamental and enhancing characteristics of financial reporting of TPG
Company.
TPG can be considered to be a force particularly in the Australian telecommunications sector.
The telecommunications as well as IT corporation specialises particularly in consumer along
with services related to business internet and mobile telephone.
Evaluation whether TPG Company is satisfying the objectives of the conceptual
framework
Analysis of the report of TPG Company reveals that the financial assertions assist in handling
different intentions of the pecuniary declarations, different qualitative uniqueness that again
helps in establishing the effectiveness of financial statements. Rankin et al. (2012) asserts
that there are different elements that can help in shaping the entire financial assertions.
Nonetheless, the necessary components of financial declarations of the firm comprise of the
current assets and liabilities along with non-current assets and liabilities and shareholders’

4CONTEMPORARY ISSUES IN ACCOUNTING
equity. As rightly indicated by Williams (2014), diverse items of financial pronouncements
illustrate the overall financial health of the business concern. Moreover, the structure also
assists in the process if analysis of financial condition of the firm from the viewpoint of
earnings, operating expenditure along with the profit. Apart from this, the conceptual
framework also illustrates thoroughly diverse criterion and decisive facets for recognition of
different items in the financial statements of the business concern.
Evaluation whether TPG Company is satisfying the recognition criteria
Assets: As per the financial assertions recorded by the firm during the year 2016, the total
assets of the firm stand at $358.6m down up from $253.9m in 2015. In addition to this, the
assets of the firm are reflected in respect of Australian Dollars that are necessarily the
functional currency of the specific corporation (Deegan 2013). The accounting items such as
plant, property as well as equipment are mentioned at a cost after deduction of accumulated
depreciation along with accumulated losses of impairment. Essentially, the cost also
comprises of expends that is directly attributable to the acquirement of specific asset.
Liabilities: As is presented in the financial declaration of the business concern TPG
Company, the entire liabilities of the corporation TPG Company amounts to $1991.2m during
financial year 2016. In itself, the balance sheet of the firm registers current along with non-
current interest bearing liabilities that can be used for the purpose of financing diverse
functions of business operations of TPG Company. According to the annual financial
assertion of the corporation TPG Company, the liability in the balance sheet of the firm is
registered founded on the historical cost and valued at the functional currency that is
essentially in the Australian dollar (DRURY 2013). Additionally, the net defined liability of
the corporation is enumerated at the fair value of diverse plan liabilities after deduction of the
present value of the defined benefit obligations. The group necessarily derecognized a

5CONTEMPORARY ISSUES IN ACCOUNTING
financial liability at the time when the contractual obligations are mainly discharged or else
cancelled.
Financial assets along with liabilities are necessarily offset and as such the net amount that
are presented in the assertion of financial position, the group possesses has a lawful right to
offset the entire amount.
Equity: A thorough study of the balance sheet statement of the firm TPG Company reflects
the fact that shareholders’ equity of TPG Company is at $1779.2m during the financial year
2016. As declared in the annual declaration of the corporation, the derivatives mentioned in
the fair value by using the profit and loss are enumerated at the fair value (Henderson et al.
2015). Thus, the corporation utilizes diverse model specifically for accounting the derivatives
that has the need for fair value enumeration procedure. As the financial report of TPG
Company suggests the fair value of particularly equity as well as debt securities is necessarily
ascertained by orientation to quoted bid price at the closing price at the date of reporting.
However, if the same is unquoted, by utilizing valuation technique counting market multiples
as well as analysis of discounted flow of cash.
Inventory: The overall financial position of the firm TPG Company along with the degree of
efficiency of corporations can be evaluated from the analysis of the inventory level of the
corporation (Chandramohan et al. 2015). In addition to this, the inventory of the firm TPG
Company enhanced and increased to $12.0 m during the financial year 2016 from the
recorded figure of $5.8 m in the year ago period. Nonetheless, deficiency or lack of capacity
of the corporation to handle the firm’s inventory might possibly lessen the specific
competitive position of the business. Thorough analysis of the annual report of the firm TPG
Company reveals the fact that inventories are mentioned at the lower of the specific cost as

6CONTEMPORARY ISSUES IN ACCOUNTING
well as value that is net realisable. In this case, net realisable value refers to the approximated
selling price in the normal course of operations, less approximated selling expends.

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Accounts Receivables, Provision for bad as well as doubtful debt
As declared in the annual report of the business concern TPG Company, accounts receivables
of the firm stands at $358.6m in 2016 and increased from $253.9 m in 2015. Analysis of
financial statements of the corporation helps in understanding the figure for the non-current
receivables. The statement declared in the balance sheet statements of the corporation shows
an increase in receivables (both current as well as non-current). In addition to this, an
increase in the accounts receivables of the corporation can direct the way towards decline in
trade debtors along with sundry debtors (Boyle et al. 2014). Besides this, the corporation
necessarily detects trade receivables particularly at the fair value (Henderson et al. 2015).
The fair value of particularly trade as well as other receivables is approximated at the current
value of future flow of cash mainly at the interest rate (market). Again, as per the annual
report of TPG Company reflects that the equity along with debt securities approximated at
fair value is ascertained by referring to the quoted bid price at the closing period at the date of
reporting.
Evaluation of relevance and faithful representation of the report
The fundamental qualitative characteristics of effective financial information presented
financial report include relevance as well as faithful representation of financial information.
Relevance: As rightly put forward by Watts and Zuo (2016), relevance of financial
information indicates towards the fact that financial information can present a difference in
different decisions in case if it has specific predictive values. As rightly indicated by Loyeung
et al. (2016), relevant pecuniary information can help in presenting a variance in the
decisions by the users. Analysis of financial information presented in the report of the firm
TPG Company can help in making a variance in the economic decisions and the same has
predictive value along with confirmatory value.

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Materiality indicates towards an entity specific facet of relevance that is founded on the
nature together with the magnitude of accounting items. This Information can be related
mainly in the context of financial assertion of the firm TPG Company (Dagwell et al. 2015).
Faithful Representation: Faithful Representation reflects economic phenomenon both in
words as well as numbers. In order to be effective, financial information not only has to be
pertinent but also faithfully represented. Evaluation of the financial assertions of the firm
mentions clearly about consumer confidence, Australia’s economic fundamentals,
international growth factors and trading partners along with the worldwide forces (Gelmini et
al. 2015). Also, financial declarations of the firm TPG Company also succinctly presents a
financial performance both in numerals and words.
Evaluation of enhancing qualitative enhancing characteristics of financial reporting
The enhancing qualitative characteristic of financial reporting refers to comparability,
verifiability, understandability as well as timeliness. Essentially, this refers to the
characteristics that can augment the overall effectiveness of information that is both pertinent
as well as faithfully represented.
Comparability: This factor indicates towards the information regarding a reporting entity
that can essentially help different users to recognize and comprehend diverse similarities
along with variances among different accounting items. The review of functions and
operations helps in comparative financial information and assessment of the entire group and
international operating environment (Dagwell et al. 2015). The figures for different metrics
such as operating margin, seat facets, revenue growth, international capacity, ASKs and many
others for different period of time help in comparability of information.

9CONTEMPORARY ISSUES IN ACCOUNTING
Verifiability: This facet helps in assuring users that information reflects faithfully specific
economic event that it purports to reflect. The financial statements of the firm necessarily
conform to the Corporation Act of thee year 2001 together with diverse Listing Rules
mentioned under the Australian Stock Exchange (ASX). The financial report of the firm
reflects the fact that the administration of the corporation TPG Company has selected the
strategy of delivering disclosures that subsequently can aid the investors of the firm to
comprehend financial performance along with the financial position of the corporation
(Loyeung et al. 2016). The continuous disclosures presented by the corporation can hereby
help in enhancement of the financier confidence as regards transparency, integrity as well as
reliability of the form’s operations along with the financial assertions of the corporation.
Timeliness: Timeliness implies that information is available to different decision makers just
in time for influencing the decision.
Understandability: The process of categorising, characterising as well as presenting
information distinctly as well as precisely can make the information understandable. Analysis
of financial statements assists in aptly representing notes to the financial assertions,
significant accounting strategies that in turn can help in enhancing overall understandability.
The procedure of both preparations along with presentation of financial assertions of the
corporation also pursues the specific conceptual framework of particularly CF of Australian
Accounting Standards Board (AASB) (Loyeung et al. 2016). This in turn helps in gaining
clear understanding as regards both definition as well as objectives of financial assertions
together with the scope, specific criteria for the purpose of recognition of data. In particular,
the AASB framework also assists in understanding the entire procedure of measurement of
diverse accounting items in the financial assertions. In view of that, then financiers can
investigate the overall effectiveness of the operations by way of utilization of the financial
assertions of the corporation prepared using accounting standard of AASB. Maintenance of

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compliance with pertinent standards for enumeration and guiding principles can help in
averting diverse attempts of intentional misstatements and ensure steadiness of the financial
information.
Conclusion
In conclusion, it can be said that financial assertions assist in analysing diverse items of
financial assertions of the firm TPG Company and presents diverse notions of financial
dimensions. Besides this, the present study also assists in comprehending the issues
associated to measurement in the current context of the current AASB standards and structure
with special orientation to the functionalities of the corporation TPG Company. In addition to
this, the current study also aids in acquiring deep understanding as regards the issues
associated to the measurement of diverse of financial reports in the perspective of AASB.
Additionally, the above study also aids in acquiring an oversight on the association between
the measurement system implemented in the firm and the provision of specific decisions.

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References
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Causes and contemporary solutions. Accounting Horizons, 29(2), pp.245-264.
Chandramohan, A., Agrawal, A., Subramani, P. and Munipalle, P., 2015. The Impact of
Globalization ACIS 5034 Global Issues in Accounting and Information Systems Spring 2015.
Dagwell, R., Wines, G. and Lambert, C., 2015. Corporate accounting in Australia. Pearson
Higher Education AU.
Deegan, C., 2013. Financial accounting theory. McGraw-Hill Education Australia.
DRURY, C.M., 2013. Management and cost accounting. Springer.
Gelmini, L., Bavagnoli, F., Comoli, M. and Riva, P., 2015. Waiting for Materiality in the
Context of Integrated Reporting: Theoretical Challenges and Preliminary Empirical Findings.
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accounting. Pearson Higher Education AU.
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accounting. Pearson Higher Education AU.
Loyeung, A., Matolcsy, Z., Weber, J. and Wells, P., 2016. The cost of implementing new
accounting standards: The case of IFRS adoption in Australia. Australian Journal of
Management, 41(4), pp.611-632.

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Rankin, M., Stanton, P.A., McGowan, S.C., Ferlauto, K. and Tilling, M.,
2012. Contemporary issues in accounting. Milton, Australia: Wiley.
Watts, R.L. and Zuo, L., 2016. Understanding practice and institutions: A historical
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