...role is to approve the interpretations by the IFRIC. Australia has joined the revolution of accounting integration by the intention to adopt IFRS in 2003, with implementation required for reporting periods on or after 1 January 2005 (Nobes & Zeff, 2008). Intention of adopting IFRS is to embrace international harmonisation by having a single universal set of accounting rules and to optimize accounting quality reducing diversity in accounting practices and information asymmetries. Concurrently, many scholars has raised doubts and speculation of this ideology of accounting standardisation stirred up by the adoption of the controversial International Accounting Standards (IAS) 39 or in Australia, the Australian Accounting Standards Board (AASB) 139: Financial Instruments: Recognition and Measurement which has been subject to much criticism (Armstrong, Barth, Jagalinzer, & Riedl, 2008; Barth, Landsman, & Lang, 2006). Due to this uproar, the IASB has decided to review the standards for financial instruments formulating a new financial instrument standard, IFRS 9: Financial Instruments which would be implemented in January 2013, however, an option is given to companies if they wish to adopt the new standard earlier. Hence, this essay would discuss in depth the issues arising from the current financial instrument standard and discuss the effects of the implementation of the new standard with reference to two listed...
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...activity based costing Activity based costing system is the costing system that it will based on the occurred of events to assign to the products and services that involved in the process of providing the product or service. So firstly, it will identify various activities performed in a firm and then, allocated the overhead costs to activities using multiple cost drives and allocate the overhead costs to products and services based on the amount of it consumed of these activities and resources. For ABC system used of multiple drive however, traditional costing system only based on one cost driver. ABC system able to take account of all the overhead costs such as selling and administrative, marketing and general expenses .The traditional costing systems focus on internal organisation management and are financially-oriented So the firms that operate under contemporary settings may not favourable to use of traditional costing systems due to increasing global competition, advance technological and development of new management system such as total quality management, just in time and flexible manufacturing system. However, ABC could work with other system such as economic value added, total quality management or theory of constraints. In addition, ABC system may able to monitoring the hidden losses and profits compare with the traditional costing system. But for identical output it may not reasonable to implement in ABC system but logical to traditional costing system. Advantage...
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...For a recorded asset, AASB 16 leases and AASB 117 finance leases have distinctive natures. The main distinction is identified as treating residual value guaranteed (IFRS 16, EA). AASB 16 states that a right-of-use asset should be recognized at the commencement date and measured at cost, comprising of initial payment of lease liability, previous lease payments less incentives received, any initial direct costs and estimated costs in preparing underlying asset (AASB 16, 23-24). Under AASB 117, an asset will be recorded at the fair value of the leased property or if lower, the present value of the minimum lease payments using the implicit interest rate (AASB 117,20). AASB 16 measures merely the expected payable amounts under guaranteed residual...
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...EXECUTIVE SUMMARY This report is prepared in response to the exposure draft ED164 titled ‘An improved Conceptual Framework Financial Reporting: The objective of Financial Reporting and Qualitative Characteristics and Constraints of Decision-useful Financial Reporting Information.’ released by Australian Accounting Standard Board (AASB). Four major differences have been identified between the AASB’s current Australian Framework for the Preparation and Presentation of Financial Statements and ED 164 are identified. In Current Australian Framework financial report are prepared from a proprietary perspective whereas in ED 164 they are prepared from an entity perspective. The boards decided to identify present and potential capital providers as primary users for General Purpose Financial Report (GPFR) whereas the Australian Framework lists the users of GPFR as investors, lenders, suppliers and other trade creditors, employees, customers, governments and their agencies and the public. Besides, The boards have also decided on a broad enough objective that encompass all the decisions that equity investors, lenders and other creditors make in their capacity as capital providers, including resource allocation decisions as well as protection and enhancement of their investments whereas the other one focus on provide information to wide range of users in making economic decisions. In addition, the ED 164 has categorised the qualitative characteristics – fundamental, enhancing and pervasive...
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...countries (KPMG, 2010). The purpose of this paper is to study whether the given option of using the indirect method in reporting cash flow statement is beneficial to the users of general purpose financial reports. The paper is divided into five parts where it started off with a brief introduction of AASB 107, following by the reasons for harmonization, the arguments for and against the (in)direct method as well as some criticisms before moving into conclusion. Cash flow is vital to determine the potential of profitable firms as most firms under the basis of accrual accounting may still present favorable profits, despite having poor cash management. The objective of AASB 107 is to require the provision of information about the historical changes in cash and cash equivalents of an entity by means of cash flow statement (Australian Accounting Standards Board [AASB], 2013). In this paper, focus is concentrated in reporting cash flow from operating activities using either the direct method, whereby major classes of gross cash receipts and gross cash payments are disclosed or indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature (AASB, 2013). As mentioned above, one of the major reasons that such harmonization occurred is because standardization of accounting standards is not necessarily the standardization of accounting...
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...of the financial statements. 2. For Segment reporting 2.1. Significant Elements of Changes in the Field of Segment Reporting From the old to the new consolidation suite, for segment reporting, significant changes of accounting standard were mainly from AASB 114 segment reporting to AASB 8 operating segment. The latest version AASB 114 was applied to reporting periods beginning on or after 1st July 2008 but before 1st January 2009 (AASB 2008, p.1). Its replacement AASB 8 started from 1st Jan 2009, and early adoption was acceptable (AASB 2010, p.1). Firstly, the most significant change is the identification method of operating segments. AASB 8 (AASB 2010, p.10) requires reporting entity to identify reporting segments whose performance is regularly examined by CODM for decision making purpose of allocating resources. In contrast, AASB 114 required that segments should be defined by reporting entity’s business and geographical characteristics (AASB 2008, p.11). Secondly, the disclosure of segment performance measurement was shifted to focus on management accounting (AASB 2010, p.16), and the results need to be reconciled (AASB 2010, p.16). Thirdly, internal cross segments sales revenue can be counted for segment reporting purpose (AASB 2010, p.17). Lastly, goodwill...
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...1. Introduction Accounting treatment for income taxes for for-profit entities is subject to Australian Accounting Standard Board (AASB) 112 Income Taxes. In accounting for income tax, complying with tax-effect method involves the occurrence of tax consequences due to different treatments are applied for transactions and other events happened inside an entity for accounting and taxation purposes, namely current tax consequences and future tax consequences. The purpose of this report was to identify and analyze the reasoning behind the responsibility of exploration and development costs (E&D) for the creation of a deferred tax liability (DTL) and its treatments for both accounting and taxation purposes. Moreover, the analysis was performed with reference to case study of Gravatt Ltd., a company operating in the mining industry where its directors arguing on the disadvantages of applying tax-effect accounting standards of AASB 112 and rather not to comply with one. This report was not discussing only on the rationale behind deferred tax liabilities according to AASB Framework for the Preparation and Presentation of Financial Statements and AASB 112 Income Taxes, but also the comparison of the impact on information utility captured by the users of financial statements of Gravatt in case of recognizing and unrecognizing deferred tax liabilities to be reported on its annual reports. 2. Discussion 2.1 Deferred Tax Liabilities Deferred tax liabilities (DTL) can be defined...
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...role of the ASIC is to enforce and regulate company and financial services laws to protect consumers, investors and creditors. (ii) Australian Accounting Standards Board (AASB) The role of the AASB is to develop a conceptual framework. It is also responsible for ‘making’ accounting standards that have the force of law under the corporations legislation, as well as formulating accounting standards that are to be used by reporting entities that are not governed by corporations legislation, inclusive of entities operating in the not-for-profit sector and public sector entities. The AASB is also responsible for Interpretations Advisory Panels, user focus groups and project advisory panels. As was indicated in this chapter, however, a great deal of the responsibility for developing accounting standards to be released by the AASB is in the hands of the IASB, as is the development of the conceptual framework. It is to be anticipated that only minor changes would be made to standards being released by the IASB before they are subsequently released within Australia as AASB standards (for example, the changes might involve adding more explanatory material to the Australian standard, or to add additional requirements in relation to not-for-profit or public sector entities). The AASB reports to the Financial Reporting Council (FRC). Once an...
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...Abstract Intangible assets have been given a lot of attention by accounting professionals and other parties involved with their financial reporting lately, due to the difficulty they present in being precisely valued, classified and accounted for. For some companies, intangible assets make up the majority of their total company’s assets; for other companies, intangible assets are very small part of their total assets. In either case, accounting treatment of intangible assets has seen some interesting twists occur in the accounting world, especially after the introduction of AASB 138 ‘Intangible Assets’ in 2005. This paper aims to expose some of the new ways intangible assets are being accounted for in financial reporting regarding intangible assets since the inception of the new standard. Introduction Intangible Assets: An Overview Intangible assets are those assets that are identifiable, have no physical substance, and are non-monetary. Companies frequently use their resources, or incur liabilities, upon acquiring development, maintenance or enhancement of intangible assets (CPA Australia, 2009a). Some common examples of intangible assets include software, patents, copyrights, motion picture films, customer lists, mortgage servicing rights, fishing licenses, import quotas, franchises, customer or supplier relationships, customer loyalty, market share and marketing rights (CPA Australia, 2009a). Common headings that intangible assets fall under include...
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...estimation and uncertainty 5 AASB 101 5 AASB 108 5 The current accounting practice of Discovery Metals 7 Property, Plant and Equipment 7 Impairment of assets 8 Provision 9 The potential gap 10 Recommendation 10 Conclusion 11 Reference 12 Appendix A 13 Executive Summary The purpose of this research report is to analyse whether disclosures in Discovery Metals’ annual report comply with the requirements in Australian Accounting Standards (accounting estimate and accounting policy judgement). The main part of the report is divided into three main parts which are relative accounting standards and policies, company’s current accounting practice and the potential differences between company’s current practice and the accounting standard requirements. The scope of the research report is limited by the Australian Accounting Standard Board (AASB) that it mainly focuses on AASB 101 and AASB 108. Introduction On 26 June 2012, Australian Securities and Investments Commission (ASIC) released the results of its analysis of financial reports for years and half-years ended 31 December 2011. Although the regulation of financial reporting in Australia is in a high standard, the ASIC still found some flaws, at a result the ASCI published its areas of new focus for 30 June 2012 financial reports (ASIC 2012). Since the Board was care about whether the annual report of the company has complied with the Australian Accounting Standards Board (AASB) or/and ASIC requirements...
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...Lantto, Petri Sahlstrom, 2009). Consequently, the AASB first issued AASB 9 Financial Instruments in December 2009. After that, the IASB re-issued IFRS 9 in October 2010, setting out requirements for the classification, and aspects of measurement, recognition and derecognition of both financial assets and financial liabilities. Most of the requirements for financial liabilities were carried forward unchanged from IAS 39. However, some changes were made to the fair value option for financial liabilities to address the issue of own credit risk. The AASB re-issued AASB 9 Financial Instruments, which incorporates IFRS 9 Financial Instruments, in December 2010.本文由优质文化有限责任公司整理提供。阅读更多原创的文章，请点击www.youzhiwenhua.com专业的毕业论文代写论文代写代写论文留学生论文代写代写留学生论文代写法语论文代写日语论文代写韩语论文文化网站QQ527510459 TEL15982106398 The requirements in AASB 9 (as issued in December 2010) arise from the completion of the first phase of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement, which is incorporated in AASB 139 Financial Instruments: Recognition and Measurement (Houston, R.W. Peters, M.F. and Pratt, J.H., 1999).The objective of this whole project is to improve the usefulness for users of financial statements by simplifying the classification and measurement requirements for financial instruments. So, we will be wondering what is wrong with the IAS\AASB 139 which has given rise to IFRS\AASB 9. And, how the future application of IFRS\AASB 9 will impact on the accounting for financial...
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...EXECUTIVE SUMMARY This research report provides an analysis and evaluation of the current state of Milley Ltd which is a book publisher located in Brisbane. The company's office and warehouse suffered damage during the recent floods and storms. The circumstance resulted accounting issues about the presentation of financial reports for the year ending 31 March 2011. Methods of analysis include background reflection of floods in Queensland to some board members and discussion about six aspects items: damaged inventory, collectability of accounts receivable, unfulfilled contract to supply books, replacement cost of damaged PP&E, cleaning up costs in May 2011 and receiving Government Assistance. By analysing above six items which supported by AASB standards and Framework, the Board of directors will...
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...Compiled AASB Standard AASB 137 Provisions, Contingent Liabilities and Contingent Assets This compiled Standard applies to annual reporting periods beginning on or after 1 January 2011 but before 1 July 2013. Early application is permitted. It incorporates relevant amendments made up to and including 27 October 2010. Prepared on 26 November 2010 by the staff of the Australian Accounting Standards Board. Obtaining Copies of Accounting Standards Compiled versions of Standards, original Standards and amending Standards (see Compilation Details) are available on the AASB website: www.aasb.gov.au. Printed copies of original Standards and amending Standards are available for purchase by contacting: The Customer Service Officer Australian Accounting Standards Board Level 7 600 Bourke Street Melbourne Victoria AUSTRALIA Phone: Fax: E-mail: Website: Postal address: PO Box 204 Collins Street West Victoria 8007 AUSTRALIA (03) 9617 7637 (03) 9617 7608 publications@aasb.gov.au www.aasb.gov.au Other Enquiries Phone: Fax: E-mail: (03) 9617 7600 (03) 9617 7608 standard@aasb.gov.au COPYRIGHT © 2010 Commonwealth of Australia This compiled AASB Standard contains IFRS Foundation copyright material. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and enquiries concerning reproduction and rights...
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...(2009). Annual report. Retrieved from http://www.aui.com.au/resources/30%20June%202009%20- %20Final%20Docs%20-%20AUI/AUI%20- %20Annual%20Report%202009%20-%20Final.pdf Australian Accounting Standards Board. (2004). AASB 139 „Financial Instruments: Recognition and measurement‟. Vic., Australia: AASB Australian Accounting Standards Board. (2009). AASB 9 „Financial Instruments. Vic., Australia: AASB Bentley, P. A., Franklin, M. A. (2013). Which international cultures favor disclosure of risk. International Journal of Business, Accounting, & Finance. 7(2), 62-76. Institute of Chartered Accountants Australia. (2012). AASB 9 Financial instruments. Retrieved from http://www.charteredaccountants.com.au/Industry- Topics/Reporting/Australian-accounting-standards/Analysis-of-AASB- standards/AASB-9--Financial-instruments Institute of Chartered Accountants Australia. (2012). AASB 139 Financial 7 instruments: recognition and measurement. Retrieved from http://www.charteredaccountants.com.au/Industry- Topics/Reporting/Australian-accounting-standards/Analysis-of-AASB- standards/AASB-139--Financial-instruments AASB 139 (IAS 39) in Australia – The main challenges for everyone else. (2006). Retrieved from http://ozrisk.net/2006/09/28/aasb-139-ias-39-in-australia- the-main-challenges-for-everyone-else/ Loftus, J. (2006). What do you get when you mix measurement methods and priciples? Accounting for financial instruments. Retrieved from http://business.curtin...
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...to be recorded directly in equity, the expense or income amount is to be included in profit or loss. Specifically, paragraph 88 of AASB 101 states: An entity shall recognise all items of income and expense in a period in profit or loss unless an Australian Accounting Standard requires or permits otherwise. As an example of one class of items that does not go to profit or loss we can consider the situation where an error from a prior period is discovered (perhaps the assets recorded last year were valued in excess of their recoverable value). In such a case the error is to be corrected retrospectively, as required by AASB 108 Accounting Policies, Changes in Accounting Estimates, and Errors. This would require a reduction in assets and a reduction in retained earnings to recognise the asset write-down expense. Although this is an expense that is recognised, it is a case of an expense being recognised directly in equity (retained earnings is an equity account). A number of other accounting standards also require certain income and expense items to be recorded directly in particular equity accounts rather than including them in a period’s profit or loss. These items form part of what is now referred to as ‘other comprehensive income for the year’—which when added to ‘profit or loss’ gives ‘total comprehensive income’ for the period. Paragraph 7 of AASB 101 defines ‘other comprehensive income’ as follows: Other comprehensive income comprises items of income and expense (including...
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