This website uses cookies to ensure you have the best experience. Learn more

The Conceptual Framework For Financial Reporting: Bega´S Current Accounting Practice Of Property, Plant And Equipment

2182 words - 9 pages

Overview of the report
This report analyses the disclosures of objective of general purpose financial reporting and the qualitative characteristics of useful financial information according to The Conceptual Framework for Financial Reporting. It investigates Bega’s current accounting practice of Property, Plant and Equipment in accordance with AASB 116 Property, Plant and Equipment, and how it satisfies the objective of general purpose financial reporting and the qualitative characteristics of useful financial. This result will then recommend Bega to improve their current accounting practices.

Reasons for the report
Due to the use of the company’s annual report for users to make decisions, ...view middle of the document...

According to OB1 to OB21 of IASB Conceptual Framework, the objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to users (existing and potential investors, lenders and other creditors) for decision-making about providing resources to the entity. Those decisions involve buying, selling or holding equity and debt instruments, and providing or settling loans and other forms of credit. In addition, the users cannot require reporting entities to provide information directly to them and must rely on general purpose financial reports for the financial information they need. General purpose financial reports are not designed to show all information users need, but they provide information to help users to estimate the value of the reporting entity. Also, the Conceptual Framework establishes the concepts for financial reports that based on estimates, judgments and models rather than exact depictions or value of a reporting entity.
2.2 Disclosure of qualitative characteristics of useful financial information
According to QC1 to QC39 of IASB Conceptual Framework, the qualitative characteristics of useful financial information identify the most useful information to the users for decision-making about the reporting entity on the basis of its financial report. If financial information is useful, it must be relevant and faithfully represented. The usefulness of financial information is enhanced if it is comparable, verifiable, timely and understandable.
2.2.1 The Fundamental qualitative characteristics

2.2.1.1 Relevance
Relevant financial information helps making different decisions by users if it has predictive value, confirmatory value or both. Financial information with predictive value is engaged by users in making their own predictions. Financial information has confirmatory value if it provides feedback about (confirms or changes) previous evaluations. The predictive value and confirmatory value of financial information are interrelated, since the values can be presented at the same time. The information of the current year is used as the basis for predicting values in future years and also is compared with the predictions for the current year that was made in past years. The results of those comparisons help a user to correct and improve the processes that were used to make those previous predictions.
2.2.1.2 Faithful representation
To be useful, financial information must not only represent relevant phenomena, but it must also faithfully represent the phenomena that it purports to represent. To be a perfectly faithful representation, a depiction would be complete, neutral and free from error. When the information is completed, it has all necessary descriptions and explanations for users to understand the phenomenon. A neutral information is without bias in the selection or presentation of financial information, and should not biased, weighted, emphasised, de-emphasised or...

Find Another Essay On The Conceptual Framework for Financial Reporting: Bega´s Current Accounting Practice of Property, Plant and Equipment

Lehman Brothers´s Banking Firm and Unethical Financial Reporting

676 words - 3 pages Court stated: “GAAP recognizes that technical compliance with particular GAAP rules may lead to misleading financial statements, and imposes an overall requirement that the statements as a whole accurately reflect the financial status of the company.” (Examiner Report, 2010, Vol. 3, p. 964) The choices made in accounting masked the real issues causing bankruptcy to become the only alternative for Lehman Brothers. Reporting accurate financial

uniform accounting standard produce uniform financial reporting

741 words - 3 pages together towards convergence. (1) Why did they take this approach? Why is it important to practise the same standard across firms and countries? It is said that uniform accounting standard produces uniform financial reporting. Hence, all financial information will be treated and presented in the same manner globally. The first advantage from this would be enhancing the comparability of high quality statements. For example, company A wishes to

Financial Reporting in an Accounting Environmnent

927 words - 4 pages Introduction/Overview of the first three weeks of the Module Week 1 provide background for the financial reporting module and refreshes basic accounting concept in Finance and accounting for manager module. It provides detailed differences between cash flow and accrual accounting and a critical analysis of preferred methods as well as examines the standard setting processes and challenges. Week 2 is a follow up to week1 as it dwells extensively

TARGET MARKETING: THE TENDENCY TO INCREASE UNETHICAL BEHAVIOUR AND THE PROBABILITY OF BOYCOTTS: A CONCEPTUAL FRAMEWORK

3173 words - 13 pages behaviour can be the basis for a boycott. Overall, the way in which target marketing is put into practice demonstrates the tendency for a boycott.IMPLICATIONS AND DIRECTIONS FOR FURTHER RESEARCHThe conceptual framework presented in Figure 1 and developed in the previous section provides an insight into the process by which unethical behaviour and boycotts can be brought about as a result of target marketing. This paper has examined the conditions

Intellectual Property The state of Intellectual Property Law and the current debate in modern society

1836 words - 7 pages have been a part of human culture for thousands of years, if they are strung together to form an original thought, phrases, or verse, they may become intellectual property. The owner of a song claims control, not of the CD on which the song is recorded, but of the song itself, of where, when, and how it can be performed and recorded.The advent of the computer sparked a great rise in the claims of intellectual property infringement and the laws

The Ethical and Legal Obligations of Accounting Reporting

1089 words - 4 pages Accounting is known as the Language of Business. The American Heritage Dictionary of the American Language defines accounting as activities that provide information, usually quantitative and often express in monetary units, for decision making, planning, controlling resources and operations, evaluating performance, and financial reporting to regulatory authorities and the membership. Here in the United States we have three forms of accounting

The Need for Regulation in Financial Reporting

1389 words - 6 pages The Need for Regulation in Financial Reporting Discuss: Since 1990 the Accounting Standards Board has produced Financial Reporting Standards (FRSs) It has been performing a very important role in the economics market as the published accounts are the essential sources of information about the organizationsÂ’ performance which is available of the both internal and external user group in large organizations. l Financial Reporting

Adjustments for Financial Reporting

1329 words - 6 pages on a classified balance sheet. The major assets categories that would be included on a classified balance sheet are; • Current Assets • Long Term Investments • Property, Plant and Equipment • Intangible Assets The Liabilities categories that would be included on a classified balance sheet are; • Current Liabilities • Long Term Liabilities The Stockholders equity categories that would be included on a classified balance sheet are; • Common Stock

Financial Accounting: Tools for Business Decision Making Financial and Managerial Accounting: The Basis for Business Decisions

857 words - 3 pages , Weygandt, & Kieso, 2007, p. 396). Chapter 9 of Financial and Managerial Accounting: The Basis for Business Decisions by Williams, Haka, and Bettner (2005) is Plant and Intangible Assets. Plant assets are "long-lived assets that are acquired for use in business operations rather than for resale to customers" (Williams, Haka, & Bettner, 2005, p. 395) and intangible assets are "those assets that are used in the operation of a business but

Ethical And Legal Obligations of Financial Reporting

1214 words - 5 pages The FASB, SEC, and PCAOB Ethical financial reporting is critical to ensure consumer confidence within an economy. Accounting entries record cash transactions in the form of financial reports. Financial reporting is used to interpret and analyze business activities for the purpose of investing and efficient management. Misrepresentations, whether intentional or accidental, can send the wrong signal to interested parties resulting in wrong

Use the Effect of Goodwill Amortization on the Usefulness of EPS to Evaluate the Relationship between SFAS No. 142 and FASB Conceptual Framework

1995 words - 8 pages No. 142 in 2001.3. Is SFAS No. 142 better than the APB Opinion No. 17?According to the Statement of Financial Accounting Concepts, the objective of financial reporting is to provide financial statement readers useful financial information; furthermore the financial information should be relevant and reliable. Does SFAS No. 142 match the conceptual framework Ill? FASB says that it always works on improving the relationship between of SFAS and the

Similar Essays

Chapter 2 Conceptual Framework For Financial Reporting

9427 words - 38 pages 30-35 2-4 Copyright © 2011 John Wiley & Sons, Inc. Kieso, IFRS, 1/e, Solutions Manual (For Instructor Use Only) ANSWERS TO QUESTIONS 1. A conceptual framework is a coherent system of concepts that flow from an objective. The objective identifies the purpose of financial reporting. The other concepts provide guidance on (1) identifying the boundaries of financial reporting, (2) selecting the transactions, other events, and circumstances

The Soe Conceptual Framework: Think Critically, Transform Practice, And Promote Justice

1274 words - 5 pages The SOE Conceptual Framework: Think Critically, Transform Practice, and Promote Justice. Three rudimentary beliefs that seem as if they should be second nature to any good teacher, which must be laid out because often times the very thing that is most looked over and moved past are the things that are most necessary to functionality. Ever since the three legs of the Conceptual Framework were introduced my freshman year, I have thought that these

Chapter 1 Financial Reporting And Accounting Standards

7652 words - 31 pages studies the exposure draft in relation to the public responses, revises the draft if necessary, gives the revised draft final consideration and votes on issuance of an IFRS. The passage of a new accounting standard in the form of an IASB Standard requires the support of nine of the fourteen Board members. (b) The IASB issues three major types of pronouncements: International financial reporting standards, Framework for financial reporting, and

How International Financial Reporting Standards Affect The Quality Of Canadian Accounting Information

1846 words - 7 pages IAS 1 is “Users need to be able to identify differences between the accounting policies for like transactions and other events used by the same entity from period to period and by different entities.” In this paper, we focus on the real economic similarities and differences among companies with regard to comparability. 1.2 The implementation of fair value IAS16 requires property, plant and equipment to be reported at fair market value, and