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Unformatted text preview: lass 1 ! Accounting identifies, measures, records and
communicates financial information
! To parties who use the information: shareholders,
creditors, regulators and other stakeholders
! Using financial statements (AASB101): ACCT1511
Rules and Principles – Balance sheet
– (Comprehensive) Income statement
– Cash flow statement
– Statement of changes in equity ! Plus Notes
1 2 Regulatory Constraints on Reporting Components of GAAP ! The Australian Securities and Investments ! Framework for the Preparation and Presentation of Commission (ASIC) administers the Act and
! Corporation Act 2001: Financial Statements (The Framework).
! Accounting standards – AASB: Australian Accounting Standards Board
– AAS: Australian Accounting Standards. ! The ﬁnancial statements and notes for a ﬁnancial year must give a true and fair view of: (a) the ﬁnancial position and performance
of the company.....s.297
– Directors’ report
– Auditor’s opinion !
! ! Accounting Standards: GAAP/ AASB/ IFRS
– The ﬁnancial report for a ﬁnancial year must comply with the
accounting standards.... s.296 AAG: Accounting Guidance Releases.
UIG: Urgent Issues Group statements.
ASX listing requirements.
Custom and tradition. ! ASX Listing Rules (for listed companies) – Continuous Disclosure Regime
3 4 Accounting Standards Principles Based Approach ! Generally Acceptable Accounting Principles (GAAP): common set of standards and procedures developed
by the accounting profession ! IASB approach to standards setting is principles based
! Provides general guidelines rather than ! The International Accounting Standards Board (IASB) specific rules for every example develops international financial reporting standards
(IFRSs) ! Relies on ethical use of professional judgement in applying standards ! The AASB develops accounting standards for Australian companies ! Principles versus Rules (i.e. Flexibility vs Consistency)
! On one hand, flexible principles may lead to more “creative ! From 2005 AASB adopted most of the content and accounting”. On the other hand, it may be easier to circumvent
specific rules than the idea behind a principle. wording of the IFRSs: Harmonisation
5 6 L1 MCQ Reporting Entity ! 34. The agency charged with the ! The reporting entity concept requires that administration and enforcement of the
Corporations Act 2001 is the: individual reporting entities be identiﬁed by
reference to the existence of users who are
dependent on general purpose ﬁnancial reports
for information for making and evaluating
resource allocation decisions (SAC 1). a. Australian Accounting Standards Board
b. Australian Securities Exchange
c. Australian Securities and Investments
d. Australian Accounting Research Foundation 7 8 Reporting Entity The Framework Sometimes a reporting entity will comprise an...
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