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

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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, ensuring that the financial reports convince the objective of general purpose financial reporting and qualitative characteristics of useful financial information as outlined in the IASB September 2010 ‘Conceptual Framework for Financial Reporting’ (CF) have become extremely important. Such failure of disclosures can mislead information on the company’s financial statements. 1. Introduction A dramatic increase in the demand of the financial statements by external users made the reporting entities’ annual reports to meet the objective of general purpose financial reporting and qualitative characteristics of useful financial. According to the IASB Conceptual Framework, it superseded the Framework for the Preparation and Presentation of Financial Statements. As a result, this report could discuss the conceptual framework for financial statements and compare with Bega’ current accounting practice of Property, Plant and Equipment under Accounting Standard AASB116. Then, this report will suggest some actions for Bega to improve its current accountin... ... middle of paper ... ... areas of PPE, it can be concluded that Bega has not properly met with every extent of Conceptual Framework and the accounting standard. For example, when disclosing the amount of impairment losses, Bega has not disclosed accurate amounts of reversal amounts of impairment losses and the amount of impairment losses on re-valued assets. To encounter this, Bega is strongly recommended to perfectly satisfy the requirements in accordance with AASB because it can lead to overstatement or understatement of the company’s PPE. In addition, Bega has provided clear information on PPE. Also Bega has successfully disclosed the objective of General purpose financial reporting and Qualitative characteristics of Conceptual framework. Therefore, Bega is suggested to regularly review its current PPE and accounting policies in regarding Conceptual Framework to improve the usefulness.

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