The paper 'The Requirements of the Australian Accounting Standards Board' is a great example of a financial and accounting term paper. Qantas Airways Limited was founded in 1920 and it has tremendously grown to be Australia’ s largest airline. Not only has it grown domestically but also internationally. Indeed, it prides itself as the leading airline in long-distance flights and the strongest selling brand in Australia. Indeed, it has continued to excel in its safety, maintenance and engineering, customer services, and operational reliability. Its core business is the transport of customers using two airline brands, Jester and Qantas.
The company also specializes in operating subsidiary business such as operating other airlines. The company operates at regional, domestic, and international levels (Qantas 2008). This paper is based on published half-year reports of Qantas airways limited, QAL Ltd whose half-year report was published on 30 June 2012, and its ASX Code is QAL. The report will critically evaluate whether financial reporting and disclosure followed by TCL Limited are consistent with the requirements of the Australian Accounting Standards Board, AASB and the Corporation Act 2001 for the users of the annual report of the specific information provided by the company.
The views in this report are justified by reference to relevant accounting theories and ASX pronouncements. The report gives details of the accounting requirements in relation to financial reporting and disclosure. The paper will also show that an important aspect of developing any theoretical structure is the body of basic elements or definitions to be included in the structure. This will guide the way in which elements of financial statements are recognized, treated, and disclosed in the financial reports.
In addition, the paper will identify the strengths and weaknesses of financial reporting and disclosure followed by the company. This paper is concerned with the identification of the particular information provided to satisfy the various disclosure requirements contained in the Corporation Act of 2001 and the AASB accounting standards. The information is analyzed from the perspective of the users of financial accounting information. According to AASB (2004), stating the financial statement's core objectives would be simple if all users had similar needs and interests. Importantly, however, is that accounting information should be free from bias intended to achieve a predetermined result or to provoke a certain mode of behavior.
There is a need to highlight the relevance of increased intangible assets as brought about by new information technologies and stiff competition among companies. This has meant that the value of the companies has been rising correspondingly (Aboody et al 1998), but most existing accounting frameworks have not been capturing this aspect. Therefore, there is a great need to disclose such information in the notes to the financial statements. New and emerging issues should be quickly solved by reference to an existing framework of basic theory.
Over the years, several organizations, committees, and individuals have developed and published their own conceptual framework of accounting, but no single framework has been universally accepted and relied on in practice. The conceptual framework for financial reporting is based on its objectives, qualitative characteristics, and the concept of recognition and measurement. Many accounting standards and IFRS differ in the way they recognize and measure intangible assets among other things. This creates the need to disclose such information in order to improve the reliability of the reported results.
Recognition and measurement concept explains how, when, and which financial statement element including intangible asset and other transactions should be measured, recognized, and reported by the system of accounting.
AASB (Australian Accounting Standards Board), 2004. Framework for the Preparation and Presentation of Financial Statements. Melbourne: Australian Accounting Standards Board.
Aboody, D. and Lev, 1998. The value relevance of intangibles: the case of software capitalization, Journal of Accounting Research, 36 (Supplement), pp. 161–191.
Beattie, V., 2005. Moving the financial accounting research front forward: the UK contribution, British Accounting Review, 37, pp. 85–114.
Black, G., 2003. Students' Guide to Accounting and Financial Reporting Standards. London: Financial Times Prentice Hall.
CCH Editors, 2008. Australian Master Accountants Guide. Sydney: CCH Australia Limited
Dumontier, P. and Raffournier, B., 2002. Accounting and capital markets: a survey of the European evidence, European Accounting Review, 11 (1), pp. 119–151.
Fridson, M.S., and Alvarez, F., 2011. Financial Statement Analysis: A Practitioner's Guide. New York: John Wiley & Sons.
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Hirshey, M., Richardson, V. and Scholz, S., 2001. Value relevance of non-financial information: the case of patent data, Review of Quantitative Finance and Accounting, 17, pp. 223–235.
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