Financial Statements Of A Reporting Entity - 1090 Words

Introduction: It has been suggested that the AASB should reclassify the meaning of a reporting entity to include all companies and businesses across Australia as well as internationally by the IASB due to the current confusion of who a reporting entity really is by some professionals. The current reporting entity concept adopted: In Australia the current reporting entity concept to abide by for reporting entities is the Corporations Act 2001. It and AASB101 determine who must compile financial reports (SAC 1), what financial statements companies must produce (AASB101.10), when (AASB101.36) details of the company s financial records (AASB101.112-124) are to be reported to its shareholders customers. There is no one way to display this information, an entity can choose from up to 3 different costing methods, and 2 different analysis methods (AASB101.102). (ICAA Financial Reporting Handbook 2014) Reporting entities must, in accordance with the Corporations Act, prepare financial statements, must comply and must apply the following particular Australian reporting standards: †¢ AASB 101 - Presentation of Financial Statements †¢ AASB 107 - Statement of Cash Flows †¢ AASB 108 - Accounting Policies †¢ AASB 1031 - Materiality †¢ AASB 1048 - Interpretation Application of Standards (Meade, 2012) Small proprietary companies are not considered to be reporting entities (Leo et al, 2012), it is assumed that most of the people who need financial information about the businessShow MoreRelatedch 03 the reporting entity and consolidated financial statements5714 Words   |  23 Pagesï » ¿Chapter 03 The Reporting Entity and Consolidated Financial Statements    Multiple Choice Questions      On January 3, 2009, Jane Company acquired 75 percent of Miller Companys outstanding common stock for cash. The fair value of the noncontrolling interest was equal to a proportionate share of the book value of Miller Companys net assets at the date of acquisition. Selected balance sheet data at December 31, 2009, are as follows:   Ã‚      1.  Based on the preceding information, what amount shouldRead MoreConceptual Framework For Financial Reporting1512 Words   |  7 PagesIFRS:Conceptual Frameworkfor Financial Reporting Role of the Conceptual Framework Conceptual Framework sets out agreed concepts that underlie financial reporting objective, qualitative characteristics, element definitions IASB uses Conceptual Framework to set standards enhances consistency across standards enhances consistency over time as Board members change provides benchmark for judgments Preparers use Conceptual Framework to develop accounting policies in the absence of specific standard orRead MoreThe Reporting Entity Concept Of The Australian Accounting Standards Board1027 Words   |  5 PagesQuestion 1A 1B The Reporting Entity Concept makes up part of the Australian Accounting Standards Board (AASB) Conceptual Framework and has been in use since its inception in Australian Accounting Standards in the early 90s (Hamidi-Ravari, 2014). 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The essay instigated with a brief history and development of conceptual framework which comprises Statement of Accounting Concepts. Apart from that, the essay also clarifies on how the financial information is essential for the users as stated in the SAC 2, for decision making purposes. Additionally, an illustration of the relationship between the SACs and how they areRead MoreThe Australia Holdings Pty Ltd Essay848 Words   |  4 Pagesto whether or not News Australia Holdings Pty Ltd, is indeed a non-reporting entity, direct attention must be drawn to SAC1, â€Å"Definition of the Reporting Entity†, as issued by the Australian Accounting Standards Board. SAC1, defines a reporting entity, as an economic entity, in which it is expected that a substantiated group of users, rely on an entity’s general purpose financial reports. 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For instance, Company A uses FIFO inventory cost method but decides to uses LIFO instead. Revision of an estimate because of new information or new experience is called change in accounting estimate. Lastly there is change in reporting entity, which happens when a company switches from one type of entity to another. Two approachesRead MoreChanges Of Fasb Accounting Standards Essay877 Words   |  4 PagesChanges in FASB Accounting Standards In 1973 the Financial Accounting Standards Board (FASB) was established to set the financial accounting standards in the United States of America for nongovernmental entities. These standards are collectively called U.S. Generally accepted Accounting Principles, or U.S. GAAP. The Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants acknowledge the authority of these standards (FASB, n.d). A â€Å"proven, independent due