BAO2202 Financial Accounting

Purpose of the assignment

The assignment provides you with the opportunity to develop an in-depth understanding of measurement and recognition issues related to financial accounting. As accountants, we are concerned about providing decision-useful information to the users of financial statements for their decision making. To provide decision-useful information to the users of financial statements, accountants often require applying guidance given in accounting standards by using their judgment.

You are required to answer the following questions:

I. Identify and discuss the main sources of regulation of financial reporting in Australia.

II. Describe the procedures for preparing accounting standards in Australia.

III. Discuss, how accounting standards are enforced in Australia?

IV. “The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity.”

Critically discuss the above statement using the research literature that users of financial information have identical information needs.

V. The AASB Framework identifies Present Value as a measurement base to measure assets and liabilities.

Critically discuss the limitations of Present Value as a measurement base in generating decision-useful information for the users of financial statements using the research literature.

VI. Review AASB 138 “Intangible Assets” and discuss the limitations of AASB 138 in providing decision-useful information to the users of financial statements with the help of research literature.