Financial Reporting Essay Example | Topics and Well Written Essays - 2500 words

Financial Reporting - Essay Example Table of Contents Table of Contents 3 Introduction 4 AASB 101 â€Å"Presentation of Financial Statements† 4 AASB 107 â€Å"Statement of Cash flows† 7 AASB 116 â€Å"Property Plant & Equipment† 8 AASB 138 â€Å"Intangible Assets† 9 AASB 136 â€Å"Impairment of Assets† 10 AASB 137 â€Å"Provisions, Contingent Liabilities and Contingent Assets† 10 AASB 112 â€Å"Income Taxes† 10 AASB 110 â€Å"Events after the Reporting date† 11 Overall evaluation and objectives of reporting 12 Introduction A fair and comprehensive disclosure of information requires that the entity adheres to certain accounting norms. The financial statements of a company must be prepared in conformance with the relevant accounting standards. There are accounting standards which prescribe the accounting treatment of intangible assets, contingent assets, contingent liabilities, presentation of statements etc. The adoption of these accounting standards in the case of Early Learning Services Limited has been reviewed as to whether the company has prepared its financial reports as per the accounting norms. AASB 101 â€Å"Presentation of Financial Statements† The accounting standards to be applied in Australia with effect from January 1, 2005 include International Financial Reporting Standards (IFRSs). International Accounting Standards Board (IASB) issues IFRSs. For reporting periods commencing on or after January 1, 2009 IASB made certain amendments to the IAS 1 ‘Presentation of Financial Statements’. In line with this AASB also made certain amendments to AASB 1 ‘Presentation of Financial Statements’ for enabling IFRS compliance of the reporting entities in Australia. The major changes to this standard as compared to AASB 101 issued in the year 2006 are discussed as under- Making the reporting comprehensive- The revised standard brings in a notion of ‘completeness’ in financial reporting. Previously this standard used the heads ‘balance sheet’ and ‘cash flow statement’ to refer to the two statements. On the other hand the revised standard uses ‘statement of financial position’ and ‘statement of cash flows’ to describe the above statements. As per the new rules an entity has to present comparative information with respect to the previous year. Disclosure relating to changes owners’ equity- Previously AASB 101 required items relating to expenses and income which are not shown as profit or loss to be reported in ‘statement of changes in equity’. The previous standard also required preparation of ‘statement of recognized income and expense’ comprising of profit or loss in the statement of changes in equity, any affects of accounting policy changes and any correction related error. The new amendments require â€Å"owner changes in equity† to be reported separately from â€Å"non-owner change s in equity†. The detail relating to comprehensive income is not permitted to be presented in the â€Å"statement of changes in equity†. The main aim of this is to integrate items with similar characteristics and separate items with varying characteristics to disseminate useful information. Changes relating to â€Å"Other comprehensive income†- As per the revised standard an entity has to make disclosure of income tax relating to each comprehensive income component. This was not required as per previous AASB 101 version. Dividend presentation- As per old AASB 101 the amount of ‘