Accounting Policy Choice
Table of Contents
Introduction 3
Effects of accounting policy choices in financial results of organisation 3
Purpose to focus on material disclosure by ASIC 5
Explaining CPA Australia’s suitable revenue recognition policy with reference to ASIC 6
Describing revenue recognition criteria in AASB 15/IFRS 15 Revenue and AASB 118/IAS 18 Revenue 8
Reviewing annual financial reports of for 2014, 2015 and 2016 and demonstrating variations 9
Demonstrating choices of policies related to accounting in context of AASB 118 and AASB 115 10
Conclusion 10
Reference List 12
Appendices 14
Introduction
The following assignment is based on accounting policies choices as per company’s size and accordance with Australian Securities and Investment Commission (ASIC). ASIC is corporate regulator of Australia and it is an independent body which regulate financial services of companies to protect investors, consumers and creditors of Australia. On 31st December 2014 ASIC announced to focus on accounting policy choices to auditors while preparing financial reports of listed and unlisted entities for sake of stakeholders and general public. Accounting policy deployed for preparing financial reports should focus on material disclosure, which will work as useful information for investors of company and other users of financial reports. Accounting policy refers to rules, procedures and principle implemented by auditor or management team of organisation to prepare financial statements. This policy includes measurement system, techniques and methodology used for disclosing company’s transparency in financial field. The company, which are listed under stock exchange, needs to adhere to specific accounting policy as prepared by International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principle (GAAP) while preparing financial reports.
(I.C. RS 3595)