The conceptual model for the purpose of financial reporting gives out enormous assistance to the firms in the construction of the statements of finance. The companies are given the desired outline along with the principles and the standards for the construction of the financial statements. Along with the constraint of time, there have been various business problems associated with the financial recording that can be rectified if the principles and the standards of the conceptual model are incorporated (Williams 2014). Therefore, it is integral that there are number of functions of the conceptual model in the financial perspective of the firms.
In the year 1989, “International Accounting Standards Boards (IASB)” established the conceptual model that is associated with the process of financial reporting. The document tries to examine the defiance with the criteria of identification, qualitative features and objectives of the model on the organizational aspect. Therefore, in order to construct the intention of the report effective, Ansell Limited has been selected. Ansell Limited is one of the flag bearer of the healthcare business and is renowned with respect to the manufacturing of healthcare items and protective items. The company is a leader in providing protective solutions (Ansell.com. 2017). The firm develop, designs and manufactures a vast range of protective solutions that is able to meet the ever transforming requirements of the industries and the market. The company has its headquarters in Melbourne Australia and Australia has been the key business hub of the firm. In the current time period, the organization has the idea of increasing their market share in Australia and even globally with the help of increasing their competitive edge and profit in the economy. Hence, this report dichotomizes the observance of Ansell with the competent conceptual model demand for the purpose of financial documenting.
There has been an observation that the conceptual model for financial documenting is a key component for the business organizations in accordance to financial documenting. The annual report of Ansell Limited has assisted in providing key data about the conformity to the various aspects that is in relation to the conceptual model. By looking at the annual report for the company for the year 2017, it can be observed that the healthcare business has incorporated principles and the norms that are in compliance to the “Australian Accounting Standards Board (AASB)” and even the “Corporations Act of 2001” with respect to the financial documenting. Furthermore, the healthcare company has constructed their consolidated financial reports on the basis of the standards and principles of “International Accounting Standard Board (IASB)” and even with accordance to the “International Financial Reporting Standards (IFRS)”. Therefore, it can be cited that the problems that are in relation to the conceptual model in IFRS have been monitored on the aspect of Ansell Limited for their financial documenting (Russell-Smith et al. 2013). In this aspect, it can be stated that conceptual model has three key objectives, which the healthcare industries require to fulfil and they have been explained as follows:
The preliminary aim of this structure explains the obligations of the business firms in order to give out meaningful and useful financial data to their associated stakeholders so that they can undertake suitable decisions in relation to finance. With respect to Ansell Limited, it requires to be explained that the health company provides the required financial data by disclosing them in the annual report within a stipulated period of time (Beattie 2014). These information is given out mainly through the numerous financial statements like the statement of balance sheet, cash flow statement, transformations in the statement of equity and the income statement. Furthermore, the financial proceedings have been revealed in the annual report, which could be adjudicated as a primary resource of the financial data.
In accordance to the second objective of this model, the financial data has provided the requirement to be cooperative for ascertaining the indecisions, amount and timing related with the cash flows of the firm. In this aspect, it can be stated that Ansell discloses their cash flow statement in a timely manner, which would aid the user to gain essential gains that are in relation to the cash flow of the firm.
The next and the third aim and objective of this model explains that the firms are required to reveal essential data about their resources so that they can become supportive for the intention of decision-making with respect to finance (Spence and Rinaldi 2014). For Ansell Limited, it can be viewed that the health industry constructs their balance sheet with respect to the principles of AASB, which consists of the required information with respect to the economic resources.
Thus, from the assessment above, it is apparent that Ansell Limited has been able to satisfy the key aims and objectives of the conceptual model.
The conceptual model for financial documenting explains that the business organizations requires to be obligated for satisfying the identification criteria that is associated with the equity, assets, revenue, liabilities and expenditure (Malsch 2013). There are three key demands, which have been disclosed as follows;
The explanations and the conversations that have been explained below explains the process with the help of Ansell Limited satisfies the criteria of identification of the conceptual model:
Ansell Limited has numerous asset classes. The plant, equipment and property is documented by subtracting the depreciation that has been accrued and the impairment of losses from the cost of the asset (DesJardins and McCall 2014). The cost related to the associated asset has been realised, in case the suture benefits are engaged for the favour of the healthcare industry.
The assets that are intangible in nature of the healthcare companies have been questioned to impairment. The impairment losses are discovered on the contrary to the carrying amounts of those distinct assets. In Ansell. The intangible assets have specific supportive lives and have been subjective to be amortised.
The Ansell annual report comprises of numerous sorts of liabilities. With respect to the deferred tax liabilities, it has been observed that they have been realised on the basis of the temporary variations among the carrying amounts related to the liabilities for the purpose of financial documenting and the amount gathered has been used for the intention of taxation.
With respect to the contingent liabilities, the key aspects and the products have been inclusive of the loans that are repayable, Canadian dollars and proceedings. In accordance to the administration and the management of Ansell Limited, there has not been any requirement for any endowment that is in respect to the issues, as it may be possible that a future economic benefit outflow would be required or the the value is incompetent for dependable measurement (Beatty and Liao 2014).
The Ansell Limited classifies the ordinary shares in the equity aspect. The incremental costs are credited to the share issuance of healthcare companies. These expenses are deducted from the total healthcare equity.
There are numerous sources from where the revenues are realised by Ansell Limited and they inclusive of the net returns, receivable, allowances and the trade discounts. The sales that are external in nature are discovered when the key risks and rewards of ownership of services and goods and have been transmitted to the buyer and thereby can be computed in a reliable manner.
For Ansell Limited, the expenditure has been realised by relying in the distinct categories. The expenses are inclusive of the interest expense, other financing costs, research and development costs, bad debts and provision for impairment.
Therefore, it can be said that Ansell Limited has been able to satisfy the criteria of identification of the conceptual model in order to disclose the assets, equity, liabilities, expenses and revenues.
Attaining the qualitative features of the conceptual model
The explanation that has been given below explains the level of defiance with the key qualitative features of the conceptual model with respect to Ansell Limited.
Bebbington and Larrinaga (2014) have cited that with respect to the features, the given financial data requires to be appropriate for the purpose of supporting the financial decisions. The healthcare imitates the principles and the standards of Corporations Act 2001, AASB and IFRS. Furthermore, it looks at the present rates of taxes and depreciation and thereby able to reveal their relevancy.
This feature explains that the firms are needed to explain their financial data by looking at the true and the fair values (Kothari, Mizik and Roychowdhury 2015). The audit report of Ansell Limited explains that the healthcare has presented their financial reports in a precise manner by following the required accounting standards, which indicates reliable representation.
This feature of the conceptual model explains that the financial data of a firm requires to be ideal so that the stakeholders can gain knowledge the resemblances and the variations among the numerous financial reports (Beck and Mauldin 2014). By looking at the Ansell’s annual report, it can be viewed that the company has disclosed their financial reports in charts, graphs and tables. Hence, the investors and the creditors can find it cooler in assessing the financial scenario of Ansell with other companies.
In accordance to this feature, the financial statement users would be able to examine the financial data that has been given for the firm. In order to look at the features, the healthcare company has disclosed notes to all the accounting predictions shown in the annual report.
This factors explains that the firm requires to declare their financial data within the timeframe that has been scheduled (Baber et al. 2013). It has been evaluated that Ansell discloses their financial reports both annually and quarterly, which explains their conformance to punctuality.
With respect to the financial report, a firm needs to disclose their financial documents in such a way that the users can understand very easily. Ansell discloses their financial reports in an easier format for simple understanding of the users.
Conclusion
By looking at the discussions that have been made in this report, it has been viewed that Ansell Limited conforms with the AASB conceptual model in accordance to financial documenting. Along with this, the health industries has incorporated the standards and the principles of Corporations Act 2001, IASB, AASB and IFRS in order to construct their consolidated financial reports. It has been intrinsic that the company has satisfied the key aims and objectives of conceptual model and the AASB norms associated to the liabilities, equities, assets, expenses and revenue. At the end, Ansell has been able to fulfil the key qualitative features of conceptual model in order to enhance the quality related to financial documenting.
Reference List
Ansell.com. (2017). Cite a Website – Cite This For Me. [online] Available at: https://www.ansell.com/-/media/Corporate/MainWebsite/About/Investor-Center/Annual-Report-2017/Ansell-Annual-Report-2017-FINAL.ashx?la=en [Accessed 14 Dec. 2017].
Baber, W.R., Gore, A.K., Rich, K.T. and Zhang, J.X., 2013. Accounting restatements, governance and municipal debt financing. Journal of Accounting and Economics, 56(2), pp.212-227.
Beattie, V., 2014. Accounting narratives and the narrative turn in accounting research: Issues, theory, methodology, methods and a research framework. The British Accounting Review, 46(2), pp.111-134.
Beatty, A. and Liao, S., 2014. Financial accounting in the banking industry: A review of the empirical literature. Journal of Accounting and Economics, 58(2), pp.339-383.
Bebbington, J. and Larrinaga, C., 2014. Accounting and sustainable development: An exploration. Accounting, Organizations and Society, 39(6), pp.395-413.
Beck, M.J. and Mauldin, E.G., 2014. Who’s really in charge? Audit committee versus CFO power and audit fees. The Accounting Review, 89(6), pp.2057-2085.
DesJardins, J.R. and McCall, J.J., 2014. Contemporary issues in business ethics. Cengage Learning.
Kothari, S.P., Mizik, N. and Roychowdhury, S., 2015. Managing for the moment: The role of earnings management via real activities versus accruals in SEO valuation. The Accounting Review, 91(2), pp.559-586.
Malsch, B., 2013. Politicizing the expertise of the accounting industry in the realm of corporate social responsibility. Accounting, Organizations and Society, 38(2), pp.149-168.
Russell-Smith, J., Cook, G.D., Cooke, P.M., Edwards, A.C., Lendrum, M., Meyer, C.P. and Whitehead, P.J., 2013. Managing fire regimes in north Australian savannas: applying Aboriginal approaches to contemporary global problems. Frontiers in Ecology and the Environment, 11(s1).
Spence, L.J. and Rinaldi, L., 2014. Governmentality in accounting and accountability: A case study of embedding sustainability in a supply chain. Accounting, Organizations and Society, 39(6), pp.433-452.
Williams, J., 2014. Financial accounting. McGraw-Hill Higher Education.
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