Question:
Ensure the rational weather Newcrest is able to meet the Objectives of Conceptual framework in its Financial Reporting.
Newcrest is recognised as the leading producers of gold in Australia and one of the world’s largest company for the trade. The mission of the company is seen with finding and developing world’s largest copper and gold mines. The most imminent mines of the company have been identified in areas of “Gosowong (Halmahera Island, Indonesia), Cadia Valley Operations (New South Wales, Australia), Telfer (Western Australia), Lihir (New Ireland Province, PNG) and Bonikro (Côte d’Ivoire)”.
The important factors of the study have been able to ensure the rational weather the company is able to meet the objectives of conceptual framework in its financial reporting. The important aspects of the study also evaluate the criteria for recognition of Assets, Liabilities, Equity, Revenue and Expenses. The other areas covered in the report includes factors announcing the characteristics of financial reporting (Hoque, Islam and Azam 2013).
Newcrest Mining Limited is seen to be complying with the corporate governance framework as per “Corporate Governance Principles and Recommendations (3rd edition)” which is published “ASX Corporate Governance Council”. In addition to this the information provided as per Newcrest’s governance is seen to be lodged based on relevant practices and compliance.
The most relevant factors have been identified with limited to the changes in commodity prices. The important relevant factors are discerned in form of project development, economic conditions and the collective nature of exploration and several types of activities associated to activities such as licensing risk and permit with the regulatory framework in terms of the iteration of race, eliminating industrial relation issues and retention of personnel (Maxwell 2013).
The number of jurisdictions Newcrest is discerned with interests which are associated to increasingly complex number of subject due to the change is becoming more onerous in nature. The report has been able to link the executive generation framework of the company along with providing the appropriate performance strategy. The existing generation framework has been conducive with the changes in STI measures and various types of vesting schedules. The various concentrations of remuneration framework are further in form to the stakeholders by stating the various information on compliance practices and corporate governance. The organisational and workforce diversity has been further linked with the detailed risk management and internal control framework (Kumar et al. 2013).
The factors related to recognition of “Return on Capital Employed (ROCE)” discerned with average capital employed among the stakeholders Equity. In addition to this, and the fair value presentation has been considered with “Australian Accounting Standard AASB 2 Share Based Payments”. As per the assessment provided in the annual report it has been depicted that company is able to provide financial report as per profit of the company and it is seen to be in accordance with “Corporations Act 2001 and Australian Accounting Standards” and other “authoritative pronouncements of the Australian Accounting Standards Board (AASB)”. The main identification for Newcrest is prepared as per “Assets, Liabilities, Equity, Revenue and Expenses” along with the profit for entity has been prepared with “International Financial Reporting Standards (IFRS)”. The aforementioned standard has been interpreted with “International Accounting Standards Board (IASB)” (Lee and Park 2016).
The company’s financial reporting has been taken into consideration as per “AASB 15 Revenue from contracts with customers”, “AASB 16 Leases” and “AASB Interpretation 23 – Uncertainty over Income Tax Treatments 1 July”. On December 2015 the company has been seen to be establishing a five-step model for accounting the total number of factors which are associated to contracts of the customers. The introduction of “AASB 16 Leases” has been able to bring forward the single lessee accounting model which has been further taken into consideration for recognition of the liabilities for releases adhering to more than 12 months unless the value of the asset is significantly low (Tamene 2016). The various types of interpretations made as per AASB 23 has been further able to reveal about the consideration of income tax treatments and uncertainty which affects the overall applicability of AASB 112 Income Taxes. The different types of requirements have been further seen to be based on penalties associated with the uncertain tax treatments and interest. The initial adoption of accounting standard is discerned with “AASB 9 Financial Instruments” in the previous financial year. The main form of the representation of fair value of the “Rights, comprising Rights over unissued shares”, granted under the LTI Plan is discerned to be included in accordance with “Australian Accounting Standard AASB 2 Share Based Payments”. The different forms of the rights granted the company in 2017 is seen to be assessed as per non-IFRS financial measures throughout the annual report. The different types of information on operating and financial review has been also taken into consideration with operating and financial review of Directors’ Report regarding non-IFRS financial measures. The several types of other non-IFRS financial measures information is considered with the information given by financial review. The several types of other information as per non-IFRS financial measures is seen to include reporting is based on “Assets, Liabilities, Equity, Revenue and Expenses” which are taken into consideration as per Section 6 of the financial and operating review (Zhang and Andrew 2014).
the important consideration of Newcrest’s financial metrics has shown significant improvement in the past three years which has led to company’s strong profitable position and funding requirements for future growth. The dividend policy of the company is related to the ability for funding various types of near term growth opportunities. The board has been able to announce the total dividend for 12 months amounting to US 15 cents per share. In addition to this, the dividend policy for the company has been seen with exercising different types of options which are associated to maintaining continued balance with the financial performance and capital commitment along with adequate gearing level. The payment for the ordinary level of the dividend has been discerned in containing the balance of capital commitment and financial performance along with prudent leverage (Bird et al. 2014).
The different types of enhancement in the ordinary dividend has been taken into consideration with the new guidelines given by AASB. Newcrest has been targeting an annual dividend amount of at least 10-30% as per free cash which has been generated in a particular financial year and less than US 15 cents. As per the depictions made an annual report of the company published in 2017, the improved characteristics of the company has been discerned with the factors such as increasing the leverage ratio to 1.1x and gearing ratio of 16.6% (Andrew and Cortese 2013).
Conclusions
The main depictions made in the study has stated that Newcrest Mining Limited is seen to be complying with the corporate governance framework as per “Corporate Governance Principles and Recommendations (3rd edition)” which is published “ASX Corporate Governance Council”. In addition to this the information provided as per Newcrest’s governance is seen to be lodged based on relevant practices and compliance as per AASB guidelines. The existing generation framework has been conducive with the changes in STI measures and various types of vesting schedules. The various concentrations of remuneration framework are further in form to the stakeholders by stating the various information on compliance practices and corporate governance. As per the assessment of the annual report it has been depicted that companies able to provide financial report as per profit of the company and it is seen to be in accordance with “Corporations Act 2001 and Australian Accounting Standards” and other “authoritative pronouncements of the Australian Accounting Standards Board (AASB)”. The main identification for Newcrest is prepared as per “Assets, Liabilities, Equity, Revenue and Expenses” along with the profit for entity has been prepared with “International Financial Reporting Standards (IFRS)”. The aforementioned standard has been interpreted with “International Accounting Standards Board (IASB)”.
The main recommendation of the company is built on the initiatives which can take towards corporate social responsibility is and expand its business across other parts of the world. The company will also look forward to disclose adequate information about its liquidity performance and capital gearing ratios in the annual report.
References
Andrew, J. and Cortese, C. (2013) ‘Free market environmentalism and the neoliberal project: The case of the Climate Disclosure Standards Board’, Critical Perspectives on Accounting, 24(6), pp. 397–409. doi: 10.1016/j.cpa.2013.05.010.
Bird, V., Leamy, M., Tew, J., Le Boutillier, C., Williams, J. and Slade, M. (2014) ‘Fit for purpose? Validation of a conceptual framework for personal recovery with current mental health consumers’, Australian & New Zealand Journal of Psychiatry, 48(7), pp. 644–653. doi: 10.1177/0004867413520046.
Hoque, M. Z., Islam, M. R. and Azam, M. N. (2013) ‘Board Committee Meetings and Firm Financial Performance: An Investigation of Australian Companies’, International Review of Finance, 13(4), pp. 503–528. doi: 10.1111/irfi.12009.
Kumar, V., Sharma, A., Shah, R. and Rajan, B. (2013) ‘Establishing Profitable Customer Loyalty for Multinational Companies in the Emerging Economies: A Conceptual Framework’, Journal of International Marketing, 21(1), pp. 57–80. doi: 10.1509/jim.12.0107.
Lee, C. and Park, H. (2016) ‘Financial constraints, board governance standards, and corporate cash holdings’, Review of Financial Economics, 28, pp. 21–34. doi: 10.1016/j.rfe.2015.10.001.
Maxwell, J. A. (2013) ‘Conceptual Framework: What do you think is going on?’, in Qualitative Research Design: An Interactive Approach, pp. 39–72. doi: 10.1007/978-3-8349-6169-3_3.
Tamene, E. H. (2016) ‘Theorizing Conceptual Framework’, Asian Journal of Educational Research, 4(2), pp. 50–55.
Zhang, Y. and Andrew, J. (2014) ‘Financialisation and the Conceptual Framework’, Critical Perspectives on Accounting, 25(1), pp. 17–26. doi: 10.1016/j.cpa.2012.11.012
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