Accounting is a process which is followed by each of the public company in order to record, identify and measure the financial performance of an organization. The accounting reports are prepared by the organizations through adopting the various accounting guidelines which makes it easier for the business as well as the stakeholders of the business to understand the business and make better decision about the performance of the company (Elad, 2016). In the report, the accounting process, guidelines of preparing the accounting reports etc have been studied of ALACER Gold corp. The report focuses that whether the proper policies have been followed by the company or how is it helping the stakeholders of the company.
Company overview:
ALACER Gold corp. is one of the leading gold mining Company. It is recognized as the low cost gold production company. 80% of the market share of the company is in Turkey market. Currently, various projects are running and operating by the business. The main focus of the corporation is to leverage the cornerstone copler mine and maximize the portfolio value of the company, minimize the project risk and improve the free cash flow so that the maximum value for the shareholders could be created (Home, 2018).
Conceptual framework compliances:
Conceptual framework could be defined as an idea or the objectives which leads to the business towards a set of standards in order to prepare the better reports. Conceptual framework offers the better guidelines to each of the organization imp order to make the consistent and similar reports so that it became easier for the stakeholders of the company to understand the annual report of the company and compare it with other competitor organization to reach over a conclusion (Garrett, Hoitash and Prawitt, 2014).
In case of ALACER Gold corp. it has been found that the company has prepared the annual reports through focusing on the conceptual framework. Proper accounting standards and guidelines have been followed by the company to collect, record, identify and measure the financial performance of the business. The company has prepared the financial statement on the basis of the IFRS rules. Below are the few examples of accounting and financial statement of the business which has been prepared on the basis of the conceptual guidelines:
(Annual report, 2018)
Along with the proper financial statement, financial notes have also been prepared to make the stakeholders understand about each of the financial aspect. It shows that the each if the transaction has been recorded and presented on the basis of the IFRS rules and conceptual framework in order to maintain the uniformity and the performance of the companies.
The statement of board of directors and the auditor’s report of the company has also been studied in order to measure the performance, opportunities, involved risk etc of the business. The main conceptual framework of the company has been measured on the basis of the relevancy and faithful representation factors of the business (Deegan, 2014).
It has been found that the overall recording and presentation factors of the company are quite satisfied and it would help the business to improve the overall performance in the market.
Compliance with fundamental qualitative characteristic:
The fundamental qualitative characteristics of the company have been evaluated through study over the fundamental qualitative characteristics of the company. On the basis of the study, it has been measured that the below are the characteristics and their compliance in the business:
Relevance:
Relevant information is quite able to influence the decisions of the stakeholders. ALACER’s annual report depicts that the recordings have been presented on better way by the company in its annual report so that the better decisions could be made by the stakeholders of the business (Loftus et al, 2015). The annual report describes that all the relevant information for the stakeholders have been described properly by the managers in their annual report.
Risk description
Faithful representation:
Faithful representation depicts that the financial and non financial performance in the annual report must be presented with evidence and facts so that stakeholders could found it faithful. All the information and activities which have taken place in the business must be evaluated and recorded in the annual report of the business. In case of ALACER, it has been found that all the new projects, new operations, changes in the organizations etc have been described in the annual report of the company briefly.
Compliance with enhancing qualitative characteristic:
Further, the enhancing characteristics of company have been studied in order to measure the conceptual framework.
Comparability:
The comparable information in the annual report makes it easier for the stakeholders of the business to understand the changes and the performance of the business. Below are the example to comparability position of the business.
Comparability
Understandability:
Further, the understandability level of the business has been discussed. On the basis of the study, it has been recognized that all the information has properly described in the annual report of the business so that the trust level of stakeholders could be improved in the reports and the organization.
DTA and DTL
Verifiability:
Verifiability ensures that all the details of the business have been faithfully presented and it has been verified by the business. In case of ALSAR Gold Corp, it has been found that all the details of the company have been verified before presenting it into the annual report of the company (Cayanan, 2016). The below details represent about the verifiability level of the business:
verifiability
Timeliness:
Lastly, the timeliness depicts to provide all the decision making information in time in order to be capable to influence their decisions. Through evaluation on the annual report of ALACER, it has been found that all the information has been timely represented in the annual report of the company in order to record all the relevant information.
Evaluation on financial statement:
Financial reports of the company has been discussed further in order to measure that whether it is easier for the shareholders, investors, financial institutions and other stakeholders of the business to recognize and measure the financial reports of the business in order to make decisions (Abeysekera, 2013). On the basis of overall study on the financial reports of the business, it has been found that the uniformity and proper guidelines have been followed by the business while preparing the report so that the comparison could be done by the stakeholders among the company and other competitors so that the better decisions could be made.
Evaluation over accounting knowledge:
Most of the people argue that a stakeholder is required to have full knowledge about the accounting concepts and guidelines. But in reality, most of the stakeholders of the business are not aware about it and make the decisions on the basis of influence of stakeholders, profitability level or the stock price of the company. Through the study and analysis, it has been recognized that the basic knowledge of accounting is sufficient for most of the stakeholders (Chand, Patel and White, 2015). It would make it easier for them to understand the financial items, compare them, recognize them and make better decisions.
Conceptual framework study also represents that if a person has little knowledge about the accounting concepts and policies than he could easily identify the actual performance of the business and it would be easier for the user to make decisions.
General purpose financial reporting requirements:
General purpose financial reporting explains that the financial reports must be prepared in such a way that all the information which has been expected from the users could be met and the reports must be easy to understand. In case of ALACER limited, it has been recognized that the overall financial and annual report of the company explains that proper GPFR rules have also been followed by the company in order to record, prepare, maintain and present the financial reports of the business.
The financial statement, financial notes and other financial information related to the business has been described properly in the annual report of the business and in an efficient way so that the overall position of the business could be improved and the stakeholders of the business could got uniformity in the financial statement of the business (Zeff, van der Wel and Camfferman, 2016).
Conclusion:
On the basis of the overall study over the conceptual framework, IFRS rules, GPFR rules etc, it has been found that the main objectives of all the accounting guidelines and policies are to provide the faithful, material and proper financial information to the stakeholders of the business so that they could make better decisions. To conclude, ALACER Gold Corp limited’s annual report has been prepared through focusing on the proper guidelines and fact to manage and improve the overall performance of the business. Conceptual framework policies should be followed by every business to improve the performance of the business.
References:
Abeysekera, I., 2013. A template for integrated reporting. Journal of Intellectual Capital, 14(2), pp.227-245.
Cayanan, A.S., 2016. An assessment of the financial reporting practices of listed Philippine banks in 2003. Philippine Management Review, 11(1).
Chand, P., Patel, A. and White, M., 2015.Adopting international financial reporting standards for small and medium?sized enterprises. Australian Accounting Review, 25(2), pp.139-154.
Deegan, C. M., 2014, Financial accounting theory, 4th ed., North Ryde, N.S.W. McGraw-Hill Education (Australia) Pty Ltd
Loftus, J, Luke, B, Leo, KJ, Boys, N, Daniliuc, S, Hong, A, & Byrnes, K 2015, Financial Reporting, 1st ed., Wiley, Melbourne. ProQuest Ebook Central.
Elad, C., 2016. International Classification of Financial Reporting, Christopher W. Nobes.Routledge, Abington, UK (2014),(160 pages,£ 95), ISBN: 0415736935.
Garrett, J., Hoitash, R. and Prawitt, D.F., 2014. Trust and financial reporting quality. Journal of Accounting Research, 52(5), pp.1087-1125.
Zeff, S.A., van der Wel, F. and Camfferman, C., 2016. Company financial reporting: A historical and comparative study of the Dutch regulatory process. Routledge.
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