Newsletter and Financial Statements for Review- myassignmenthelp

Question: Discuss about theNewsletter and Financial Statements for Accounting Review. Answer: The accounting standard of AASB 101 consists of the standards and regulation for the preparation and presentation of general purpose financial statements in order to be ensured that they are comparable with the current years and previous years financial statements of other companies. In addition, it provides the structure and rules for minimum requirement of the companies (Hodgson Russell, 2014). In case of Blake Ltd, it can be noticed that the company follows a single statement for profit and loss and comprehensive income statement. It can be noticed that the adopted statement of financial position failed in the classification of the assets as non-current and current assets. Same aspect can be seen for liability section as the accountant has not distinguished into current and non-current liabilities. Thus, it is required for Blake Ltd to present the assets and liabilities separately for greater understanding. For this reason, the company is required to comply with the standard of AASB 101, Paragraph 66 to 76 in order to present the assets and liabilities in current and non-current assets and liabilities. In addition, they need to follow the standards of AASB 110 for the accounting treatment of cash and cash equivalent (Mayorga Sidhu, 2012). The classification of raw materials, work-in-progress under inventory and others need to be done as current assets as these are used for the process of manufacturing. Same as the above, items like provision for warranty, accounts payable, allowable for doubtful debts and annual leave provision need to be classified as current liabilities as all these aspects are the liability of Blake Ltd generated at the time of sealing or replacement of goods (AASB, 2014). Moreover, there is a wrong classification of a transaction related to accumulated depreciation of property, plant and equipment under the liability side. Thus, the accountant needs to correct it by recording it in the asset side. The continuous increasing credit balance of accumulated depreciation will be refried as contra asset account. Thus, the accountant needs to credit the amount of accumulated depreciation rather than property, plant and equipment account in the balance sheet at the end of the year as will help in the easy reporting of both the cost of property, plant and equipment and the amount of accumulated depreciation worth $55,000 (Mayorga Sidhu, 2012). Apart from this, it needs to be mentioned that the payment of dividends has been wrongly recorded in the income statement of the company. It should not be done as dividend payment is not expenditure. Thus, it needs to be recorded in the statement of change in shareholders equity. Moreover, the classification of finance cost needs to be done as expenses and needs to be considered before the calculation of profit before tax. According to AASB 101, Paragraph 85, Blake Ltd is required to present the line of items in the profit and loss statement after reconcile with the subtotal. With the aspects of these amendment, the users of financial information will get greater understanding about the financial statements of Blake Ltd (AASB, 2014). References AASB, C. A. S. (2014). Financial Instruments.Project Summary. Hodgson, A., Russell, M. (2014). Comprehending comprehensive income.Australian Accounting Review,24(2), 100-110. IFRS . (2018). Ifrs.org. Retrieved 7 April 2018, fromhttps://www.ifrs.org/news-and-events/2017/10/international-accounting-standards-board-issues-narrow-scope-amendments-to-ifrs-9-and-ias-28/ Mayorga, D. M., Sidhu, B. K. (2012). Corporate disclosures of the major sources of estimation uncertainties.Australian Accounting Review,22(1), 25-39. News . (2018). Aasb.gov.au. Retrieved 7 April 2018, fromhttps://www.aasb.gov.au/News/New-Australian-Accounting-Standards?newsID=263134 News . (2018). Aasb.gov.au. Retrieved 7 April 2018, fromhttps://www.aasb.gov.au/News/Have-your-say--AASB-Draft-Guidance-on-the-Tax-Transparency-Code---comments-due-soon?newsID=263138 News . (2018). Aasb.gov.au. Retrieved 7 April 2018, fromhttps://www.aasb.gov.au/News/Webinar--The-Australian-Financial-Reporting-Framework-for-Charities?newsID=263139 News . (2018). Aasb.gov.au. Retrieved 7 April 2018, fromhttps://www.aasb.gov.au/News.aspx News . (2018). Aasb.gov.au. Retrieved 7 April 2018, fromhttps://www.aasb.gov.au/News/New-Australian-Accounting-Standard?newsID=263140