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Taking A Look At Australian Accounting Standards Boards

465 Words2 Pages

Financial statements provide the useful information about a company’s business activities and financial performance throughout the preceding financial year to support the stakeholders on relevant decisions. Therefore, financial information in Annual Reports must be adhered to the fundamental and enhancing qualitative characteristics.
a)
Australian Accounting Standards Boards (AASB) introduces the strict standards for companies to prepare their financial statements in a strict and standard format, which allows the financial information to be more reliable and useful for the users to the companies.
Most of all, financial information of companies must be faithfully represented the relevant business activities and transactions that is valid and free from bias (AASB 2013). By preparing the financial statements in a strict format, the users are able to identify the faithfully representation and relevance of the companies’ financial performance well and truly. Moreover, it is crucial for one company to compare with other companies’ financial performance in a consistent method and format with timeliness, which enhance the …show more content…

In addition, as stated by accounting standards, companies need to provide the depiction of expenditure ‘using a classification based on either the nature of the expenses or their function within the entity’ (Trotman, Gibbins and Carson 2013, p.579). By analyzing which alternative income statement results provides the most relevant and useful information for the purpose of decision-usefulness, the users are able to make decisions based on the information. The results presented by the companies is more reliable and useful when it is used to compare within the companies on the similar items in Annual Reports (AASB

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