Acc303 Issues In Accounting- California Assessment Answers

Consideration of the Conceptual Framework Objective, Recognition Criteria, Fundamental and Enhancing Guidelines is essential. The relationship between accounting research and professional practice is essential. This article needs to inform your arguments. 

Answer

Introduction

Caltex is seen to begin its operation in 1936 in form of California Texas Oil Company. This company has been further seen as a joint venture between Texas Company and standard oil, thereby gaining concession in Saudi Arabia. The company has been further seen with gained concessions in Saudi Arabia. It was further seen to be renamed in 1968. The parent company has been further seen to be based on the consideration of merger in 2001 from Chevron Texaco. “Caltex Petroleum Australia Pty. Ltd.” is seen to own 50% by Chevron and the rest 50% by Australian shareholders. In March 2015, Chevron’s shares were seen to reduce by 50% of the total holding since July 2009.

The study is intended to relate the adherence of the conceptual framework of AASB of Caltex Petroleum Australia Pty. Ltd. This has been mainly seen with the reporting criteria for “Assets, Liabilities, Equity, Revenue and Expenses”. Moreover, the fundamental qualitative characteristic has been further seen to be discerned with the various types of discussions on topics such as compliance of the qualitative characteristics of the company. This has been seen with the relevant and faithful representation. Some of the other consideration of the qualitative enhancing characteristics which is seen with the representation of viable, comparable and understandable information depicted in the annual report of the company (Zalaghi and Khazaei 2016).

Adherence to the objectives of the conceptual framework with its reporting

“Australian Accounting Standards Board (AASB)” is considered as the primary government agency for the development and maintenance of the financial report. Some of the main standards applicable has been further seen to be depicted in terms contributing role for “Australian securities and investment commission at 2001”. In December 2013, AASB included in several revisions in terms of covering more aspects of conceptual framework. This has been particularly seen with better measurement of “financial performance, disclosure reporting entity, de-recognition and presentation” (Danoucaras and Woodley 2013).

The depictions made in the financial report published in 2016 has been based on the “consolidated financial statements”. The main form of the report aspect has been prepared as per the requirement of “Corporations Act and Australian Accounting Standards (AASBs)”. The consolidation of the financial statement has been seen to adhere to the relevant requirement as stated in consolidated as per “International Financial Reporting Standards (IFRSs)”. The various standards have been further seen to be adopted as per “International Accounting Standards Board (IASB)”. It has been further seen to be discerned that at present the group is yet to adopt the standards of AASB 15. The preparation of the financial reports as per the consolation of the financial report as per AASB is seen to be based on the judgement, estimated and the assumptions with the accounting policies which are seen to based to affect the policies for assets, liabilities, income and expenses (Botzem 2014).

The main form of the controlling entities of the company has been seen to be applied with the various types of the policies which are considered with AASB 10 Consolidated Financial Statements.

Adherence with the recognition criteria for reporting Assets, Liabilities, Equity, Revenue and Expenses

As per the depiction made in the annual report it has been seen that Caltex assets with the former “Australian Lubricants Manufacturing Company (ALMC)” joint venture. The net non-current liabilities have been seen to be taken into consideration with the varies types of the factors which has been seen to be based on the depiction of the decrease in the liability due to the portion of the portion of the non-current liabilities which are seen to be based on the environmental liabilities. It has been further discerned that the partial utilisation of the deferred assets has been taken into consideration with partial utilisation of the timing differences as a result of timing differences in the accounting and tax basis of “inventory, property plant and equipment and provisions”. The various types of the changes in the license conditions, fuel quality and materiality impact has been discerned with the operations of Caltex, profitability prospects and contracts. As per the evaluation of the various types of disclosures done by the company it has been seen that the company has been seen to be mainly using the strategy which has been seen to be based on potential adjustments to future period income tax expense. The different types of the judgements taken by the company is based on the assumptions and the risk factors stated in the notes C1 (receivables), C3 (intangibles) and C4 (property, plant and equipment) (Chaplin 2017).

It has been further discerned that as per the D2 notes, the different explanations of the company have been seen to be based on the consideration of the various types of the information which has been seen to related to the revenue taken from the sale of goods in ordinary course.

Adherence with the qualitative enhancing characteristics of financial reporting

The company is committed to use relevant information where it has been possible and seen to be based on the different types of the depiction of the information with relevant import parity pricing. This has been further seen to be conducive in the depiction of the arm’s length pricing among the two segments. The cost of the remediation has been considered with changes relevant to legal and environmental requirements. This has been also seen to be based on the emergence of the new techniques and experience of the sites as per the other sites and uncertainty as per the remaining assets. The different consideration of the fairness of the annual report has been seen with the company’s franchise model. The company has been able to enhance fairness with the improvement in the government system. It needs to be further considered that the various types of the other considered to be taken into consideration with the franchise model. The instruments used by the management is seen to be taken into account with fair value of the foreign exchange rate risk and credit risk of the counterparty (Hoffmann and Zülch 2014).

Adherence with enhancing characteristics of financial reporting

The depiction of the qualitative characteristics is prominent with the use of historic cost of sales operating profit, replacement cost of the sales operating profit, transport fuel sales and refinery transport fuel production. These are represented using bar graph. Similarly, the company has used the bar graph depiction for total scope of the emissions with the greenhouse emissions as per 2012-2016. Caltex has been further seen to be depicted as per recording of the after tax profit from a time period of 2012-2016 (Christensen et al. 2015). The company has been further seen to use debt maturity profile with the use of bar graph and stacked bar graph. Some of the categories of this has been considered with the use of bank loans (undrawn), hybrid, Inventory finance (undrawn) and notes of AUD. The capital expenditure of Caltex has been further seen to consider the capital expenditure which has been depicted in terms of bar graph. In addition to this, the remuneration mix used by the company is seen with horizontal stacked bar graph. The variables of this has been depicted with other senior executive, MD and CEO. In the remuneration report published by the company, it has used line graph. The line graph used by the company has been discerned with the strong alignment of the remuneration report released by the company. It has been further seen that some off the vesting outcomes of the company has been seen to be based on the consideration of S&P index (Akkeren and Tarr 2014).

Conclusion

The main consideration of Adherence to the objectives of the conceptual framework of the financial reporting has been considered with “Corporations Act and Australian Accounting Standards (AASBs)”. The consolidation of the financial statement has been seen to adhere to the relevant requirement as stated in consolidated as per “International Financial Reporting Standards (IFRSs)”. The preparation of the financial reports as per the consolation of the financial report as per AASB is seen to be based on the judgement, estimated and the assumptions with the accounting policies which are seen to be based to affect the policies for assets, liabilities, income and expenses. The recognition criteria for reporting Assets, Liabilities, Equity, Revenue and Expenses has been taken into account with Caltex assets with the former “Australian Lubricants Manufacturing Company (ALMC)” joint venture. The net non-current liabilities have been seen to be taken into consideration with the varies types of the factors which has been seen to be based on the depiction of the decrease in the liability due to the portion of the portion of the non-current liabilities which are seen to be based on the environmental liabilities.

References

Akkeren, J. Van and Tarr, J. (2014) ‘Regulation, Compliance and the Australian Forensic Accounting Profession’, of Forensic and Investigative Accounting, 6(3), pp. 1–26. Available at: https://web.nacva.com/JFIA/Issues/JFIA-2014-3_1.pdf.

Botzem, S. (2014) ‘Transnational standard setting in accounting’, Accounting, Auditing & Accountability Journal, 27(6), pp. 933–955. doi: 10.1108/AAAJ-04-2013-1301.

Chaplin, S. (2017) ‘Accounting Education and the Prerequisite Skills of Accounting Graduates: Are Accounting Firms’ Moving the Boundaries?’, Australian Accounting Review, pp. 61–70. doi: 10.1111/auar.12146.

Christensen, H. B., Lee, E., Walker, M. and Zeng, C. (2015) ‘Incentives or Standards: What Determines Accounting Quality Changes around IFRS Adoption?’, European Accounting Review, 24(1), pp. 31–61. doi: 10.1080/09638180.2015.1009144.

Danoucaras, A. N. and Woodley, A. (2013) ‘Alignment and Differences between the Australian Water Accounting Standard and the Water Accounting Framework for the Minerals Industry’, in Water in Mining Conference, Brisbane, QLD, 26-28 November 2013, pp. 26–28. Available at: https://drive.google.com/open?id=0B1R-rSdERLu7QlJoeGg0OEVkOE0.

Hoffmann, S. and Zülch, H. (2014) ‘Lobbying on accounting standard setting in the parliamentary environment of Germany’, Critical Perspectives on Accounting, 25(8), pp. 709–723. doi: 10.1016/j.cpa.2014.04.003.

Zalaghi, H. and Khazaei, M. (2016) ‘The Role of Deductive and Inductive Reasoning in Accounting Research and Standard Setting’, Asian Journal of Finance & Accounting, 8(1), p. 23. doi: 10.5296/ajfa.v8i1.8148.