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Discuss about the Animoca Brands Corporation Limited. The company has also entered the business of consumer electronic products and is also expanding to other sectors.

Requirements of the Conceptual Framework of the company

The company that has been selected for this assignment is ANIMOCA BRANDS CORPORATION LIMITED. It is a global company that helps in developing and leveraging brands for variety of games and application for smart phones. The company also deals with A.I. Technology and is listed in the Australian Stock Exchange. The company has also entered the business of consumer electronic products and is also expanding to other sectors. The overall revenue of the company goes in millions and it is in a growing stage, the company was founded in 2014 and is going strong since then. In the given case the annual report of the company has been studied to see whether they have applied the concepts of conceptual framework properly or not and what are the changes that can be done (Abdullah & Said, 2017).

Conceptual Framework includes a list of principles and guidelines that has been prepared and issued by the IASB to promote companies to enhance the quality of their financial statements and make it more user friendly. It also aims to attain uniformity in the financial statements in countries over the world so that it is easy to compare and analysis and will also be helpful for companies that goes for cross border expansion (Boghossian, 2017). There are few qualitative and quantitative characteristics that defines these frameworks and the companies are judged based on that whether they have been able to follow it and achieve it. In case of the given company also the annual report and the financial statements shall be analyzed based on these features only. A brief analysis of the same has been presented below for reference-

The financial statements of the company have been prepared as per the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The company has followed historical cash basis to prepare the same. It provides comparative statements in comparison to the prior year also along with the current year. The IASB has stated certain guidelines that companies need to follow when they are preparing these statements and in case they fail they would be held guilty (Charles H, et al., 2015). In case of the given company we see that since it is a startup and there have not been many years in business, the company has tried from its own end to follow the guidelines that were applicable to it. An extract from the annual report has been attached to highlight the same

The two fundamental qualitative characteristics includes relevance and faithful representation, this means that the data that the company is stating should be relevant to the reporting period and there should be any error or fraud in that. Same has been stated in this annual statement where we see that the company has  stated the relevant data and also the auditors have given a clear report that indicates the fact that there is no error in the same (Coate & Mitschow, 2017). It depends upon the management of the company to make sure that the financial statements are prepared on good notes and there is no error or fraud.

Enhancing Qualitative Characteristics

The IASB has stated certain features that helps in enhancement of the qualitative characteristics-

Comparability

The data should be presented in such a manner that it is easily comparable by the users, IASB aims to attain uniformity globally so that all companies can present their data in a similar manner and it can easily be compared. Animoca has many competitors that can charge its customers and thus users should have that they can compare the information accordingly (Cundill, et al., 2017).

Verifiability

The data that has been provided should be easy to verify and in case there are any assumptions made that should be stated clearly in the notes to account by the company. This same feature has been followed by the selected company, they have highlighted all their assumptions and the policies that they followed to prepare the financial statements in the notes to accounts for the company and have given relevant disclosures with respect to that (Wellmer, 2018).

Timeliness

It is important that information should be provided in such a manner that it should be relevant and should be timely reported. In case there are any changes that affect the financial statements materially, then that should be stated to the users and they should be informed about that. It is important that correct and relevant information should be provided within the time by the company (Johan, 2018).

Understandability

It is important that information should be easily understood by the users, so the terms that are used should be clear and there should not be any ambiguity in the information. In case vague words are used the users will not be able to understand. Most of the users of the financial statements do not have very advanced knowledge of accounting, they have basic knowledge of accounting and thus it is important that financial statements should be prepared in such manner that users are able to understand it clearly and give their opinion as and when required (Kaufmann, 2017).

In case of the given company it has been able to fulfil all the needs of the conceptual framework and all the features that are associated with it has been included in their annual reports. In case there are any discrepancies the management needs to take care of that and solve that issue.

The directors report is that part of the annual report where the directors give their declaration on the concepts and policies that they have applied in the preparation of the annual statements and also that it is free from all kind of errors (Kusolpalalert, 2018). In case of the given company the directors have stated that the financial statements have been prepared as per the Accounting Standards and the Corporations Regulations 2001; and complies with the IFRS. They have also given all the relevant disclosures in the notes to account for the company and all the changes have been highlighted by the company. An extract has been attached below

The auditor reviews the financial statements of a company and states whether it is free from all kind of errors and the users depends upon the audit report to take important decisions with regards to the company. In the given case we see that the auditors have given a qualified opinion stating that the books of the company are free from all kind of errors and there are no mistakes in it. The users can now take this is a basis and believe in the authenticity of the financial statements and take decisions accordingly (Ruth, 2018). The auditors need to check all the statements and the internal controls of the company and check that all the activities done by the management are correct or not (Webster, 2017).

In the given case the auditor has also stated that the company has complied with all the policies and have also commented on the going concern feature of the company. The auditor has given a clear statement and the users can depend on that going forward.

Conclusion

Based on the overall analysis it can be said that the company has been able to comply with the features of the conceptual framework and the main work of the company is to make sure that the books are prepared in such manner that the users are benefited from the same. The entire concept of conceptual framework is to prepare the statements in such a manner that the users are benefited from the same. It aims to attain uniformity in the financial statements so that going forward all the companies can be judged on the same context and the users can compare the same accordingly. In the given case the company has followed the financial framework and have complied with the policies that they have prepared. Overall the features have been incorporated and the company was successful in preparation of the financial statements as per the conceptual framework that has been discussed in the given assignment.

References

Abdullah, W. & Said, R., 2017. Religious, Educational Background and Corporate Crime Tolerance by Accounting Professionals. State-of-the-Art Theories and Empirical Evidence, pp. 129-149.

Boghossian, P., 2017. The Socratic method, defeasibility, and doxastic responsibility. Educational Philosophy and Theory, 50(3), pp. 244-253.

Charles H, C., Giovanna, M., Dennis M, P. & Robin W, R., 2015. CSR disclosure: the more things change…?. Accounting, Auditing & Accountability Journal, 28(1), pp. 14-35.

Coate, C. & Mitschow, M., 2017. Luca Pacioli and the Role of Accounting and Business: Early Lessons in Social Responsibility. s.l.:s.n.

Cundill, G., Smart, P. & Wilson, H., 2017. Non?financial Shareholder Activism: A Process Model for Influencing Corporate Environmental and Social Performance. International Journal of Management Reviews, 20(2), pp. 606-626.

Johan, S., 2018. The Relationship Between Economic Value Added, Market Value Added And Return On Cost Of Capital In Measuring Corporate Performance. Jurnal Manajemen Bisnis dan Kewirausahaan, 3(1).

Kaufmann, W., 2017. The Problem of Regulatory Unreasonableness. First ed. New York: Routledge.

Kusolpalalert, A., 2018. The relationships of financial assets in financial markets during recovery period and financial crisis. AU Journal of Management, 11(1).

Ruth, W., 2018. 'Worrying': Companies' reporting of climate risks goes 'backwards'. The Sydney Morning hearld, 20 September.

Webster, T., 2017. Successful Ethical Decision-Making Practices from the Professional Accountants' Perspective. ProQuest Dissertations Publishing.

Wellmer, A., 2018. The Persistence of Modernity: Aesthetics, Ethics and Postmodernism. fourth ed. UK: Polity Press.

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My Assignment Help (2021) ANIMOCA BRANDS CORPORATION LIMITED - Conceptual Framework And Financial Statements Analysis Essay. [Online]. Available from: https://myassignmenthelp.com/free-samples/acc303-communication-research-practices/animoca-brands.html
[Accessed 03 March 2024].

My Assignment Help. 'ANIMOCA BRANDS CORPORATION LIMITED - Conceptual Framework And Financial Statements Analysis Essay.' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/acc303-communication-research-practices/animoca-brands.html> accessed 03 March 2024.

My Assignment Help. ANIMOCA BRANDS CORPORATION LIMITED - Conceptual Framework And Financial Statements Analysis Essay. [Internet]. My Assignment Help. 2021 [cited 03 March 2024]. Available from: https://myassignmenthelp.com/free-samples/acc303-communication-research-practices/animoca-brands.html.

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