Table of Contents
Part a: Overview of the Selected Company.
(b) Explanation of the Selected Topic ‘CF Reporting Entity’ about the Selected Company ‘CSL Ltd’
The report is undertaken to provide an insight into one of the most important topics or concept within the fundamental of accounting systems and processes. The accounting topic selected for the analysis purpose is Conceptual Framework (CF) reporting entity. The conceptual framework is developed and provided by the IASB (International Accounting Standards Board) to improve the quality of financial reporting. It has defined a reporting entity as an entity that is expected to provide the users with a general-purpose financial report (GPFR). The report explains the selected topic about the selected company of CSL Ltd, a global biotechnology company involved in researching, developing and manufacturing products for providing treatment to the human medical conditions.
CSL Limited is known to be a global biotechnology company that is involved in developing various types of medicines for treating the various type of medical disorders such as primary immune deficiencies. It is an ASX listed company that has been established in the year 1916. The company is known to be specialized in manufacturing, developing and providing pharmaceutical and diagnostic products that have been derived from human plasma. It has attained a leading position in developing and providing innovative medical solutions such as innovative biotherapies and influenza vaccines to save people from various types of life-threatening medical conditions. It is driven by the passion for protecting the lives and health of people that are suffering from a different type of serious and chronic medical conditions (CSL: Our Company, 2020). It has achieved a competitive position within the industry owing to providing protein-based biotechnology products and becoming a major provider of influenza vaccines. The company operates through its various subsidiaries such as CSL Behring, Seqirus Pty Ltd and many others (CSL Limited: Annual Report, 2019/20).
CSL Ltd is a reporting entity as per the conceptual framework of accounting as it develops and discloses the general purpose financial reports (GPFRs) for assisting the general users such as investors, creditors, suppliers and others in decision-making(AASB: Conceptual Framework, 2019). The company as adequately followed the needs and requirements of a reporting entity as provided by the CF. The CF states that the objective of the general purpose financial reporting is to provide financial information about a reporting entity that is useful for present and potential investors, lenders and creditors in decision making regarding resource allocation (Ang and Daniliuc, 2020). In this context, CSL Ltd has developed and provided a set of general-purpose financial statements such as a statement of cash flows and equity, income statement and balance sheet to provide financial information that is useful in making decisions to the end-users such as economic resources of an entity(CSL Limited: Annual Report, 2019/20).
The CF of financial reporting has stated that the qualitative characteristics of relevancy and faithful representation of information need to be present in the financial reports for enhancing the quality of the information provided to the general users. In the context of these characteristics, CSL Ltd has complied with relevancy criteria which states that the information disclosed need to make a difference in the decisions of the users. As such, it should possess both a predictive and a confirmatory value for enhancing the relevancy. The predictive value means providing an overcast of future performance whereas confirmatory value means providing feedback or confirming the past evaluations carried out (AASB: Conceptual Framework, 2019). In the context of this criterion, CSL Ltd has provided revenue information in the income statement that can be used as a basis for predicting revenue in the future years and also its comparison with the revenue position in the past years assess the present financial performance (CSL Limited: Annual Report, 2019/20). The illustration of the same is depicted as follows:
The faithful representation characteristics of the CF have stated that the information provided in the financial reports need to be complete, free form any type of business and neutral (AASB: Conceptual Framework, 2019). In the context of ensuring this characteristic, CSL LTD has included an independent auditor’s report that the financial report of the company and its subsidiaries provides a true and view of the consolidated position of the group as per the AASB standards and the Corporations Act 2001 (CSL Limited: Annual Report, 2019/20). It ensures to the general users that the information provided is materially correct and gives a fair depiction of the financial position of the company (Mills, 2017).
Thus, it can be said from the analysis held that CSL Ltd is a reporting entity and has effectively complied with the principals and rules stated by the conceptual accounting framework. It provides quality financial reports to the general users so that they can make accurate decisions by examining the real worth of the company is presented in a future context.
AASB: Conceptual Framework. 2019. [Online]. Available at: https://www.aasb.gov.au/admin/file/content105/c9/Conceptual_Framework_05-19.pdf [Accessed on: 30 October 2019].
Ang, H. N. and Daniliuc, S. 2020. Financial Reporting. United Kingdom: Wiley.
CSL Limited: Annual Report. 2019/20. [Online]. Available at: https://www.csl.com/-/media/csl/documents/annual-report-docs/csl-ltd-annual-report-2020-full.pdf [Accessed on: 30 October 2019].
CSL: Our Company. 2020. [Online]. Available at: https://www.csl.com/our-company [Accessed on: 30 October 2019].
Mills, A. D. 2017. Company Accounting - Prepare Financial Reports for Corporate Entities. Australia: Cengage Learning Australia.
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