Australian Accounting Standards

Australian Accounting Standards

                 These are the standards according to which listed companies function. All have to abide by and follow the standards applicable to them. These standards vary from income taxes to business combinations, from materiality to revenue. The standard in focus below is related to employee benefits. Employees are a very important part of any business and accounting standard boards make sure that there are proper standards supporting the rights of employees.

AASB 119 Employee Benefits

                 This standard basically requires a business entity to realize that when an employee has given service for employee benefits in future, it is a liability for that entity as they are entitled to pay it in future. And also, when an economy has given service in exchange of employee benefits then it is an expense for the firm.

                 These benefits include short term benefits, long term benefits, post employment benefits and termination benefits. In all, these include wages, sick leaves, health insurance, bonuses, social security contributions, paid leaves, and etc. It is worth mentioning at this point of time that employees also include management personnel and directors.

                 This standard also explains that what kind of firms should follow this standard. This is done by every standard because, unlike this standard, some are different and not applicable to all businesses. This standard in particular is applicable to all entities and is a much known standard because everyone knows about the rights of employees and everyone is aware of employee benefits.

Raptis Group Limited

                 Raptis Group Limited is an Australian listed company that deals in residential and construction projects. It is a big company that has evolved with time. It is known for its innovation and design and has won many awards for it. Having reviewed the accounting report of Raptis Group Limited, overall it is in accordance with Australian Accounting Standards.

                 Specifically, it is in accordance with AASB 7 Financial Instruments: Disclosures. This standard requires firms to disclose all relevant information related to financial instruments. It is to ensure that everything is out in open and the public knows about the firm’s financial position and performance. This standard also requires firms to disclose any risks associated with the financial instruments and in addition to this, how the firm deals with it should also be clear. Raptis Group Limited’s financial statements disclose relevant information according to this standard.

                 Secondly, it is in accordance with AASB 101 Presentation of Financial Statements. This standard requires companies to reveal their financial statements to the general public so that they can review it and can use it to compare it with previous years’ statements and other firms’ statements. Raptis Group Limited does reveal its financial statements, as also mentioned above that it discloses information regarding its financial instruments too.

                 Thirdly, it is in accordance with AASB 107 Statement of Cash Flows. This standard requires entities to disclose their cash flow statements that highlight cash inflows and outflows. With the help of it, public can actually figure out where the cash in this firm is coming from and where it is going in the form of outflows. Raptis Group Limited does reveal its statement of cash flows.

                 Fourthly, it is in accordance with AASB 112 Income Taxes. This standard requires entities to mention information regarding taxation too in their annual books of accounts. Taxes, according to the standard, should be dealt with properly and increase and decrease in tax expense should also be mentioned. Tax due should be treated as a liability, meaning it should be dealt in the same way as other important things and that it effects should also be clear in the accounts. Raptis Group Limited very well follows this standard by mentioning the relevant details related to taxation. The increase and decrease in taxation is also shown in the notes to financial statements.

                 Over all, taking into account the annual accounts, this firm follows the Australian standards. Some of these are specified above with the standard code and details.

Conclusion

                 In the above pages, the term “Australian Accounting Standards” is explained briefly, and then a particular standard AASB 119 Employee Benefits is explained. After this, an Australian listed company named Raptis Group Limited is introduced and its compliance with Australian accounting standards is shown. Some examples of standards are given after a careful review of this company’s annual report.

                 The extent to which companies follow accounting standards depends on various factors. It is important to mention that not all firms act according to standards as there are drawbacks attached to it. Firms obviously want to hide some of the confidential information from their rivals and other stakeholders. It depends on the rigidness of laws in any particular country. Some countries are very particular about their set standards and makes sure that firms follow them. However, very few firms actually follow all the applicable standards completely.

References

Australian Accounting Standards Board, Accounting Standards, Australian Accounting Standards Board: Australian Government, Retrieved on 19th May 2010, from

http://www.aasb.gov.au/Pronouncements/Current-standards.aspx

Australian Accounting Standards Board, Employee Benefits, AASB Standard Retrieved on 19th May 2010, from

<http://www.aasb.gov.au/admin/file/content105/c9/AASB119_12-04_COMPdec09_01-11.pdf>

Raptis Group Limited, Preliminary Final Report, Raptis Group Limited Retrieved on 19th May 2010, From

<http://www.asx.com.au/asxpdf/20080829/pdf/31c19trt9gf5nz.pdf>