Part A: Qualitative Characteristics of Financial Reporting and Perspectives on IFRS

In order to raise the profitableness of the financial data, the operating statements of the business organizations are needed to acquire the subjective features. There are two kinds of subjective features of financial reporting. They are Fundamental subjective features and Enhancing subjective features. The main components under fundamental subjective features are Applicability and Trustworthy Presentation; and the main components under improving subjective features are Comparability, Verifiability, Timeliness and Understandability (Antonova et al. 2015). In the given article, it could be noticed that various individuals have given their opinion about the incorporation of International Financial Reporting Standard (IFRS). In every statement, their opinions have directed towards the absenteeism of particular subjective features of financial reporting, they are as follows:

In the given statement, former AXA head of finance Geoff Roberts stated that the shareholders of the organizations greatly depend on the depositors report and the declaration of the management on the organizations for obtaining appropriate knowledge regarding the financial situation and main financial sum of the business organizations. This specific feature directs towards a particular subjective feature of financial reporting that is well explained (Larson, Lewis and Spilker 2017). Comprehensibility is stated as a major improving subjective feature, which allows in raising the class of financial reporting. In the existence of this particular subjective feature, the users of the financial data are able to clearly categorize, signalize and represent the operating statements in order to give a higher explanation about the financial position of the business organizations. It is required to be state that the incorporation of the standards of IFRS is making some of the main financial features complicated and it is not able to give knowledge of the operating statements. The opinion of Mr. Roberts directs towards the reason that the incorporation of IFRS structure is not impactful in giving the depositors with better knowledge about the financial reporting of the business organizations via depositors report and management statements (Bukit et al. 2017).

From the opinion of Wesfarmers finance director Terry Bowen, it could be noticed that the financial accountant would misunderstand the financial data of the business organizations in case they attempt to analyze the financial notes of the organizations formed by following the standards of IFRS. This specific statement directs towards the absenteeism of two subjective features of financial reporting; they are understandably and comparability (Mullinova 2016). It requires to be stated that these are two improving subjective features of financial reporting. The existence of contrast in subjective features allows the users in the recognition of likenesses and contrasts of the financial elements.  It applies that the users of the financial data would not be able to comprehend and compare the financial data of the business organizations from the financial notes in the absenteeism of appropriate technical knowhow (Robson, Young and Power 2017). It signifies that the users require to gather impactful technical knowhow regarding various financial features in order to obtain knowledge about the IFRS incorporated in operating statements.

Part B: Perspectives on the Corporations Act

According to the opinion of Commonwealth Bank chief financial officer David Craig, the depositors do not focus on the financial data of IFRS incorporated in operating statements as it declines to convey the actual financial situation of the organizations (Swain et al. 2015). This specific feature directs towards the absenteeism of a major subjective feature that is trustworthy presentation. It is the basic subjective feature of financial reporting. The absenteeism of this specific subjective feature applies that the IFRS standards decline in giving full explanation of all the important financial elements for giving the users with the accurate financial data (Suryanto and Ridwansyah 2016). On the other hand, the IFRS incorporated operating statements, which declines in giving the numerical decoding of the economic phenomena of the business organizations. However, it also directs towards the factor that there is a huge opportunity of doing cheating with the financial data of the business organizations in the existence of IFRS structure. Due to all these facts, David Craig made this statement.

In this regard, it requires to be cited that the main goal of financial reporting is to give the users with the accurate financial data so that they can judge the actual financial situation of the organizations. Furthermore, in the absenteeism of so many basic as well as improving subjective features in IFRS reporting, it is not feasible to fulfill the central targets of financial reporting (Trotman and Carson 2018). 

The following examination points out the resolution of the government not adding any particular principle regarding the three main theories. They are Public Interest Theory, Capture Theory and Economic Interest Group Theory of Regulation.

Public interest theory:

As stated by the theory of public interest, the market directors always attempt to discover the market clarifications for any issues that are economically well organized. According to this theory, principles are given major significance for the clarification of any issues (Oulasvirta 2014). All these reasons apply that the main target of this theory is the well-being of the public with application of various types of principles. With regards to this theory, it could be stated that there was a requirement for the government to announce principles in the Corporation Act for the involvement of social and environmental liabilities. It cites that the market forces may not always function for the application of social and environmental liabilities. The existence of particular principles would put the commitment on both the organizations and the customers to accomplish their social and environmental liabilities in the most appropriate way (Dutta and Patatoukas 2016). Hence, for the accomplishment of this feature, it is needed to have particular principles in the Corporations Act.     

Part C: Implications of Impairment Cost Rules in Corporate Financial Statements

Capture theory:

The application of various types of principles is executed for the well-being of the common people. Thus, as cited in the theory of capture, the directors do act upon with the principles in order to persuade their personal gains. It applies that the applied principles act as the tool for satisfying the interests of the directors after a specific time (Elliott 2017). The main purpose of the formation of the principles is feasible to know with the help of this theory. Essentially, the inclusion of the people who would get impacted by the application of the principles could be recognized with the help of capture theory. By applying the theory in the given condition, it could be cited that the government took the right resolution not to apply any type of principle for highlighting social and environmental liabilities (Henderson et al. 2015). According to the theory, in the existence of any principle in the Corporation Act, the directors would start to look after their own interests with the principles after a specific period. Owing to this fact, it is better to have the market force as it would remove the chance to capture the principles under the act.    

Economic Interest Group Theory of Regulation: 

This specific theory creates a contrast with respect to the above two theories. As stated in this theory, the principles involve various group of policies and the forces of demand and supply have significant impact on them. In this specific theory, the government is positioned in the side of supply and interest group is positioned in the demand side. It also cites that the major goal behind the formation of principles is to make the industries beneficial (Hoskin, Fizzell and Cherry 2014). Thus, it could be stated that industries form the principles and make the market to incorporate them. From the perspective of this specific theory, it was required for the government to announce particular principles for the well-being of the industry as the well-being of the industry could lead to the well-being of the customers. Customers are the main stakeholders of the business organizations (Khan 2015). According to this theory, it is needed for the government to involve the customers in the growth system of the principles as this method would lead to the formation of such constitution that would be advantageous for both the industry and the customers. Owing to this fact, it would be feasible for the government to form a balance between the industry and customers. 

Part D: Property Plant and Equipment Valuation

From the given condition, it could be noticed that there is no arrangement for any reassessment of non-current assets depending on the real price according to US Financial Accounting Standard Board (FASB), but organizations are needed to examine the deterioration value of non-current assets as stated in FASB Statement No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets (fasb.org 2018). It requires to be cited that these variations have different positive inferences on the applicability and trustworthy presentation of the US corporate financial documents of the business organizations. These variances play an important role to conduct enhancement in the financial documents of the business organizations. It requires to be stated that variation has helped towards the formation of one single accounting model for the accounting analysis of removal or sale of the non-current assets (fasb.org 2018). These assets could be already bought and utilized or they would be newly purchased. The enactment of this standard allows in enhancing the representation of rebated functions for the incorporation of more removable or sale related transactions. Owing to this fact, there would not be any contrast in the accounting transactions of identical incidents and events. Essentially, it requires to be stated that this feature would be mostly useful in bringing enhancement in the system of the reporting of financial data. Nevertheless, it requires to be stated that there are other crucial applications of these features (fasb.org 2018).

The variances would be mainly useful in the determination of various types of application problems that would be given towards the enhancements in conformity with the needed quality and regulations of accounting (fasb.org 2018). All these features would be mostly useful in the advocacy of correspondence and trustworthy presentation of the financial data. The application of these grades would be mostly useful in the removal of the recognized deviations from having two different accounting models for the accounting analysis of non-current assets to be sold by following the selling methods. On the other hand, it requires to be cited that this variance in the accounting data would help the users of the operating statements in the recognition of the main a likenesses and contrasts between the two pairs of economic incidents of the non-current assets of the business organizations (fasb.org 2018). Hence, from the above exploration, it could be observed that the above stated rule of FASB allows in the overall enhancement of the commercial statements of the business organizations by enhancing the accounting analysis of non-current assets.      

Requirement a:

There are some main factors which influence the directors in the method of asset reassessment, they are discussed below:

1. The method of asset reassessment allows in understanding the actual rate of earnings on capital utilization that allows the directors in the evolution of suitable financial schemes.
2. The method of reassessment of assets allows the directors of the organizations in estimating the actual price of the assets, which have been substantially acknowledged from the time of buying them.
3. The method of asset reassessment gives the directors of the organizations with the option of mediating the real value of the assets at the time of unification and purchase.
4. The reassessment method of the assets gives the directors a clear view regarding the resources of the organizations (Rivera et al.2016).

Requirement b:

In the absenteeism of the method of asset reassessment, there would not be any rise or decline in the capital stock of the assets of the business organizations. Owing to this, the organizations could counter unusual sum of loss or profit at the time of asset selling in the real market price. On the other hand, the absenteeism of the scheme of asset reassessment would lead to the decline in the income of the organizations. Essentially, there would be decline in the aggregate sum of assets of the organizations that would impact the financial environment of the organizations (Beatty and Liao 2014).

Requirement c:

The resolution of not to reassess the assets has conflicting impact on the shareholder’s wealth of the organizations. The absenteeism of the reassessment of assets would lead to a decline in the income of the organization. Decline in the income of the organization would earn a low proportion of dividend to the shareholders owing to the decline in income per share. Therefore, the shareholders would be restricted by the organization from getting higher dividend (Barth 2015).

References:

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