Boral Limited

Code: BLD
Sector: Materials
 Executive Summary

The main aim of this report is to evaluate and analyze the detailed
understanding of the Conceptual Framework of Accounting system of
Boral Limited in daily business life. It also shows the role of the
Conceptual framework to maintain the accounting standard and to
support in a financial statement. Compliance of Boral Limited, the
objectives, and importance of conceptual framework has been discussed
in the first part. Whereas in the second part the recognition criteria of the
Boral Limited has been discussed in detail. As moving towards the last
part attachment of the Boral limited with major qualitative characteristics
has been discussed.
Table of Contents

Introduction …………………………………………………………
loyalty to objectives and conceptual structure……………….
Compliance with the recognition criteria ………………………
Assets …………………………………………………………………
Liabilities …………………………………………………………….
Equity …………………………………………………………………
Revenue ………………………………………………………………
Expenses …………………………………………………………….
Overall consent/ compliance …………………………………....
Conclusion and recommendation ………………………………
References ………………………………………………………….
Introduction
As looking towards the current scenario of the world, different
organizations have faced various kinds of problems and issues, which
have created conflict related to the financial position and work related to
accounting. According to Carmen et al., (2014) argued organizations
have struggled due to complex and financial accounting issue which are
completely based on the companies’ complex characteristics. Therefore,
organizations must totally comply with its principle and standard of the
conceptual framework to produce a financial report and that can be
useful to handle and tackle the complex financial issues which arise in a
company. During 1989 when International Accounting Standard Board
established the concept regarding the complex framework which leads to
arising certain change in the accounting sector and was evolutionary for
preparation of financial statement (Nobes 2014). This was crucial for the
companies to produce their financial statement. As looking towards Boral
company which is international group established in 1946 with the view
to operate and produce building products and construction material
(Boral 2017). Top 100 lists produced on 1 April 2018 clearly shows the
Boral limited is listed in the top 100 lists of Australian Stock Exchange
(ASX 2017). Boral limited is categories as a materials sector and coded
as a BLD.

Loyalty to objectives and conceptual structure

As looking towards the overview of the introduction part, all companies
should adhere to conceptual framework and requirement. The main
objective of the conceptual framework is to provide better ideas and
framework to prepare a financial statement of the company. The
conceptual framework is also taken as a key factor to solve the
controversy of accounting sector. As moving toward Boral limited it is
popular and known for their consent related to the accounting
requirement.
The Latest Annual report published by the Boral Limited is totally based
on the conceptual framework criteria of the Australian Accounting
Standard Board(AASB). It also complies with the corporate act 2001 and
International Accounting Standard Board (Boral 2017). The main
purpose to produce an annual report is to provide information to the
shareholder regarding the company financial position.

As looking towards the statement of compliance of Boral limited it is

clearly stated that the financial report is the consolidated report of Boral
limited ABN 13008421761 which states that company is profit oriented
with limited shares and these shares can be exchanged in Australian
Security Exchange (Boral 2017). Financial statements are completely
based on the framework of the AASB. AASB stated that all company
should be familiar with the different conceptual framework and some are
discussed below.

First objectives:
Investors and creditors of the company always want to get clear and
complete information from the company. Therefore, the business
organization must provide required financial information to their
stakeholders and creditors. According to Fasb (2017), all the financial
information provided by the company should be relevant and supportive
to make different financial decisions. Particularly looking on Boral
Limited it completely based on AASB guide to prepare the financial
statement. Therefore, the Boral Limit provide complete and useful
information to its stakeholders, creditors and other users based on the
AASB framework and work within its criteria.

Second objectives:
The Secondary objective of the company is to provide financial
information in the financial statement to identify the cash flow information
of the company by stakeholders and other users. Cash flow information
provided by the company can be useful to their shareholder to identify
the uncertainty of company, time and the statement of the cash flow. The
annual report produced by Boral Limited clearly shows the cash flow
statement which is essential for business users and the shareholders
(Fasb 2017). Peoples who are directly and indirectly related to the
company like investors, stakeholders and creditors can get clear and
complete information from cash flow statement. Thus, it helps to
evaluate the financial position of the company and take further decision.
Third objectives:
All the company and business organization should provide complete and
accurate information about economic resources of the company like
assets, equity, and liability to their stakeholders. This information can be
collected on the balance sheet of the company. The Balance sheet
provides information related to all the assets, company liability and the
equity (Fabs 2017). Boral limited prepare its annual report based on the
AASB, IASB, IFRS and the corporate Act 2001 which clearly states that
all information provided in the Annual report is correct and complete.
Therefore, balance sheet of the Boral Limited has clearly discussed the
three aspects of the conceptual framework.

Compliance with the recognition criteria

All companies should work under the conceptual framework provided by

AASB. Therefore, conceptual framework provides the certain criteria for
companies to identify their financial aspects like assets, liabilities, and
equity. Firstly, all detail discussion about the assets has been done and
in second liabilities and lastly equity has been discussed. All three
aspects have been categories of financial, economic and cost value and
discussed with their consent and recognition criteria with the Boral
Limited.
Assets
Boral Limited used to identify the receivable amount by looking after the
sales invoice. Sales invoice was taken as a key element to look after to
find receivable amount (Boral 2017). Therefore, Boral Limited figure out
receivable amount from invoice and interest rate is taken to use
amortized costs.
Receivable:
Initially, Boral Limited identify the amount receivable by invoice issued to
the customer during credit sales and that amount is been received from
the customer after the deadline.
Inventories:
Boral Limited valued inventories at lower cost and estimated selling price
is been represented by net realizable value. While looking toward the
fixed assets like building, and plant and machinery their values are been
identified by deducting depreciation and impairment loss from the actual
cost (Boral 2017).
Intangible assets:
Intangible assets are distinctive and related to the firm which includes
company goodwill, brand, trademark and the company mission and
vision (Rossella et al., 2017). Looking towards Boral limited all the
Goodwill and other assets like brand, company efficiency, and patent are
taken as an intangible asset which plays a vital role to identify the
company position.

Liabilities:
Liabilities of the company is the financial obligation of the company
which with either increase or decrease the company income from the
past transaction (Ma et al., 2018). Boral Limited have the different
concept regarding liabilities whereas, provision can be seen in the
balance sheet. Boral Limited identify the Present obligation from its past
activities and further steps are taken with the clear observation of
obligation. Provision of Boral Limited is been identified by deducting
future cash flow and the effects made by Pre- Tax (Boral 2017).
Equity:
Ordinary Shares issued by Boral Limited are considered as a capital and
equity of the company and all the issued shares are fully paid. All the
ordinary shares have a voting power and eligible to get a dividend (Boral
2017). The Incremental cost of the company directly affects the company
equity so, it is deducted from equity.

Revenue:
Product and the service are the main sources of income for the
company. Boral Limited records its revenue when it transfers its
ownership and risk to the other and the benefits provided to the buyer. If
service or benefit provided by the company fully satisfy the customer
without any disturbance and hinderance then it is identified as revenue
(Boral 2017). Revenue collected from sales of goods is been identified
from the time of contact made between buyer and company till the
contract expires.
Expenses:
Boral Limited records are expected during the time of expenses is
confirmed not when it occurs and company records its expenses in a
different way. All the expenses are recorded separately so the company
can identify the range of expenses made by company and areas which
effects the company income and ability (Boral 2017). The main reason to
record expenses separately is to disclose the financial position and to
identify the performance.

Overall consent/ compliance

Boral Limited has always been following the standard maintained by
AASB and all reports are being produced based on the conceptual
framework designed by AASB. The main concept and purpose of the
conceptual framework are to maintain the standard of the financial
reports produced by the companies. As looking towards the overall
consent of Boral Limited to meet the characteristics of the conceptual
work all the information proved by Boral Limited should be relevant and
meet the criteria assigned by AASB (AASB 2017). Boral Limited has
always provided complete and relevant information about the financial
report to its stakeholders
The Financial report prepared by companies should be realistic and
should comply with the real world (FASB 2017). The Report should be
comparable, verifiable and does not mislead and divert people. The
Financial report prepared by Boral limited is always based on the AASB
standard and provide clear and complete information to investors and
other partners based on their real-life activities. The Company should be
aware that the report should be clearly comparable to customers with
other company and their financial status (Henderson et al., 2015).
Therefore, the report published by Boral is beneficial because it provided
current information and have all the information (EY 2017).
Boral limited financial report is clear and simple and it includes graph
and table which makes people understand it clearly (EY 2017). They
also provide additional information to all the financial outcomes so all the
people can understand it clearly.

Conclusion and Recommendation

The complete study of the annual report of Boral Limited shows that it
has been bounded by the AASB conceptual framework. It is also being
taken as a key point to prepare the financial report looking after the past
obligation. It has been improving its qualitative characteristics to provide
complete and relevant financial information to stakeholders. Therefore, I
would like to recommend Boral to simply its report observing the
customers’ circumstances and provide data in sequence.
References:
Aasb.gov.au 2017, Conceptual Framework for Financial reporting.
[Online] Available at: http://www.aasb.gov.au (Accessed 15 April 2018).

Australian Securities Exchange – www.asx.com.au, 2017, Company

Details – BLD -ASX -Australian Securities Exchange. [Online] Available
at: http://m.asx.com.au/m/company-info (Accessed 15 April 2018).

Boral 2017, About Boral. [Online] Available at: https://www.boral.com.au

(Accessed 16 April 2018).

Boral.com 2017, Annual Report 2017. [Online] Available at:

http://www.boral.com (Accessed 16 April 2018).

Carmen, D.F. M., Maria Rosario, G. R. & Marek, P 2014, Top

management demographic characteristics and company performance.
Industrial Management & Data System, Vol. 114, No. 3, pp. 365-386.
EBSCOhost. (Viewed 16 April 2018). https://web.b.ebscohost.com.au

Ey.com 2017, Conceptual Framework: Objectives and Qualitative

Characteristics. [Online] Available at: http://www.ey.com (Accessed
16April 2018).

Fasb.org 2017, Conceptual Framework for Financial Reporting:

Objective of Financial Reporting and Qualitative Characteristics of
Decision-Useful Financial Reporting Information. [Online] Available at:
http://www.fasb.org (Accessed 16 April 2018).
Henderson, S, Peirson, G, Herbohn, K, & Howieson, B 2015, Issues in
financial accounting. Pearson Higher Education AU. (Accessed 16 April
2018).
Ifrs.org 2017. IFRS. [Online] Available at: http://www.ifrs.org (Accessed
17 April 2018).

Ma, C, Ruan, Y, & Zheng, K 2018, Product market competition, assets

strategy and enterprise operating liabilities. Journal of Intelligent & Fuzzy
Systems, Vol. 34, No. 2, pp. 1033-1043. EBSCOhost (Viewed 15 April
2018) https://web.b.ebscohost.com.au

Nobes, C 2014, International Classification of Financial Reporting 3e.

Routledge. (Accessed 15 April 2018).

Rossella, C, G, T.C, Melewar & Kelly, D Martin 2017. Guest Editors’

introduction: Ethical Management of Intangible Assets in Contemporary
Organizations, Business Ethics Quarterly, Vol. 27, No. 3, pp. 381-392.
EBSCOhost (Viewed 16 April 2018) https://web.b.ebscohost.com.au