Introduction

In this study the discussion will be made on financial reporting in the organizational context, At the same tiitie. the study will also make a discussion on Australian Accounting Standard Board or AASB. In the last section of the study, the discussion will be made on the capital structure of four companies. which belong from the same industry The study  will focus on the capital structure of four retail companies in Australia

Corporate regulations

In the introductory section of this study it has been mentioned that financial reporting is one of the most essential activities for the firms. The decision making of the stakeholders highly depends on the financial reporting and disclosure of the company. In the other words. it can be stated that the interests of the stakeholders are associated with the financial reporting of the business (Cereola et al., 2017). Considering this fact, it must be mentioned that the financial accounting and reporting must be done as per the regulations not as per the managers’ sill.

If this matter is critically analyzed. it can be stated that managers are the internal stakeholders of the business and due to that their interests are also associated with the performance and financial position of the company. It is vely natural that if the activities of the managers are not regulated or restricted by any law. they will try to fulfil their interests as much as possible. This may hamper the interests of the other stakeholders. For example. shareholders are the owners as well as key stakeholders of the business and their interest is to maximize the income level of the busines5 and return from the business. In this context. if the activities of the managers are not regulated, they will definitely try to maximize their revenue, which will increase the cost of the business and decrease the income level and return percentage of the shareholders (Hellman «i at., 2018). Hence, in that case the interests of the shareholders will be hampered. However, in this context, it is also important to be mentioned that if the managers’ activities are not properly regulated shareholders may influence them illegally and unethically to maximize their interests, which is also not right for the other stakeholders and fumre of the business.

Therefore, from this discussion, it can be stated that the activities of the managers within an organizational territory must be regulated @ the proper legal system and the company must not allow the managers to disclose the financial accounting information voluntarily.

Accounting standards setting

Australian Accounting Standard Board or AASB is the main authorized body that regulates the financial activities of every business in Australia. The primary target of AASB is to develop a principle-based accounting system in Australia and contribute to the confidence of the stakeholders in the Australian economy. Kabir ct al., (2017) stated that the accounting rules and regulations under the AASB have been developed in accordance to the rules and

regulations of International Financial Reporting Standards or IFRS. It means the AASB has closely associated north IFRS Non . in this point, it is important to identify hon the AASB is integrated or takes part in the IFRS In this context. it can be stated that one of the key requirements of I FRS is the full disclosure of accounting or financial information through financial reposing (Creola ei o/ , 2017) On the other hand, the AASB standards liar e also mandated the full disclosure principle forex en business in Australia It means by mandating the full disclosure principle the AASB has taken part into I FRS.

Similarly. there are many other regulations like, the valuation of fixed assets or PPE of the business  As per the IFRS standards there is no specific MLC or method through which the I value of the fixed assets or PPE of the company is needed to be determined. The organizations may either follow» the historical cost method or fair value method or mixed-method for determining the i’aliie. On the other hand. the AASB has also not mandated any specific file or method for determining the value ofcompaiij ’s fixed assets or PPE (Xu er o/.. 2017). It means from this perspective again AASB has taken part in the IFRS system

Following the IFRS rules and regulations is not compulosory for the companies under the member countries of IASB. It is because the rules and regulations under the I FRS liar e been developed bi considering the rules and regulations tinder International Accounting Standard Board or IASB. It means the member countries of IASB are already follow ing the rules and regulations under the I FRS (Kabir ‹/ e/., 2017). Moreover. the rules under the IASB are more sophisticated and stronger than the rules under IFRS. Due to this if the companies under the member countries of IASB follow 'ing the I ASB properly tliej do not need to follow the IFRS, Hence. IFRS is not compulsory for the companies in IASB member countries.

Owner's Equity

Woolworths Limited