Analysing Abacus Property Group to see if the objectives of GPFR is being followed

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Introduction

This report aims to analyze the assigned company “Abacus Property Group” annual financial reports on mentioned criteria of assignment. This report discusses reporting entity status, GPFRs, company’s GPFRs standards, annual report components, company assets and related notes, incentive contracts and users of financial statements. 

Abacus Property Group is a leading Australian real estate investment trust. It was established in 1996 and has a diversified portfolio of investment in real estate opportunities across Australia and New Zealand. It is listed on ASX since 2002 and included in S&P/ASX 200 index. 

Abacus Property Group’s strategy is to invest in capital property opportunities to drive a maximum long term value for share-holders. Its objective is to provide investors with increasing and reliable return rates. It is an integrated property businesses, with a strong track record of achieving returns, built on our core expertise in accessing properties and projects and actively managing them to realize their full value. It has a single office located in Sydney, Australia. It is a flat corporate structure entity.

Investment portfolio of Abacus Property Group is diversified which ranges from office, self-storage, and super convenience retail properties. Rental income from these assets is the largest contributor to the earnings of the Group. Abacus’ disciplined property selection process maintains a firm focus on fundamental real estate value.

Discussion on assignment questions.

A. Discuss the factors to be considered in determining whether an entity is a reporting entity, using your subject company as an example.

An entity (company) is a reporting entity when the stakeholders of are dependent on GPFR (general purpose financial report) to make their important decisions. For example, listed companies, large private companies, educational institutions are reporting entities. For company to be a reporting entity, it has to follow all the Australian Accounting Standards to prepare a GPFR. Whereas a non-reporting entity’s users do not depend on the GPFR, it is permitted to prepare a special purpose financial report. For example, small private companies or not-for-profit associations. These have to apply the measurement and recognition of Australian Accounting Standards with limited disclosure. 

Abacus Property Group is a reporting entity, where the GPFR is used by stakeholders to make important corporate decisions. The stakeholders of this company are employees, contractors, managing agents, security holders, investment community, customers and tenants, government, regulators and community. For all those Abacus Property group prepare their general purpose financial report. 

B. Define, describe and critically discuss the objectives of general-purpose financial reporting (GPFR).

General purpose financial reporting is a system to prepare transparent financial reports to meet the information needs of stakeholders in a general way. These GPFRs include multiple reports, financial statements, events and activities. The prime objective of GPFRs is to provide useful information about entity to the users for accountability and decision making. Public sector entities raise resources from donors, lenders and taxpayers for use in the provision of services to citizens through GPFRs. Information present in the GPFRs is all about financial position of an entity that enable users to identify and claim the resources. It also represent whether the entity has acquired resources economically and used them efficiently and effectively to achieve its goals. Information regarding cash flows of an entity show its liquidity and solvency. It indicates how the entity has used the cash (borrowing or repayment). It also identify from where the cash is received (taxes or investments). GPFRs also provide non-financial information to assist users to better understand and interpret the information. Non-financial information includes matters related to government, compliance with approved budget, service delivery, achievements, reporting period and expectations for future periods.

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