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Essay

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The Accounting Standard AASB 101 Presentation of Financial Statements was made under section 334 of the Corporations Act 2001 and it prescribes the basis for presentation of general purpose financial statements to ensure comparability both with the entity’s financial statements of previous periods and with the financial statements of other entities. It also sets out overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content. By reviewing the current AASB framework, this essay will firstly provide a critical analysis of different measurement bases which is involved in the “Framework for the Preparation and Presentation of Financial Statement”. Secondly is the explanation about the implications of different measurement base use by Commonwealth Ltd and Woolworth Ltd which were chosen from ASX. Finally, this is an exploration of the relationship between accounting information and free market reaction by using the relevant refereed journals. First, this is a looking back about the AASB Framework. On 15 July 2004, The AASB issued the Framework for the Preparation and Presentation of Financial Statements and then begin to present the complied version of this framework was applied for accounting report in annual period on 1 January 2009. In addition, the concepts of framework is become a foundation to prepare and presentation the financial statement for external users such as investor, government, employee, Suppliers, Lenders, customer, public, etc. There are several purposes of AASB Framework: Firstly, in order to develop the future of Australian Accounting Standards, AASB framework is contributed and reviewed all of the existing Australian Accounting Standards. It is also included evaluating proposed International Accounting Standards Board pronouncements. Secondly, so as to promote harmonisation of regulations, accounting standards and procedures concern with the presentation of...