Complete this assignment for the company you have been allocated. Please be careful to use the listed company you have been allocated. Your assignment will not be marked if you use a different company...

ALTIUM LIMITED
ALTIUM LIMITED        2
FROM:
DATE:
SUBJECT: ALTIUM LIMITED
TABLE OF CONTENT
    Sr. No.
     Titles
    Page no.
    1.
    Brief introduction about the company
    3
    2.
    Criteria for determining the reporting entity
    3
    3.
    Discussions on the qualitative characteristics i.e. relevance and faithful representation of the financial information
    5
    4.
    Analysis of the given entity in respect of faithful representation and relevance
    6
    5.
    Conclusion
    9
    6.
    References
    10
Brief Introduction about the Company:
Altium Limited is one of the most renowned public Companies listed in Australian Stock Exchange. The entity is engaged in developing and selling of the computer software for designing of the electronic products. The product of the entity includes Altium designer and tasking. The entity comprises of various segments such as board and system, makers and content and other important segments. The board and system makers segment of the business include outcome from the printed circuit board business for the Americas, Europe, the Middle East and Africa, parts of Asia and also include product sold through partner channel. Makers and content segment of the entity includes outcome from the Octopart. The products and services of the entity include software and hardware, subscription services and other training services. The entity is also engaged in developing the fully cloud electronic design system.
Criteria for determining the reporting entity:
The reporting entity concept is mainly used for reporting requirements and regulations. Tis concept was developed into year 1992 and it the main objective of introduction to reduce compliance burden on the entities which are small in nature and having not large exposure. Further another objective of the concept was to ensure that all the entities should comply with the reporting regulations and accounting standards. Based on this concept all the entity classified as reporting entity is required to prepare its financial statement as per the applicable accounting standard and its interpretation. According to AASB 101 the users who are dependent on financial reports of an organization is generally classified as reporting entity. These financial reports help the users to take wise decision based on the information contained in the financial reports and can take their investment decision wisely. The entities can be in any form i.e. a single legal organization or group of multiple legal entities including joint ventures, subsidiary and associates i.e. consolidated entities as a group. These entities can also further be categorized into several categories such as listed or private companies or public companies not largely share owned. The concept of reporting entity can be better understood with the help of below mentioned diagram:
Thus from the above representation it is clear that the users depending on the financial statement are not clear to the management then the entity considers three factors which includes separation of the management and the entity, influence regarding the economic and political factors for the welfare of the external parties and the greater size of the entity such as on the basis of the higher asset. Hence on the basis of the above factors the entity is classified as the reporting entity. Further reporting entity should also be evaluated in terms of twenty to twenty- two of SAC 1 (Deloitte Touche Tohmatsu. 2018).
Further on the basis of the standard defined by the AASB the reporting entity is required to comply with the requirement of preparing the general - purpose financial statement. As per AAS 1053, there are two types of financial reports i.e. Tier 1 and Tier 2. Under first category, the financial statements are prepared based on local accounting standard in combination with IFRS. Under second category, there is low disclosure requirements and having less compliance and reporting burden on entities. First category is mainly for ASX listed companies and second category deals other than listed entities. Thus, the reporting entity is in requirement to make statement of compliance in accordance with IFRS in the notes to financial statement and the same will be disclosed in the declaration of the directors (Darryn Rundell 2018). Further the notes are also prepared by the entity in relation to accounting...