GENERALLY ACCEPTED ACCOUNTING PRINCIPLES 2 Generally accepted accounting principles GAAP are rules that guide the preparation of financial statements Every public traded company has to prepare financial statements every year For investors and other stakeholders to determine the financial health of a firm each public traded company must follow these rules Deegan 2012 The focus of this paper is to examine the application of GAAP in Australia For the discussion the financial statements of Alumina Limited with be used Question 1 Generally the gross income of a company is calculated by subtracting the total expenses incurred by the company from the revenues accrued through sale of goods or other holdings Companies that are publicly traded release their income statements or the profit or loss statement Deegan 2012 Through this statement one can be able to identify the gross income or the net income of the company Alumina Ltd publishes annual reports on its income and is represented as a summary of its statement of profit or loss and other comprehensive income In the statement the company provides information on total revenues total profit for the year and total comprehensive income for the specific year In its 2016 2017 report the company disclosed its revenues as 4 057 million US dollars while profit for the year was 48 9 US million
