Free Samples
HA2032 Corporate And Financial Accounting
.cms-body-content table{width:100%!important;} #subhidecontent{ position: relative;
overflow-x: auto;
width: 100%;}
HA2032 Corporate And Financial Accounting
0 Download11 Pages / 2,720 Words
Course Code: HA2032
University: Holmes Institute
MyAssignmentHelp.com is not sponsored or endorsed by this college or university
Country: Australia
Question:
(i) Do your own research and critically discuss whether the financial accounting and reporting should be regulated or manager should be allowed to disclose financial accounting information voluntarily.
(ii) Do your own research and critically explain how the Australian Accounting Standards Board take part in the global accounting standard setting process (i.e. in setting IFRS). Why is the IFRS set by the International Accounting Standards Board (IASB) not compulsory for the member countries of IASB?
Select 4 public limited companies listed on the Australian Securities Exchange (ASX) that are in the same industry. Go to the website of your selected companies. Then go to the Investor Relations section of the website. This section may be called, “Investors”, “Shareholder Information” or similar name.
In this section, go to your firms’ annual reports and save to your computer your firms’ latest annual reports consecutively for last four years. Do not use your firms’ interim financial statements or their concise financial statements. Please read the financial statements (balance sheet, income statement, statement of changes in owner’s equity, cash flow statement) very carefully. Also please read the relevant footnotes of your firms’ financial statements carefully and include information from these footnotes in your answer.
You need to do the following tasks:
(iii) From your firms’ financial statements, list each item of equity and write your understanding of each item. Discuss any changes in each item of equity for your firms over the past four years articulating the reasons for the change.
(iv) Provide a comparative analysis of the debt and equity position of the four firms that you have selected.
Answer:
Financial Accounting is very important aspect as through this the financial statements of the company is prepared which shows the position of the company to outside people like shareholders, creditors, suppliers ,buyers and investors. Taking the help of the standardised accounting procedure financials of the company is prepared which include a lot of detailed report and future aspects of the company(Accounting Edu.org, n.d.).There are various reasons which talk about the need to control the financial reporting, as the users to the financial statement are many and on the basis of financial information interpretation the users make the investing decision in the company, but these different users to the financials are allowed to prepare the financial statements on their own way than it will be prepared accordingly to meet there individual demand. If this happens than different financial statements will be interpreted in a different manner. All the country follow different set of accounting standards and accounting procedure so there to need for accounting regulation and parity.
These disclosures solve many issues between the management of the company and users to the financial statement. It also states that the directors not only present the financial statement to the outside people but also appoint an independent auditor to express opinion on the financial statement and state whether the financial statement reflects a true and fair view and are free from any material misstatements .It also becomes users to do make comparison with other group company in similar industry.( The Student Room Group Ltd. , n.d.)
Therefore all the transactions recorded in the financial statement must be only monetary in nature. The choice of accounting method must be such which is reliable and easy to understand for others and make comparison with other report easily. However accounting standards sometimes may have a negative impact for the prepares of financial statement as no experiment can be done on accounting transactions treatment, but still there is a need that the financial statement and accounting are regulated so that the users can easily interpret it and comparable and saving of time.
The Australian Accounting Standard Board is a Government Agency, which reports to parliament of Australia while International Accounting Standard Board is a private organisation which is set up in London as is of independent nature. The AASB contributes to the IASB through funding and co-operating with IASB by replying to the draft discussion, reviews, aligning vision with IFRS, adopting IFRS etc. The IASB in turn cooperates with its members for convergence in accounting standard in the world.(Australian Accounting Standard Board, n.d.)
The process flow is detailed here-in-below:
AASB identifies technical issue which require look through;
Theissues are referred to IASB;
The issue shall be added to agenda;
The AASB shall do research and consider the issue;
A consultation shall take place with stakeholders;(Australian Accounting Standard Board, n.d.)
Issuing of standard or other pronouncement;
The report shall be submitted to IASB for comment;
Implementation and compliance
IFRS is not mandatory on member countries of IASB on account of following reasons:
To adopt IFRS is not a simple process it requires a lot of convergence from national standard to IFRS.
The company that have chosen under part B of the report are four Australian listed entities under basic mineral category. These companies are engaged in the exploration of minerals. The name of the entities chosen is:-
Orica Limited:
Newcrest Mining Limited;
Orocobre Limited;
Santos Limited;
Brief Profile of the companies
Orica Limited is engaged in providing commercial explosives for blasting in mines and infrastructure market. It is global leader in providing ground service for the purpose of mining and tunnelling.
The equity profile breakup of the company has been provided here-in-below:
($Mio)
Sl NO
Particulars
2014
2015
2016
2017
Equity
1
Ordinary Shares
1975
1954.4
2025.3
2068.5
2
Reserves
-607
-216.8
-489.9
-565.8
3
Retained Earnings
2895
1247
1247.1
1459.6
Total Equity attributable to ordinary shareholders of Orica Limited
4263
2984.6
2782.5
2962.3
4
Non -controlling interest in controlled entities
136.1
2.6
0.7
1.2
Total Equity
4399.1
2987.2
2783.2
2963.5
(Anon., 2014) (Orica Limited, 2015) (Orica Limited., 2016)(KPMG, 2017)
The following elements are part of equity of the company:
Ordinary shares which are issued by the company under Initial public offer to the public or at the time of incorporation of shares. These shares are the base of the setup of the company and holders of such shares are owners of the company. Further, these shares are repaid at last in case of winding up of the company. On perusal of the above table one can understand that the ordinary shares of the company have undergone a change on account of issue of further shares under various schemes of the company like dividend reinvestment plan, GEESP plan. The breakup of the same has been provided here-in-below:
Sl NO
Particulars
2014
2015
2016
2017
1
Opening Balance of the ordinary share issued
1877.9
1877.9
1975
2025.3
2
Share issued under dividend reinvestment plan (13-12-13)
47.4
47.4
3
Share issued under dividend reinvestment plan (01-07-14)
34.5
34.5
4
Share Issued – Loan Repayment
13.9
13.9
5
Share issued under GEESP Plan
1.3
1.3
6
Balance at the end of year
1975
1975
7
Share movement under buy back
-21.7
-21.7
8
Share issued under GEESP Plan
1.1
1.9
0.6
9
Share issued under dividend reinvestment plan
70.1
39.2
10
Deferred shares issued to settle Short Term Incentive
3.4
11
Ordinary Share
1954.4
2025.3
2068.5
Further, it can be seen that company has bought back its own share in 2015.
Reserves: Reserve means something that has been retained for future use resources forms part of equity and show the intrinsic value of the share of the company.(Web Finance Inc, 2018)A positive reserve indicates a strong future prospect of the company. The reserve in the books of company generally include:
Share based payment which are paid to employees and key managerial personnel of the company;
Cash flow hedging reserve is created by an entity to reduce the impact of change in estimated cash flows of a financial asset or liability;
Foreign currency translation reserve is created in terms of requirement of AASB to account for consolidation of foreign entities under different method like current and temporal;
Retained earnings: This shows the accumulation of profits of the company which are not distributed as dividend to ordinary shareholders of the company rather they are retained for expansion and emergency projects of the company. The retained earnings of the company have shown a significant decline on account of significant loss reported by the company for that financial year.
Non- Controlling interest: This represents the share of minority shareholders who do not exercise significant control over the company and are in minority. These generally represent that fraction of the company which is not owned in the subsidiary by the parent company. The flow of non-controlling interest over the 4 year has been presented here-in-below:
Sl NO
Particulars
2014
2015
2016
2017
1
Contributed Equity
66.6
66.6
66.6
66.6
2
Reserves
-16.9
-1.9
-7.8
-12.3
3
Retained Earnings
86.4
-62.1
-58.1
-53.1
4
Non- controlling Interest
136.1
2.6
0.7
1.2
On perusal of the above table one can understand that the non-controlling interest has fallen down drastically on account of retained earning reducing drastically in the backdrop of losses in the company.
Analysis of debt position of the company: For the purpose of this, only interest bearing liabilities has been considered as debt. Further cash and cash equivalent is reduced to compute net debt for the company. In addition, to estimate the position capital gearing ratio and debt to equity ratio has been computed. The tabulation has been shown here-in-below:
Sl NO
Particulars
2014
2015
2016
2017
1
Interest Bearing Borrowings
2499.9
2300
1877.4
1957.8
2
Less Cash and Cash equivalent
-263.2
-273.9
-328
-516.9
3
Net debt
2236.7
2026.1
1549.4
1440.9
4
Total Equity
4399.1
2987.2
2783.2
2963.5
5
Net debt and Total Equity
6635.8
5013.3
4332.6
4404.4
6
Debt to Equity Ratio
50.84%
67.83%
55.67%
48.62%
7
Gearing Ratio (%)
33.71%
40.41%
35.76%
32.72%
On perusal of the above, the net debt of the company is decreasing on account of increasing cash and cash equivalent in the company.
Newcrest Mining Limited
Newcrest Mining Limited is engaged in gold mining. It is engaged in exploration, mine development and sale of gold etc.(Reuters, 2018)
The equity profile breakup of the company has been provided here-in-below:
Sl NO
Particulars
2014
2015
2016
2017
Equity
1
Issued Capital
11679
11673
11666
11657
2
Retained Earnings
-5055
-4679
-4347
-4154
3
Reserves
517
-145
-278
-53
Total Equity attributable to ordinary shareholders of Orica Limited
7141
6849
7041
7450
4
Non -controlling interest in controlled entities
119
108
79
84
Total Equity
7260
6957
7120
7534
(Newcrest Mining Limite, 2014)(Newcrest Mining Limited, 2015)
On perusal of the above table, one can understand that the equity of the company has not undergone any significant change. However, minority interest has reduced in the company. Further, the retained earnings of the company are slowly recovering. A detailed analysis is presented here-in-below:
Movement in issued capital
The issued capital of Newcrest mining has not undergone a sea change and the detail of the same has been tabulated here-in-below:
Sl NO
Particulars
2014
2015
2016
2017
1
Opening Balance
11679
11679
11673
11666
2
Share Issued during the year
3
Dividend reinvestment plan
10
4
Share repurchased and held in treasury
-6
-7
-19
5
Issued Capital
11679
11673
11666
11657
Further, the company has bought back its shares of minimal amount during the period of 4 years.
Retained Earnings
The retained earnings of the company are negative symbolising company has incurred huge losses in the past and has been trying to recover the same.
Reserves
The reserves of the company have turned negative on account of losses while consolidating books of subsidiary in the account of parent. The detailed breakup of the same has been tabulated here-in-below:
Sl NO
Particulars
2014
2015
2016
2017
1
Equity Settlement Reserve
No
information
70
78
88
2
Foreign Currency Translation reserve
-246
-340
-168
3
Hedge Reserve
6
-16
27
4
Fair Value Reserve
25
5
Total
-145
-278
-53
Further, fair value reserve is created against the valuation of assets in terms of AASB 13 to account for increase in value of asset
Non-Controlling interest
The non-controlling interest has reduced drastically on account of reserve losses.
Debt Position
The analysis of debt position has been presented here-in-below:
Sl NO
Particulars
2014
2015
2016
2017
1
Net debt
3935
2889
2107
1499
2
Total Equity
7260
6957
7120
7534
3
Net debt and Total Equity
11195
9846
9227
9033
4
Debt to Equity Ratio
54.20%
41.53%
29.59%
19.90%
5
Gearing Ratio (%)
35.15%
29.34%
22.84%
16.59%
On perusal of the above table, one can understand the net debt of the company is falling. Further, the gearing ratio has decreased on account of significant reduce in net debt on account of increase in cash reserve of the company.
Orocobre Limited
The company primarily operates in Argentina and is a mining giant. (Reuters, 2018)The movement of equity of the company over the period of four years have been presented here-in-below:
Sl NO
Particulars
2014
2015
2016
2017
Equity
1
Issued Capital
123
158.46
242.24
243.18
2
Retained Earnings
83.04
82.19
60.28
80.7
3
Reserves
-54.353
-76.53
-111.79
-105.86
Total Equity attributable to ordinary shareholders of Orica Limited
151.687
164.12
190.73
218.02
4
Non -controlling interest in controlled entities
-1.132
-1.06
-1.31
Total Equity
150.555
163.06
189.42
218.02
( Orocobre Limited Pty Ltd, 2017)
On perusal of the above table, one can understand that the equity of the company has increased over the period and the non-controlling interest of the company has been wiped off from the balancesheet.
Movement in issued capital
The issued capital of the company has increased significantly on account of fresh issues and exercise of options.
Retained Earnings
The retained earnings of the company are falling over the years of account of losses in the business
Reserves
The reserves of the company have been falling drastically over the year. The movement of the same has been detailed here-in-below
Sl NO
Particulars
2014
2015
2016
2017
1
Option Reserve
1.7
2.62
3.22
2.97
2
Foreign Currency Translation reserve
-47.64
-74.37
-109.61
-104.92
3
Hedge Reserve
-2.56
-4.5
-5.22
-3.75
4
Other Reserve
-0.28
-0.18
-0.17
5
Total
-48.5
-76.53
-111.79
-105.87
The main reason for such fall is the consolidation of accounts of subsidiary in the books of parent on account of which losses have been recognised as FCTR.
Non-Controlling interest
The non-controlling interest has been negative for three years and wiped out in 2017.
Debt Position
The analysis of debt position has been presented here-in-below:
Sl NO
Particulars
2014
2015
2016
2017
1
Net debt
-11.49
10.45
-21.92
-40.82
2
Total Equity
150.555
163.06
189.42
218.02
3
Net debt and Total Equity
139.065
173.51
167.5
177.2
4
Debt to Equity Ratio
-7.63%
6.41%
-11.57%
-18.72%
5
Gearing Ratio (%)
-8.26%
6.02%
-13.09%
-23.04%
On perusal of the above table, one can understand that the company is having significant cash reserves on account of which net debt is negative.
Santos Limited
Santos Limited is a natural gas company. The company is engaged in exploration, development, production and sale of natural gas.(Reuters, 2018)
The movement of equity of the company over the period of four years have been presented here-in-below:
Sl. No.
Particulars
2014
2015
2016
2017
Equity
1
Issued Capital
5,762
8,119
8,883
9,034
2
Reserves
-335
-699
-510
51
3
Retained Earnings
2,278
1
-1,293
-1,934
4
Non-controlling Interest
-4
–
–
–
Total Equity
7,701
7,421
7,080
7,151
(Santos Ltd, 2016)(Anon., 2017)
On perusal of the above table, one can understand that the equity has not undergone much movement but has decreased by 10% on account of falling retained earnings of the company. Further, the losses are on account of market prices of gas. The non-controlling interest has been wiped off from the balance sheet. Further, the reserves have decreased on account of foreign currency translation reserve as stated above.
Debt Position
The analysis of debt position has been presented here-in-below:
Sl. No.
Particulars
2014
2015
2016
2017
1
Net Debt
7,490
4749
3492
2731
2
Total Equity
7,701
7,421
7,080
7,151
3
Net Debt and Total Equity
15,191
12,170
10,572
9,882
4
Debt to Equity Ratio
97.26%
63.99%
49.32%
38.19%
5
Gearing Ratio
49.31%
39.02%
33.03%
27.64%
On perusal of the above table, one can understand that net debt of the company has fallen near about three fold on account of cash reserves of the company.
References:
Orocobre Limited Pty Ltd, 2017, Annual Report, [Online] Available at: https://www.orocobre.com/news/mdocs-posts/annual-report-2017/[Accessed 21 September 2018].
The Student Room Group Ltd. , n.d.,Discuss the Need for Regulation in Financial Reporting,[Online] Available at: https://www.markedbyteachers.com/gcse/business-studies/discuss-the-need-for-regulation-in-financial-reporting-1.html[Accessed 21 September 2018].
Accounting Edu.org, n.d, What is Financial Accounting?[Online] Available at: https://www.accountingedu.org/what-is-financial-accounting.html[Accessed 21 September 2018].
Anon., 2014, Orica Ltd, [Online] Available at: https://www.orica.com/Investors/annual-reporting-2014#.W6UxhBHhXIV[Accessed 21 September 2018].
Anon., 2017, Annual Report, [Online] Available at: https://www.santos.com/media-centre/announcements/2017-annual-report/[Accessed 21 September 2018].
Australian Accounting Standard Board, n.d. The Standard-Setting Process. [Online] Available at: https://www.aasb.gov.au/About-the-AASB/The-standard-setting-process.aspx[Accessed 21 September 2018].
Australian Accounting Standard Board, n.d, What is AASB, [Online] Available at: https://www.aasb.gov.au/About-the-AASB/Frequently-asked-questions.aspx[Accessed 21 September 2018].
KPMG, 2017, Annual Report 2017 Orica,[Online] Available at: https://www.orica.com/ArticleDocuments/1762/AR17_Orica_Annual_Report_WEB.PDF.aspx [Accessed 21 September 2018].
Newcrest Mining Limite, 201, 2014 Annual Report, [Online] Available at: https://www.newcrest.com.au/investors/reports/annual/2014-annual-report[Accessed 21 September 2018].
Newcrest Mining Limited, 2015, 2015 Annual Report, [Online] Available at: https://www.newcrest.com.au/investors/reports/annual/2015-annual-report[Accessed 21 September 2018].
Orica Limited., 2016, Orica 2016 Annual Report, [Online] Available at: https://www.orica.com/News—Media/orica-2016-annual-report-released#.W6UvphHhXIU[Accessed 21 September 2018].
Orica Limited, 2015. Orica Annual Reporting 2015. [Online] Available at: https://www.orica.com/Investors/annual-reporting-2015#.W6UwzRHhXIV[Accessed 21 September 2018].
Reuters, 2018. Newcrest Mining Ltd. [Online] Available at: https://www.reuters.com/finance/stocks/overview/NCM.AX[Accessed 21 September 2018].
Reuters, 2018. Reuters. [Online] Available at: https://www.reuters.com/finance/stocks/lookup?searchType=any&search=ORE.AX%29[Accessed 21 September 2018].
Reuters, 2018. Santos Ltd. [Online] Available at: https://www.reuters.com/finance/stocks/overview/STO.AX[Accessed 21 September 2018].
Santos Ltd, 2016. 2016 Annual Report. [Online] Available at: https://www.santos.com/media-centre/announcements/2016-annual-report/[Accessed 21 September 2018].
Web Finance Inc, 2018, reserves,[Online] Available at: https://www.businessdictionary.com/definition/reserves.html[Accessed 21 September 2018].
Free Membership to World’s Largest Sample Bank
To View this & another 50000+ free samples. Please put
your valid email id.
Yes, alert me for offers and important updates
Submit
Download Sample Now
Earn back the money you have spent on the downloaded sample by uploading a unique assignment/study material/research material you have. After we assess the authenticity of the uploaded content, you will get 100% money back in your wallet within 7 days.
UploadUnique Document
DocumentUnder Evaluation
Get Moneyinto Your Wallet
Total 11 pages
PAY 7 USD TO DOWNLOAD
*The content must not be available online or in our existing Database to qualify as
unique.
Cite This Work
To export a reference to this article please select a referencing stye below:
APA
MLA
Harvard
OSCOLA
Vancouver
My Assignment Help. (2021). Corporate And Financial Accounting. Retrieved from https://myassignmenthelp.com/free-samples/ha2032-corporate-and-financial-accounting/australian-account-standard-board.html.
“Corporate And Financial Accounting.” My Assignment Help, 2021, https://myassignmenthelp.com/free-samples/ha2032-corporate-and-financial-accounting/australian-account-standard-board.html.
My Assignment Help (2021) Corporate And Financial Accounting [Online]. Available from: https://myassignmenthelp.com/free-samples/ha2032-corporate-and-financial-accounting/australian-account-standard-board.html[Accessed 18 December 2021].
My Assignment Help. ‘Corporate And Financial Accounting’ (My Assignment Help, 2021)
My Assignment Help. Corporate And Financial Accounting [Internet]. My Assignment Help. 2021 [cited 18 December 2021]. Available from: https://myassignmenthelp.com/free-samples/ha2032-corporate-and-financial-accounting/australian-account-standard-board.html.
×
.close{position: absolute;right: 5px;z-index: 999;opacity: 1;color: #ff8b00;}
×
Thank you for your interest
The respective sample has been mail to your register email id
×
CONGRATS!
$20 Credited
successfully in your wallet.
* $5 to be used on order value more than $50. Valid for
only 1
month.
Account created successfully!
We have sent login details on your registered email.
User:
Password:
Are you looking for a math solver who can provide you with CPM homework help on time? Well, look no further as MyAssignmenthekp.com is here with an array of math solving services for students all around the globe. And the services are quite pocket-friendly. It’s true that Solving math problems aren’t exactly delightful for everyone. So, students who often face trouble with their CPM homework, ask on the web “who can do my math homework”. We take great pride in saying that MyAssignmenthelp.com is the first choice for thousands of students when it comes to geometry homework answers.
Latest Management Samples
div#loaddata .card img {max-width: 100%;
}
MPM755 Building Success In Commerce
Download :
0 | Pages :
9
Course Code: MPM755
University: Deakin University
MyAssignmentHelp.com is not sponsored or endorsed by this college or university
Country: Australia
Answers:
Introduction
The process of developing a successful business entity requires a multidimensional analysis of several factors that relate to the internal and external environment in commerce. The areas covered in this current unit are essential in transforming the business perspective regarding the key commerce factors such as ethics, technology, culture, entrepreneurship, leadership, culture, and globalization (Nzelibe, 1996; Barza, 2…
Read
More
SNM660 Evidence Based Practice
Download :
0 | Pages :
8
Course Code: SNM660
University: The University Of Sheffield
MyAssignmentHelp.com is not sponsored or endorsed by this college or university
Country: United Kingdom
Answers:
Critical reflection on the objective, design, methodology and outcome of the research undertaken Assessment-I
Smoking and tobacco addiction is one of the few among the most basic general restorative issues, particularly to developed nations such as the UK. It has been represented that among all risk segments smoking is the fourth driving purpose behind infections and other several ailments like asthma, breathing and problems in the l…
Read
More
Tags:
Australia Maidstone Management Business management with marketing University of New South Wales Masters in Business Administration
BSBHRM513 Manage Workforce Planning
Download :
0 | Pages :
20
Course Code: BSBHRM513
University: Tafe NSW
MyAssignmentHelp.com is not sponsored or endorsed by this college or university
Country: Australia
Answer:
Task 1
1.0 Data on staff turnover and demographics
That includes the staffing information of JKL industries for the fiscal year of 2014-15, it can be said that the company is having problems related to employee turnover. For the role of Senior Manager in Sydney, the organization needs 4 managers; however, one manager is exiting. It will make one empty position which might hurt the decision making process. On the other hand, In Brisba…
Read
More
MKT2031 Issues In Small Business And Entrepreneurship
Download :
0 | Pages :
5
Course Code: MKT2031
University: University Of Northampton
MyAssignmentHelp.com is not sponsored or endorsed by this college or university
Country: United Kingdom
Answer:
Entrepreneurial ventures
Entrepreneurship is the capacity and willingness to develop, manage, and put in order operations of any business venture with an intention to make profits despite the risks that may be involved in such venture. Small and large businesses have a vital role to play in the overall performance of the economy. It is, therefore, necessary to consider the difference between entrepreneurial ventures, individual, and c…
Read
More
Tags:
Turkey Istanbul Management University of Employee Masters in Business Administration
MN506 System Management
Download :
0 | Pages :
7
Course Code: MN506
University: Melbourne Institute Of Technology
MyAssignmentHelp.com is not sponsored or endorsed by this college or university
Country: Australia
Answer:
Introduction
An operating system (OS) is defined as a system software that is installed in the systems for the management of the hardware along with the other software resources. Every computer system and mobile device requires an operating system for functioning and execution of operations. There is a great use of mobile devices such as tablets and Smartphones that has increased. One of the widely used and implemented operating syste…
Read
More
Tags:
Australia Cheltenham Computer Science Litigation and Dispute Management University of New South Wales Information Technology
Next