Financial Reporting Disclosures
Report Writing on Financial Reporting Disclosures in Australian Corporate Sectorannual report (year-end between 2013-2014 periods) for two Australian parent companies (attached financial statements).
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Get Help Now!The company web-sites can be obtained from the web-site of the Australian Stock Exchange at http://www.asx.com.au/research/company-research.htm or any other online resources.
Identify their ‘consolidated financial statements’ reported in the annual reports.
Critically discuss, analysis and evaluate whether the financial reporting and disclosure followed by each parent companies are consistent with the requirements of the AASB 3 and AASB 10 for the users of general purpose financial reports.
In your essay, identify the strengths and weaknesses of their reporting and disclosure from the users’ perspective, as well as, major differences along with your recommendations to advise how to minimise reporting and disclosure gaps between them.
Attach a scanned copy of the ‘consolidated financial statements’ only, no need to attach ‘Notes’. Do not attach the entire annual report. NOTE: presentation and referencing are important.
Compliance with the AASB 3 and AASB 10
The preparation and presentation of the group’s financial statements consistently comply with the AASB principles. This ensures that users of the financial reports can make informed decision because they have reliable reports. The statements were also prepared in compliance with the IFRS provided by the IASB where applicable.
To comply with the AASB 3 and AASB 10 on business combination and consolidation, the group incorporated assets and liabilities of its associates, joint ventures and subsidiaries. The consolidated reports for the period ended June 30th, 1014 are critical to decision makers because all potential risks have been disclosed and additional information provided to the notes of the financial statements (Dagwell et al., 2013).
The group further impaired investments worth $392.5 million. The practice of impairment is well represented in the notes to the financial statements because they are considered material and can have an impact on user’s decision. The amount related to regional free was noted to be $375.7 million. Excess digital spectrum on associate was allocated $4.7 million that have been advocated by the AASB 10. It is also a requirement by the AASB 3 for parent groups to recognize onerous contracts. The group complied with the AASB 10 by recognizing onerous contract related to DAB+. The contract was recorded at $8.1 million.
Strengths and Weaknesses
The acquisition approach used by the group is recognized to account for subsidiary purchase. The presentation includes all acquisitions made during the accounting period immediately from the date of control (CCH Editor & CCH Australia Limited 2014). The process has been made clear in the statement of Comprehensive Income. All intercompany transactions have been eliminated to ensure that company transactions are not accounted twice. Balance that represents unrealized gains on intercompany transactions has been suspended…………………..
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