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Requirement
1- Write a report on cooperating accounting in 2000 words with reference to APA.-
Solution
Question 1
The matter that is represented by this question is in accordance to the information that the accounting statements in a single corporate entity that is prepared by the accountant in an organization when the financial year ends is reflected the operations inside the business entity that is carried out by it all throughout the financial year. The significance of an accounting statement lies in the fact that the financial performance as well as the liquidity position of a corporate entity is known by the scrutiny and the analyzing of the financial statements of the corporate entities. Moreover, it should be noted here that the accounting statements of a corporate entity are primarily utilized by the users for an objective in taking a potential economic decision. In a particular enterprise in the corporate world that is selected for the objective of the research is JB Hi-Fi Ltd. An annual report of a corporate entity that has been utilized belongs to the financial year of 2017.
Answer to Part a
The matter that is being given in a question is about the cash flow statement in a specific enterprise that is been instructed as per the given question. A particular cash flow statement that has been prepared reveals the fact that thenet cash inflow’s reconciliation iscoming from the operating activities that is transferred to the profit has been computed in the published accounting statement. Furthermore, the financial components that have been included in the accounting statement are the financial particulars like depreciation and amortization, impairment of goodwill and other related financial components that has effectively resulted in the inflow or outflow of cash from the business operations throughout the financial year.
A particular requirement in regards to the liquidity position of the corporate entity has revealed the fact that the company has been enjoying a substantial liquidity position. This means that the company has enoughability to compensate the debts or current liabilities with an aid of the current assets. This net cash inflow is coming from an operating activities has been of the amount of $190.6 million. However, it should be noted here that the liquidity position of the corporate entity has not been the same for the financial year of 2016. This means that the liquidity position of the company has improved from $185.1 million in the financial year of 2016 to $190.6 million for the financial year of 2017 (Barth 2013).
Answer to Part b
This is given in an annual report of the enterprise that an interim dividend is given for a percentage of 63.0 cents per share and as a final dividend is given for a percentage of37.0 cents per share both this are franked toa percentage of 100% at the 30% corporate rate of income tax had been compensated to the shareholders of the fully paid ordinary shares as per the quarterly basis. The dividend that has been recognized for the financial year of 2017 has been the final dividend given as per 2016 that is the previous financial year and interim dividends for the current financial year of 2016. The unrecognized dividend that has been included in the financial year of 2017 is the final dividend that has been of the amount of $52.6 million.
The unrecognized dividend that is composed in an annual reports in a corporate enterprisereveal about a fact that a particular dividend amount has not still been recognized or still has not been paid to the shareholders of the company. Therefore, this financial component still remains unrecognized (Barth 2013).
Answer to Part c
The information that has been conveyed through the director’s declaration are essentially the assertions that have been made by the directors of the corporate entity. It has been mentioned in the declaration of the director that a business might be capable to compensate the debts at the time as soon as these turns out to be due. A given statement that states about finances that is composed in preparation with accordance to the IFRS(International Financial Reporting Standards). Furthermore, it has been declared by the directors that the accounting statements and the notes to the accounting disclosures that is composed within the financial report of the corporate enterprise states about a fact that they are prepared as per to the Corporations Act 2001. The directors have also included an announcement that are needed by Section 295 of the Corporations Act 2001 (Barth 2013).
Answer to Part d
The component of other comprehensive income refers to the income that has been gained on the basis of the different valuations of the assets. Moreover, the particular gains incurred from foreign exchange have also been included under this particular financial component (Chand, Patel and White 2015).
The items that have been included under Other Comprehensive Income are as follows:
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Modifications in the fair value of cash flow hedges (net of tax)
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Differences in exchanges or translation of the operations in the foreign
Answer to Part e
The different types of reserves that have been included in the financial report of the enterprise are as follows:
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Equity settled benefits reserve
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Foreign currency translation reserve
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Hedging reserve
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Common control reserve
The different types of reserves that is given in the financial report of an enterprise is identified from the Statement of Changes in Equity that has been prepared by the company for the year ending on 30th June 2017.
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Answer to Part f
The financial items that have been included in a financial report of the enterprise for the financial year of 2017 are as follows:
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Audit and other services
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Audit and review of the financial statements of the group
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Audit and review of the financial statements of the subsidiary
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Audit of accounting for the acquisition of the Good Guys
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Other Services
Answer to Part g
The non-audit services that have been included in the financial statements of the corporate entity. The fees for the providence of the services had been computed as $35.200 for the financial year of 2017. It has been further mentioned in the annual report of the corporate entity that the directors of the company have been satisfied with the work.The financial information that has been disclosed in the particular accounting disclosure of the annual report states the fact that all the non-audit services have been reviewed and approved for the purpose of the fact that they provide no impact on the integrity and the objectivity of the auditor. Furthermore, it has been mentioned in the accounting report of the organization that the non-audit services that have been provided refers to the services that have not undermined the principles as mentioned in the Code of Conduct for Professional Accountants as mentioned in APES 110 and issued by the Australian Professional & Ethical Standards Board.
The fees that have been charged by the Audit and Risk Management Committee Chairman has been of the amount $32,000. This means that the non-audit services fees has been more or less of the similar amount in regards to the audit fees. Therefore, a particular fact that has been coming up from the situation is that the non-audit fees that is charged, is more than estimated. This should not be the case as because the audit services are more important than the non-audit services that are provided to a particular corporate entity.
Answer to Part h
The issue that has been presented in the question is that the particular fact as to how the expenses have been disclosed in the annual report of the corporate entity that is whether the expenses have been disclosed by nature or by function. The expenses that has been included in the income statement of the corporate entity reveals the fact that the expenses have been disclosed on the basis of Function. The statement of profit and loss or the income statement disclose the expenses as per their functions. For instance, the cost of sales, the sales and the marketing expenses and other related expenses like the finance costs have been disclosed on the basis of the functions that they carry out. It must be noted here that all the business entities or the big corporate firms make use of this particular method for the purpose of preparing the income statement of the corporate entity. This is because this particular method enables the calculation of the gross profit and net profit that is incurred by the corporate entity in the income statement itself. However, the income statement that has been prepared on the basis of nature is used by a limited number of corporate entities and results in the preparation of the income statement that does not facilitate the computation of the gross profit of the corporate entity (Chand, Patel and White 2015).
Answer to i
The deferred tax liability that has been mentioned in the annual report of the corporate entity reveals an amount of $26.8 million for the financial year of 2017. The deferred tax liability signifies the amount that arises on the basis of the taxable temporary difference except the fact when the component of deferred tax liability has been recognized in regards to the initial recognition of a particular asset or liability that has been incurred excluding business combinations. Moreover, the carrying amount of this particular financial component is reviewed at the end of the each reporting date and is reduced to the extent that there is no more guarantee of the fact whether sufficient amount of taxable profit is available for the purpose of ascertaining the fact whether the deferred tax asset will be properly utilized or not. Deferred tax for the items in regards to a particular transaction are recognized either in other comprehensive income or directly in the accounting statement of equity(Chand, Patel and White 2015).
Answer to j
The income tax expense that has been revealed in the income statement of the corporate entity reveals an amount of $76.3 million. Moreover, the income tax charge for the particular corporate entity has been of the amount of $98.5 million. This means there is a potential difference between the two financial components. The difference is due to the fact that there have been adjustments in regards to the reversing and the originating differences and the tax adjustment in the current year (Crawford and Power 2015).
Answer to k
If the tax rate is changed to 32% then the adjustments that would have been need to be made refers to the fact that the income tax charge and the financial component of income tax expenses would change. This reveals the fact that the income tax expense would be adjusted which would result in an adjustment of the income statement that has been prepared by the corporate entity for the particular financial year (Crawford and Power 2015).
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The assignment has been completed with utmost sincerity and effort. While preparing this particular report the things that I have learned are as follows:
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The annual financial report contains the essential information that has been utilized by the users of the accounting statements for the purpose of taking the economic decisions. Moreover, the investors and the other stakeholders of business utilize the financial statements of the corporate entities.
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Moreover, the annual financial report of a corporate entity reveals the financial and the liquidity position of the corporate entity. The annual financial report contains the essential accounting statements like the statement of financial position, the balance sheet, the cash flow statement and the statement of changes in equity. These are the important accounting statements that can be utilized for the purpose of carrying out the effective business decisions.
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The analyzing of the financial report is another technique that I have learnt from this particular study.
References
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Barth, M.E., 2013. Measurement in financial reporting: The need for concepts. Accounting Horizons, 28(2), pp.331-352.
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Barth, M.E., 2015. Financial accounting research, practice, and financial accountability. prAbacus, 51(4), pp.499-510.
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Chand, P., Patel, A. and White, M., 2015. Adopting international financial reporting standards for small and medium?sized enterprises. Australian Accounting Review, 25(2), pp.139-154.
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Crawford, L. and Power, D.M., 2015. Perceptions of external auditors, preparers and users of financial statements about the adoption of IFRS 8. Journal of Applied Accounting Research, 16(1), pp.2-27.
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Henderson, S., Peirson, G., Herbohn, K. and Howieson, B., 2015. Issues in financial accounting. Pearson Higher Education AU.
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Mardini, G.H., Crawford, L. and Power, D.M., 2015. Perceptions of external auditors, preparers and users of financial statements about the adoption of IFRS 8: Evidence from Jordan. Journal of Applied Accounting Research, 16(1), pp.2-27.
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Newberry, S., 2015. Public sector accounting: shifting concepts of accountability. Public Money & Management, 35(5), pp.371-376.
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