- The five important highlights that the Managing Director has mentioned in his report are as follows:
- 2. List and briefly describe all the events notes in both these Statements /Reports which are in compliance with the company’s policies on various matters
- B. Research and locate AASB Framework: Framework for the Preparation and Presentation of FinancialStatements
- C. Review and summarise reporting requirements as appearing in the Framework
A. Review the Managing Director’s Report (pages 5 – 35) and Corporate Governance Statement (pages 37-47);
1. Summarise in your own words (1000-1500 words)at least 5 major highlights that the Managing Director has mentioned in his report. Please note they need to be important considering the past or next years operations of the company 2. List and briefly describe all the events notes in both these Statements /Reports which are in compliance with the company’s policies on various matters B. Research and locate AASB Framework: Framework for the Preparation and Presentation of Financial Statements C. Review and summarise reporting requirements as appearing in the Framework (1000-1500 words)
Prepare your answer in a word-processed document, appropriately structured under headings and sub-heading to organise the information. You may attach the relevant pages of standards and legislations as annexures to your document.
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The five important highlights that the Managing Director has mentioned in his report are as follows:
2. List and briefly describe all the events notes in both these Statements /Reports which are in compliance with the company’s policies on various matters
2. According to the company’s foundation principles, the company aims to provide premium healthcare services to its customers("Focus On Accounting Standards", 1995). This is well justified by the company as it operates through extensive infrastructure capability which include many laboratories, primary care centres, radiology clinics, collection centre, etc. With high end services, it provides relief to 75 million patients in a year.
3. Another important principle of the company is the enhancement of the shareholders’ value of the company. The company enhances the earnings per share and return on capital invested every year with its successful business. Every year the company also make huge investments in order to boost its performance and remain attractive to shareholders("Adoption of International Accounting Standards", 2008). With the aim to create synergies in the other markets, it aims to improve the investment returns.
4. As the company has a policy to perform well for its stakeholders and shareholder, it has a rule under which the executive of the company do not get any portion of long term incentive unless the performance of the company lies at least at the median of the benchmark group.
5. The company works in accordance with its foundation principle of enhancing the value of the employees through meaningful employment opportunities(Zhang, 2007). The company works for overall development of the employees and also reward them for good work. The core value of the company is to provide job satisfaction and create an environment of work which leads to growth.
6. According to the foundation principles, the company should achieve operational excellence in its field. This operational excellence can be clearly seen in the gross profit margin and net profit margin. By continuously developing technologies to reduce its cost of services, the company has developed operational efficiency.
B. Research and locate AASB Framework: Framework for the Preparation and Presentation of FinancialStatements
2. According to the economic characteristics, all the items of the balance has been grouped. For example under the group current assets, it include items like cash, inventory and other assets which can be easily liquidated(An actuary's guide to compliance with statement of financial accounting standards no. 87, 1987). This is also in accordance with the requirements of the framework.
3. The sub-classification of the equity has been done appropriately into retained earnings, reserve and surplus, etc. All type of equity shareholders like common shareholders, preferred shareholders, redeemable shareholders, cumulative preference shareholders are reported under this head. This is also in accordance with the framework of AASB.
4. All the items which meets the definition of an asset, liability and equity has been rightly identified and reported in the balance sheet of the company(Kim &Im, 2017). This is accordance with the standard which requires correct classification and reporting of these items on balance sheet.
5. All the items which meets the definition of operating income and expenditures have been correctly identified and reported in the income statement in order to calculate the operating profit. This is also in accordance with the standard on presentation of income statement.
6. All the financial information related to the company which is required by the users to take important investment decisions has been provided by the company through, income statement, balance sheet, remuneration report, director’s report, auditor’s independence declaration, corporate governance statement, notes to financial statements, and consolidated cash flow statement. All these have been prepared and presented according to the requirements of Australian Accounting Standards Board.
C. Review and summarise reporting requirements as appearing in the Framework
1. As per the framework, the assets of a company is recorded at the historical cost and carried at the current costs(AMIR & ZIV, 1997). Similarly with the liabilities of the company which are recorded at the amout which was exchanges as proceeds but carried at its current obligation status.
2. Financial statement reporting is done with the objective to profit information to the users like analysts, investors, general public, media, etc. Hence its reporting must be simple and understandable in order to comply with the standards criteria.
3. The elements of Balance should be classified in Assets, Liabilities and Equity Capital. All the other items should be classified under these headings according the definition of each.
4. The elements of the income statement of the company should be classified under income and expenditure from operations(Romic, 2013). This method of reporting is to help users to simplify the process of evaluation.
5. Other reporting documents that is required are Management’s discussion and Analysis. This document helps in understanding the financial reports better as it gives an idea about the accounting policy which is followed("Fundamental of Financial Statement Analysis", 2007). Like for example the method of depreciation which is followed by the company is provided in this statement.
6. The Australian Accounting Standards require companies to report its financial statements at least end of every year and also quarterly if possible. This is to ensure that general public is aware of the financial status of the company.
7. All the items which satisfy the requirement of being characterised as an element should be reported in the balance sheet or the income statement according to its nature. This item should be depicted in words and in monetary amount and the accounting policies related to it should also be disclosed.
8. While reporting the financial statements, the materiality aspect of each item should be analysed and revalued if necessary before reporting.
9. The concept of probability is also taken into account while reporting these statements. When there is uncertainty of the future economic benefits, the aspect of probability rises. For example when it is anticipated that a receivable would be paid, it is recorded as accounts receivable in the asset side of the balance sheet(White, 1971).
10. Income is reported in the income statement and is calculated by taking into account the expenses and income from operations.
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