Financial Reporting Disclosures in Australian Corporate Sector - Case Study Example

Running Head: FINANCIAL REPORTING DISCLOSURES IN AUSTRALAIN COMPANIES: Financial Reporting (Author’s name) (Institutional Affiliation) 1. CONDOTO PLATINUM: Their general purpose interim financial statements reporting for the period ended 31 Dec 2011 have been primed according to the necessities of the Australian Accounting Standard AASB 134: and Corporations Act 2001. The reporting of Financial Statement conformity with the AASB 134 guarantees that the financial notes and statements also conform to the International Financial Reporting Standards. The financial report is projected to offer the users an up to date on the most recent yearly fiscal statements of Condoto Platinum and its managed entity which is “the Group” or the “Consolidated Group”. On that note, it doesn’t contain materials that characterize comparatively inconsequential changes happening in course of the half-year in the Group. Thus, it is suggested that the fiscal report be read in combination with the yearly fiscal report for the year ended 30 December 2011, alongside any other public pronouncements done by Condoto Platinum in the course half year in conformity with constant disclosure rations originating from the Corporations Act 2001. The provisional fiscal statements have been done in conformity with the accounting practices and policies implemented by the Group’s previous annual fiscal report for the year ended June 30 2011, not including the adoption of developments of (2010 Improvements) AASBs 2010 as at Jan 1 2011. The AASBs 2010 made a number of trivial improvements to AASBs. The significant improvements and their impacts on the prior or current periods are illustrated herein. Similar accounting methods and policies of computation were observed on this provisional fiscal report as were used in the very latest annual fiscal statements apart from the items described below. Improvements to AASB 101 production of Fiscal Statements The improvement offers an alternative in producing the reconciliation of every piece of other comprehensive revenue; this can be either done in the statements of alterations in equity or in the form of notes of the fiscal reports. The group “consolidated” has chosen to maintain reconciliation in the consolidated report in equity as disclosed previously (Heisinger, 2009). Improvement to AASB 134 Fiscal Interim Reporting: The improvements made clear particular disclosures relating to transactions and events which are important to the appreciation of the alterations in the group’s consolidated situations since the previous annual fiscal statements. The groups’ consolidated fiscal interim statements as at December 31, 2011 indicate that these improved requirements of disclosure, where appropriate. a) Accounting Policy Change: The Corporation has altered the accounting policy connected to the evaluation of Non Controlling Interest (NCI), financial year ended December 31, 2011. Consequently, the Group has with the benefit of hindsight altered the comparatives for the fiscal year ended June 30, 2011. The Non Controlling Interests were formerly identified by the Group by way of applying for the partial goodwill method. The Corporation has selected to apply the full goodwill method as the Corporation trusts that this far much better reflects the just value of the purchased matters linked to the acquisition of Condoto. That alteration has been adopted as the management is of the view that the full goodwill method offers a more precise worth of the interest for the non controlling units. Issued Capital: Ordinary Shares Movement: 31 Dec, 2011 31 Dec. 2010 $ $ Number Number BAL, at the start of reporting: 39,700,004 6,300,002 Issued shares during the year August 31, 2010 - 17,500,000 December 14, 2011 6,000,000 BAL, at the end of reporting: 45,700,004 23,800,002. Partially paid shared were issued to the Company promoters. Every partially paid share is at the value of $0.02 whereby 0.01 of it is cleared on issue and the remaining part of the issue is to be paid at the determination of the holder at any given time in the five-years of issue. The shares that are partially paid allow through a pro-rata platform the holder to take part in election at during the general meetings and also be able to take part in dividends. The Non Controlling Interest Acquisition: By Dec, 2011, the Corporation acquired the balance 25 per cent interest of ordinary shares in Condoto Platinum at the price of $1,800,000, improving its ownership from 75 per cent to 100 per cent. The corporation acknowledged a decline in the NCI of $1,653,415 and an improvement in the accumulated losses amounting to $128,030. 2. Endeavour International Limited: The consolidate fiscal statement for Endeavour International LTD, for the financial year ended December 31, 2010 was certified for issue in conformity with the Director’s resolution on February 25 2011. The Endeavour International Ltd. which the (Parent Company) is an organization that is limited by shares. The company shares are publicly transacted in the ASE (Australian Stock Exchange). The S.J Limited is the absolute of Endeavour Group and it commands 52.85 per cent of its ordinary shares. The nature of principal activities and operations of the Group are illustrated in the report of the Directors. The consolidated fiscal statement include the fiscal statements of the Group, special entity purposes and their subsidiaries as at the end of the financial period ended Dec 31 2011. The interests in acquaintances are not component of the consolidated group but are equity accounted. The subsidiaries remain all such entities through which the Group has the authority to manage the operating and financial policies in order to get benefits from their operations. The effect and existence of likely voting privileges that are presently convertible or exercisable were taken into account while evaluating whether the Corporation governs another entity. The entities of special purpose are such entities through which the Cooperation does not have ownership interest though in effect the platform of the relationship is in a way that the Group governs that entity in order to acquire a lot of benefits from its activities. The fiscal statements for the auxiliaries were done at the same time the parent group was doing theirs, in accordance to the accounting practices. In working out the consolidated fiscal reports, all the transactions, inter-company balances, un-recognized gains and losses incurred from dividends and intra-group have been done away with completely. The special purposes entities and subsidiaries are entirely consolidated from the time in which the control was acquired by the Corporation and stopped to be consolidated at the time at which the control is reassigned to the Corporation. Reserves in subsidiaries held by the Group are considered at cost in the different fiscal report of the mother entity less any impairment charges. The received dividends from the entities were considered as part of other incomes in the different revenue statements of the mother entity, and are not affecting the recorded cost of the business. On receiving the dividend payments from the entities, the mother evaluated whether any parameters of impairment of containing value of the business in the entity exist, to the level whereby the carrying value of the business surpasses its recoverable sum, an impairment loss is to be acknowledged. The subsidiaries’ acquisition was accounted for by the application of the acquisition system of accounting. The accounting method of acquisition comprises acknowledgement at date of acquisition, differently from goodwill, the liabilities assumed, the acquired indentified assets, and if any acquired non controlling interest. The assumed liabilities and identifiable assets were measured at the date of acquisition fair values. According to Heisinger (2009), the fair value (comprising the fair value of any earlier existing business) and discrepancy in the above constructs was the good will in the acquisition. After the first acknowledgment, goodwill was worked out at a cost less any impairment accumulated losses. For the function of the impairment measurement, the acquired goodwill in investment combination was, from the date of acquisition, awarded to every Corporation’s income-generating entities that were projected to benefit from the acquisition, regardless of whether some liabilities of assets acquired were allocated to those entities. . Where the goodwill makes the component of income generating entity and component of the operation in that entity disposal, the goodwill linked with the operation disposed was integrated in the carrying sum of the operation when measuring the loss or gain on the operation disposal. In this case, the disposed of goodwill was determined based on the comparative values of the disposed of operations of the income generating entity retained. The NCI were awarded their share of the after tax net profit in the report of the comprehensive revenue and were reflected in the equity within the consolidated report of fiscal position, differently from the parent equity owners. Losses were directed to the NCI even if the regardless of the position of the deficit balance. An alteration in the interest ownership of an entity doesn’t end up in the loss of control, was considered to be an equity transaction. References: Condoto Platinum Interim Financial Report Annual Report and Accounts 2010/11, retrieved from, www.dixonsretail.com Endeavor International plc, Annual Report and Accounts 2010/11, retrieved from, www.dixonsretail.com Heisinger, K. (2009), Essentials of Managerial Accounting .California: South-Western College Publishers. Read More