Financial Reporting Disclosure in Australian Corporate SectorIntroductionIn the corporate sectors and other small businesses, financial reports are the documentary records they consolidate to track and assess how much money in terms of profit or loss the operations of the business is making. The intention of financial reporting is to convey this information to the investors and the stakeholders of the business. Hence, financial reporting is a part of essential contract between the business and the external investors since they have the right to know if their monetary investment is being spent astutely and at a remarkable return (Deegan, 2010, p.
574). The purpose of this paper is to come up with a report on two selected Australian corporate groups. The report involves analyzing the annual reports of the specified corporate groups based on pertinent management and accounting aspects. The two corporate groups under analysis are Firefax Media limited and Mirvac Group. The subsidiaries of Mirvac group include Mirvac limited, Mirvac property trust. The primary ongoing operations of Mirvac involves of real estate ventures, development, hotel business and investment management (Mirvac Group Annual Report 2011, p.
1). All these are under two divisions namely the Investment and Development divisions. Fairfax on the other hand is the Australia’s giant in the media industry. The group deals with the printing of news, information, promoting sales in dailies, magazines and online hubs, and radio dissemination (Fairfax Media Annual report, 2010, p. 15). Among the subsidiaries of Fairfax are; Independent Newspapers Limited, Fairfax Digital, Australian Radio and many others. Goodwill MethodsThe goodwill method employed by both firms is that of business combination. Here proceedings or transactions in which two or more entities or subsidiaries of a corporate group are brought under general control as a sole accounting entity (Deegan, 2010, p.
577). The acquirement system of accounting is utilized by both firms to explain for all business amalgamation, irrespective of whether equity resources or other assets are attained. The deliberation relocated for the acquirement of a controlled subsidiary encompasses the fair values of the relocated assets, incurred liabilities and the equity interests offered (Marvic 2011, p. 40 and Fairfax Media, 2010, p. 46). For both Fairfax media and Mirvac, goodwill corresponds to the surplus of cost of an acquirement above the reasonable price of the Groups’ share of the ultimate recognizable assets of the purchased subsidiary at the time of acquirement.
Therefore, both corporate groups incorporate goodwill on acquirements of entities in indefinable assets. For goodwill related to associates, it is integrated in investments in associates. Goodwill is spread to a reportable division for the intentions of impairment experimentation. For instance impairment of investment in associate $ (1, 060) million for Fairfax media while for Marvic the amount is $ 69.4 million (Marvic 2011, p. 72 and Fairfax Media, 2010, p.
71). Fairfax did not have any meaningful investment in associates or acquisitions for the fiscal year as it recorded a zero figure in the consolidated financial statement. Marvic on its part recorded some meaningful acquisition for the said fiscal year; it managed to close the year with a $ 2.1 million investment in intangible assets. Therefore, goodwill is not paid off but rather it is examined for harm every twelve months. This examination may also be done more recurrently if variations in situations point to possibility of impairment, and is this is undertaken at cost minus accrued damage losses (Marvic 2011, p. 40 and Fairfax Media, 2010, p.