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Financial Accounting (ACC701)

   

Added on  2021-06-14

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King’s Own InstituteIndividualAssignment-IFinancial Accounting (ACC701)Submitted by- Suraj Raj Joshi Student number- 11701361Submitted to- Patricia VakafuaDate- 15th May, 2018

ACCOUNTING1Table of ContentsIntroduction:...............................................................................................................................2Introduction of the enterprises:..................................................................................................3Reasons for Liquidation:............................................................................................................4Ethics and Corporate Governance:.............................................................................................6Role of Liabilities:......................................................................................................................8Conclusion:................................................................................................................................9Reference..................................................................................................................................11

ACCOUNTING2Introduction:Liquidation is referred to as a process of inventory selling of an enterprise at a hugediscount for the making of cash. The rights and liabilities are actualised in the course of thestage of liquidation and the creditors’ claims are fulfilled either partially or fully. It isimportant to point out that distinct causes are inherent for contributing in the directions of theliquidation of the business enterprise (Dhamija 2015). The chief reasons involves of theexecution of aggressive framework and rules for accounting, crooked practices, corporategovernance loopholes and others. The present report lays emphasis on the various key issuesthat led to the downfall of the three significant companies of Australia, namely, HIHinsurance, One Tel and ABC Learning.Introduction of the enterprises:ABC Learning:The enterprise of ABC Learning used to be one among the leading institutes inAustralia that used to function in the sector of education in Australia. This enterprise waslisted in ASX (Australian Securities Exchange) that had a market capitalisation of about $ 2.5Billion. On the other hand, the mortgage crisis had a direct influence on the enterprise, as thishad procured a huge sum of debt that is coupled with the shift in the direction of managerialreceivership (Penman 2016). The enterprise was set up in Queensland, Australia in 1988 andthis had more than 900 centres across the country. The enterprise was diversified itsoperations in the business in US and UK by procuring the Busy Bees Group for an amount of$ 330 Million in 2006.

ACCOUNTING3HIH Insurance:HIH Insurance is also known popularly as one of the biggest enterprise in the field ofinsurance. Since the year of 1997, the enterprise had procured different enterprises inAustralia as well as in other countries. Because of the progress of the enterprise in rapidmanner had made the enterprise to get the listing in 1992 on ASX. Additionally, in 1995, theenterprise had made a clear decision of selling its holdings to a company of Swiss origin.This led to the change of the name of the company too (Clor-Proell et al. 2015). At the timeof the liquidation of HIH Insurance, it had incurred a loss that amounted to $5.3 billion.Many of the Board members of the company were found guilty for contravention of theviolations of the law and consequently were sent to jail too. For the specific reasons, thecollapse of the insurance company is still known as the largest collapse of an enterprise inAustralia’s corporate world. One Tel:One Tel is one among the most popular telecommunication enterprise that was set upin Australia on 1995. The key focus of the enterprise was to give good quality service andproducts to its valued customers in a manner to satisfy all the needs and wants by fulfillingthe customer’s desires and requirements (Razak and Stainbank 2018). Additionally, beforethis got liquidated it was ranked as fourth largest firm in telecommunication functioning inAustralia. The motive of the enterprise was to enhance a youth centred image by selling themobile and the various related telecommunication services within the country. Reasons for Liquidation:There are certain significant occurrences that may eventually leads to a downfall ofthe companiesabove stated enterprises that are discussed briefly as below:

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