Activity-Based Budgeting: A Case Study of Amcor

Running head: MANAGERIAL ACCOUNTING
Managerial Accounting
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction..........................................................................................................................2
Description of Amcor..........................................................................................................2
Description of ABB along with its features.........................................................................4
Comparison of ABB with traditional budgeting systems....................................................6
Suitability of ABB in Amcor...............................................................................................8
Conclusion.........................................................................................................................10
References..........................................................................................................................12

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Introduction
A budget is identified as any financial expression for a given set of activities. The focus
of traditional budgeting is identified with resource planning in an organizational unit. Moreover,
the process of budget aims at elimination of wasteful activities and reduction in overall cost
(Mahal and Hossain 2015). Based on the given scenario the assignment is related to evaluation of
the budgeting system. The selected firm for the purpose of implementation of activity-based
budgeting (ABB) has been identified with Amcor which is listed on the ASX. The first section of
the study has described the activities of the chosen company. In the second section the important
features and descriptions of ABB have been duly stated. This section of the report is followed by
some of the other important discourse which highlights how ABB is varying from the traditional
budgeting systems. In the latter part of the study has discussed on the suitability of ABB with the
requirement of firm.
Description of Amcor
Amcor Ltd is considered as one of the pioneers in providing packaging services across
the globe. The main development initiatives facilitated by the company identified with the
specialty cartoons, flexible packaging system, beverage, pharmaceutical and personal care
products. Furthermore, Amcor is listed under ASX with its headquarters situated in Southbank,
Victoria, Australia. In June 2017, the company was depicted to employ more than 30,000
workforces for generating a sale of USD $ 9 Billion based on the operations in more than 40
countries. By referring to its global status, the companies included under several international
indices of markets which includes MSCI Global Sustainability Index, Dow Jones Sustainability
Index and FTSE4Good Index Series. The two main important segments of the company need to
be further considered with the flexible packaging services and rigid plastics. The structure for

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flexible packaging is identified with the development of supplies which are flexible as per the
and fracturing of folding cartons. The four main business units of the company for services
associated to flexible packaging is depicted in Europe, Middle East and Africa. In addition to
this, the service is also available across Asia-Pacific region (Assets.ctfassets.net. 2018).
The rigid plastic services are mainly based across four business units situated in North
America Beverages; North America Specialty Containers; Latin America; and Bericap Closures.
As per the information provided in the annual report of the company on the basis of preparation
of the financial statement is followed with Corporations Act 2001 and the guidelines provided by
AASB. Furthermore, the various types of standards included by the company is directly relevant
with the IFRS as prescribed by IASB. Moreover, the financial position measurement by the
company is followed by several techniques such as evaluating the availability-for-sale financial
assets. The company is also included the methodologies of derivative financial instruments and
non-derivative financial instrument which has considered the liabilities pertaining cash settled
share-based payment arrangement (Amcor.com 2018).
In addition to this, the implementation of AASB 9 for the measurement and classification
of financial assets are based on cash flow characteristics and business model which are needed
by the management for assessment of financial instruments. Starting on 1 July 2018, Amcor
introduced credit loss model in which the losses should be recognized at the time of expected
earnings. The third important criteria are also the discerned with hedge accounting model which
offers greater civility for training to alignment of risk management practices. In 2018, a certain
portion of the financial assets of Amcor was also sold through fair value consideration with the
help of OCI. However, it needs to be noted that the majority of the group’s financial assets they
either held for collecting contractual cash flows or the amortized cash amount. This is directly
relevant to the shareholder value creation model and return of any surplus cash to the