Analysis Company Accounting 2022

Running Head: COMPANY ACCOUNTING
Memorandum
To- Board of Directors
From-
CC-
Date- August 23, 2019
Subject- Introduction of Telstra and Consolidation Analysis
This memorandum is prepared with the aim of doing analysis of the company and the
analysis of the consolidation. This analysis will be of great help to assist the directors and
management of Telstra. Telstra Group is consist of Telstra Corporation Limited as well as it
entities that it controls at end of or during year end June 30, 2018. Telstra Corporation
Limited is the Australian telecommunications company that helps in building as well as
operating the telecommunications market voices and networks, internet access mobiles, pay
television as well as other products and services. It helps in providing the solutions of
telecommunications that includes network, data hosting, colocation, satellite services,
conferencing as well as cloud services (Müller 2014).
The financial report is comprised of the assets as well as liabilities of Telstra Company as
well as all its controlled entities at financial year-end as well as consolidated results and the
cash flow for year. The organization is known to be controlled entity in case when the
organization is being exposed to or having rights and to the variable return from the
involvement with company as well as having the ability for affecting those particular returns
by the power for directing the company’s activities (Hadi 2015). The effects of the intra-
group balances as well as transactions are eliminated in full from the consolidated financial
statements. The non-controlling interests in equity as well as results of the controlled entities

1COMPANY ACCOUNTING
are separately shown in the income statement, statements of the changes in equity, statements
of the financial position as well as statements of comprehensive income. Moreover, the
preparation of financial statements of controlled entities is done for the same period of
reporting as Telstra entity with the help of using the consistent policies of the accounting
(Seay 2014).
The company complies and is committed towards excellence in the corporate governance,
accountability as well as transparency. The company is also committed towards the long-term
performance as well as sustainability and it protects and enhances their shareholders as well
as stakeholders interests. Telstra complies with the corporate governance principles and
recommendations of ASX corporate governance council. However, in compliance with the
NZX Listing Rule of 5.1.7(d), the company notes that the corporate governance principles as
well as the recommendations of the ASX corporate governance council may differ materially
from the rules as well as principles of the corporate governance of NZX in corporate
governance bets practice code of NZX (Erel, Jang and Weisbach 2015).
The bigger picture of the sustainability report is provided separately in the company’s
website that provides the transparent overview of the performances and progress relating to
the strategy of sustainability over the year 2018. This report also provides the details of the
company undertake for supporting Sustainable Development of United Nations. The top most
sustainability practices by the company includes helping approx.1 million of the vulnerable
customers for staying connected, the score of sustainable engagement to the point of 74 in the
Survey of Employee Engagement and decrease of 24% in the emissions of greenhouse of gas
intensity from the financial year 2017 (Omar et al. 2014).
The commitment of the Audit committee is towards assisting Board of the company in the
integrity and reliability of the disclosures and reporting of finance, Group’s non-financial

2COMPANY ACCOUNTING
reporting and practices of disclosures practices. The members of audit and risk committee are
Nora L Scheinkestel, Margaret L Seale, Craig W Dunn and Russell A Higgins AO. The Audit
& Risk Committee provided the advice that during the financial year, the provisions of the
non-audit services are consistent with general standards of auditors’ independence that are
imposed. Moreover, the scope and nature of each non-audit types services provides does not
compromises on the requirements of the auditor independence of Act. Based on the advice
that is provided by committee of Audit & Risk, the directors of the company are very much
satisfied (Lee and Parker 2014).
The statement of the balance sheet of the company for the year-end 2018 shows that the
current asset is $7,077m and the current liabilities is $19,040m. Hence, the current ratio is
0.37. It means that the solvency position of the company is not good because Telstra is
having more current liabilities than its current assets (Gardini and Grossi 2014).
The impairment assessment of Telstra compares the CGU’s value of carrying with the
determined carrying value by using the calculation of ‘value to use’. The key assumptions
used in the calculations of value to use include discount rates, forecasts of cash flows as well
as terminal growth rates (Johansson, Hjelström and Hellman 2016).
The company has the overall impairment loss of $327 million that relates to the goodwill as
well as the other non-current assets from which amount of $273 million are related to the
Ooyala Holdings Group and it was recognized in category of ‘All Other’. The recognition of
the impairment losses is done in Income statements of the company’s period of reporting
when asset’s carrying amount exceeds from the amount of recoverable (Telstra.com.au.
2019). Hence, $243m charges of impairment was recognized in income statement in the other
expenses and recorded in the category of “All Other”. The remaining goodwill as well as
other non-current assets was writing down to zero. Moreover, in the assessment of the