Assignment on Corporate Accounting- Surfstitch Ltd

Added on - 18 Feb 2020

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Running head: CORPORATE ACCOUNTINGCorporate AccountingName of the Student:Name of the University:Author’s Note:
CORPORATE ACCOUNTING1AbstractRelevant financial position of Surfstitch Ltd Is mainly evaluated, where relevant condition in2015 and 2016 could be identify. The assignment directly focuses in pinpointing the currentfinancial position of Surfstitch Ltd, which could allow the investors to identify relevantinvestment opportunity. There is a relevant points mentioned in the article, the research paper,and ASX disclosure measures mainly state that Adequate measures need to be maintained byAustralian authorities, as it is essential for monitoring operations of the organisation.Hence, theuse of continuous disclosure measure could be implemented with certain restrictions on unethicalnews display. The article 3A could be developed more for the 4 reducing any kind of unethicalmeasures used by companies as portrayed by David Jones in the news article.Thus, it could beidentified that use of continuous disclosure measure would eventually help investors reduce therisk from investments.
CORPORATE ACCOUNTING2Table of ContentsPart I:...............................................................................................................................................31. Mentioning the financialpredicament that is faced by Surfstitch Ltd:.......................................32. Mentioning about the 2015goodwill, investment in subsidiary and cash position.....................33. Mentioning about the 2016impairment costs, selling & distribution and administrativeexpenses in the profit and loss statement:........................................................................................34. Providing relevant recommendations whether to buy, hold or sellSurfstitch Ltd shares andwhy:.................................................................................................................................................4Part II:..............................................................................................................................................5Mentioning about: Why is it necessary to have a continuous reporting regime for disclosureentities and is it effective?................................................................................................................5References and Bibliography:........................................................................................................10
CORPORATE ACCOUNTING3Part I:1. Mentioning the financialpredicament that is faced by Surfstitch Ltd:The predicament is mainly identified from the annual report of Surfstitch Ltd, which isdirectly reflects overall decline in operational capability of the company after the exit of JustinCameron in 2015. In addition, management of Surfstitch Ltd was not able to control theincreasing expenses, which is directly affecting financial stability of the organisation. Moreover,the organisation has high-end administrative costs and selling & distribution costs, which isdirectly increasing in nature and hampering the overall net profit. The rising expenses of thecompany have mainly declined its ability to generate the required profit, which could support itsfinancial activities in near future. This mainly increased predicament in the overall financialstability of the organisation (Market Index 2017).2. Mentioning about the 2015goodwill, investment in subsidiary and cash positionThe evaluation of the annual report of Surfstitch Ltd for 2015 mainly portrayed goodwillof$73,832,000. In addition, the investment in subsidiary was mainly identified at $70,197,000and the cash & cash equivalent position ofSurfstitch Ltd was detected at$40,837,000 (MarketIndex 2017).3. Mentioning about the 2016impairment costs, selling & distribution and administrativeexpenses in the profit and loss statement:In 2015, the impairment cost was not used in the annual report, whereas in 2016 theimpairment cost increased to$88,999,000, as portrayed in the annual report. Moreover, the
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