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Company and Financial Reporting of ANZ Bank | Report

   

Added on  2020-03-16

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Running head: COMPANY AND FINANCIAL REPORTINGCompany and Financial ReportingName of the Student:Name of the University:Author’s Note:Course ID:

1COMPANY AND FINANCIAL REPORTINGExecutive Summary:The current report aims to evaluate the compliance of ANZ Bank with the relevantaccounting standards prevalent in Australia. In order to report the Bank Bill Swap Rate, ANZBank needs to provide a brief description of the nature of the contingent liability, inaccordance with AASB 137 Paragraph 86, which is what it has done. In addition, it hasinformed interested parties that the financial impact is uncertain and has therefore notprovided an estimate of the financial effect as required in Paragraph 86, where practicable.For recording the fine payments, the contingent liability would no longer appear in thefinancial statements at the end of the period because it would have already been paid.In addition, ANZ Bank could depict all business and commercial loans in the form ofborrowings in the liability side of the balance sheet statement. The reasons for providing andobtaining the business and commercial loans need to be disclosed in its annual report. Finally,it has been found that based on the amount of capital lost, the loan portfolio might have to beshrinking on the part of ANZ Bank or it needs to sell new bank shares to stay in conformanceto the rules of capital adequacy.

2COMPANY AND FINANCIAL REPORTINGTable of ContentsPart 1:.........................................................................................................................................3Answer to Question 1.a:.........................................................................................................3Part II:.........................................................................................................................................4Answer to Question 2.a:.........................................................................................................4Answer to Question 2.b:.........................................................................................................5Part III:.......................................................................................................................................6Answer to Question 3.a:.........................................................................................................6Answer to Question 3.b:.........................................................................................................7Answer to Question 3.c:.........................................................................................................8Answer to Question 3.d:.........................................................................................................8References:...............................................................................................................................10Appendix:.................................................................................................................................12

3COMPANY AND FINANCIAL REPORTINGPart 1:Answer to Question 1.a:As ASIC only commenced legal proceedings in the Federal Court on 4 March 2016,at the reporting date of 30 September 2016, these proceedings are in the early stages and noreliable estimate can be made as to the amount of obligation, or whether there will be anobligation. Therefore, in accordance with 1AASB 137 Paragraph 14, no current provisionneeds to be made for the possibility of a contingent liability resulting from the litigation byASIC.However, AASB 137 Paragraph 16 outlines that whether or not it is likely that apresent obligation exists, an entity shall disclose a contingent liability, unless the possibilityof an outflow is remote. It would therefore be more likely that the ANZ should disclose thecontingent liability, as there is probably a more than remote possibility that there will be anoutflow of resources embodying economic benefits, in the future, as a result of the courtproceedings by ASIC. It would be advisable to disclose now to avoid the chance of non-compliance.Below is the Note to the Financial Statements which ANZ included in its 2015-2016Financial Statements in respect to these allegations. Notes to the Financial StatementsOther Contingent Liabilities and Contingent Assetsii) Proceedings in relation to Bank Bill Swap Rate (BBSW)On 4 March 2016, ASIC commenced court proceedings against ANZ. ASIC isseeking declarations and civil penalties for alleged market manipulation, unconscionableconduct, misleading or deceptive conduct, and alleged breaches by ANZ of certain statutoryobligations as a financial services licensee. ASIC has subsequently initiated similar

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