Corporate Accounting: Financial Statements of ASX Listed Firms

Running head: CORPORATE ACCOUNTING
Corporate Accounting
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1CORPORATE ACCOUNTING
Executive Summary:
The current report has emphasised on evaluating the different financial statements of three ASX
listed firms operating in the same sector. The firms selected for this paper comprise of the A2
Milk Company Limited, the Food Group Revolution Limited and Webster Limited. It is evident
that these organisations have made huge investments in PPE and other intangible assets.
However, the inflows are adequate to offset such outflows. Furthermore, these organisations do
not take into account extraordinary items from the other comprehensive income statement, as
they are not linked directly with the daily business activities. Finally, from the taxation portion, it
has been analysed that the three organisations are considering deferred tax assets, income tax
provision, deferred tax liabilities and finance costs for computing the cash tax rate appropriately.

2CORPORATE ACCOUNTING
Table of Contents
Introduction:....................................................................................................................................4
Equity and liability:.........................................................................................................................5
Requirement (i):...........................................................................................................................5
Requirement (ii):..........................................................................................................................6
Requirement (iii):.........................................................................................................................7
Cash flow statement:........................................................................................................................8
Requirement (iv):.........................................................................................................................8
Requirement (v):..........................................................................................................................9
Requirement (vi):.......................................................................................................................12
Other comprehensive income statement:.......................................................................................13
Requirement (vii):......................................................................................................................13
Requirement (viii):.....................................................................................................................13
Requirement (ix):.......................................................................................................................14
Requirement (x):........................................................................................................................14
Accounting for corporate income tax:...........................................................................................14
Requirement (xi):.......................................................................................................................14
Requirement (xii):......................................................................................................................15
Requirement (xiii):.....................................................................................................................15

3CORPORATE ACCOUNTING
Requirement (xiv):.....................................................................................................................16
Requirement (xv):......................................................................................................................16
Requirement (xvi):.....................................................................................................................17
Requirement (xvii):....................................................................................................................17
Conclusion:....................................................................................................................................17
References and Bibliographies:.....................................................................................................19

4CORPORATE ACCOUNTING
Introduction:
The current report would focus on evaluating the different financial statements of three
ASX listed firms operating in the same sector. The firms selected for this paper comprise of the
A2 Milk Company Limited, the Food Group Revolution Limited and Webster Limited. The
annual reports of the past three years of each of the selected organisations are analysed, which
mainly include liability and equity, cash flow statement, corporate income tax and other
comprehensive income statement.
The A2 Milk Company Limited has been established in New Zealand in 2000 and it is
involved in commercialising A1 protein free branded milk and associated milk products in New
Zealand, Australia, China, UK and USA. It produces skim milk powder and whole milk powder
as well having staff base of 180 (The a2 Milk Company, 2019).
The Food Revolution Group Limited functions as a food processing organisation in
Australia selling wide range of functional juices like cold-pressed oils, fibres, infused fruits, fruit
waters, functional juices and kombuchas. It provides its products in the form of ingredients to the
food manufacturers for fulfilling the needs of beverage, functional food as well as nutraceutical
markets (The Food Revolution Group, 2019).
Webster Limited functions as an agribusiness organisation in Australia and it has its
business operations in two segments, which include horticulture and agriculture. The main
products of the organisation include annual row crops like wheat, cotton, walnuts, almonds,
maize and others. In addition, the organisation is involved in exporting its products in Middle
East, Asia and Europe (Webster Limited, 2019).

5CORPORATE ACCOUNTING
Equity and liability:
Requirement (i):
As per the annual reports of the three selected organisations, certain items of equity are
included in the statement of financial position.
In accordance with the annual reports of the A2 Milk Company Limited, the most
significant equity items include share capital, retained earnings and reserves. The share capital of
the organisation is observed to increase from $130,548,000 in 2016 to $141,566 in 2018 due to
the increase in issuance of equity shares. Considerable rise in reserves could be observed from
($1,841,000) in 2016 to $123,442,000 in 2018, as there has been rise in hedge reserve, foreign
currency translation reserve and others (The a2 Milk Company, 2019). Finally, retained earnings
of the company have risen significantly from $4,371,000 in 2016 to $290,701,000 in 2018 owing
to the fact that it has managed to increase its profitability over the years.
From the annual reports of the Food Revolution Group Limited, the basic equity items
are issued capital, option reserves and revaluation surplus. In case of issued capital, the amount
has remained the same in all three years due to the fact that the firm has not issued new equity
shares in the market (Kulikova, Garyntsev & Gafieva, 2015). Similarly, no change could be
observed in options reserve due to no change in hedge reserve and options. However, there is
significant increase in its revaluation reserve from 2016 to 2018 due to increase in capital assets
(The Food Revolution Group, 2019).
For Webster Limited, the major items of equity constitute of issued capital, reserves and
retained earnings or accumulated losses. The issued capital has increased from $462,844,000 in
2016 to $477,865,000 in 2017 and it has remained the same in 2018 due to no issuance of new