BAO2203 Corporate Accounting Assignment: Bellamy's Australia Ltd
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BAO2203 - Corporate Accounting (BAO2203)
Added on 2020-05-28
BAO2203 Corporate Accounting Assignment: Bellamy's Australia Ltd
BAO2203 - Corporate Accounting (BAO2203)
Added on 2020-05-28
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Running head: CORPORATE ACCOUNTINGCorporate AccountingName of the StudentName of the UniversityAuthor’s Note
1CORPORATE ACCOUNTINGTable of ContentsPart I.................................................................................................................................................1Answer to Question 1..................................................................................................................1Answer to Question 2..................................................................................................................1Answer to Question 3..................................................................................................................2Answer to Question 4..................................................................................................................2Part II...............................................................................................................................................3Introduction..................................................................................................................................4Literature Review........................................................................................................................4Australian Disclosure Regime.................................................................................................4Continuous Disclosure Principles............................................................................................5Selective Disclosure.................................................................................................................7Surveillance.............................................................................................................................8Conclusion...................................................................................................................................8References......................................................................................................................................10
2CORPORATE ACCOUNTINGPart IAnswer to Question 1It can be seen in the recent times that Bellamy’s Australia Ltd has been going throughmajor financial turmoils and some specific reasons can be held responsible for that. Certificationand Accreditation Administration of the People’s Republic of China (CNCA) affected thefinancial position of Bellamy’s Australia Ltd by suspending their license for exporting milkformula from Melbourne plant. As a result of this, CNCA had halted the share trading ofBellamy’s Australia Ltd that has major negative effect on the financial position of Bellamy’sAustralia Ltd. Moreover, it can also be observed that Bellamy’s Australia Ltd did ask to theAustralian authority to suspend their shares that have a major negative impact on the financialposition of Bellamy’s Australia Ltd. The company took this decision due to the non-compliancewith the standards of continuous disclosure framework. However, Bellamy’s Australia Ltd isconsidering this suspension as a positive aspect as they would get time to comply with theobligation of contiguous disclosure framework. Answer to Question 2According to the annual report of Bellamy’s Australia Ltd, there is not any mention aboutgoodwill in the financial statements of 2016. The company has mentioned about three majoracquisitions of business assets in the year 2016. First, they acquired segment asset worth $719,000 in Australia; second, they acquired assets worth $ 25,000 in China and Hong Kong;third, they acquired segment assets worth $ 8000 in East Asia (annualreports.com 2018). Theannual report of Bellamy’s Australia Ltd also states the presence of cash and cash equivalentworth $ 32,295,000 in 2016 and $ 32,035,000 in 2015. It indicates that there is a minor increasein cash and cash equivalent in 2016 than 2015 (annualreports.com 2018).
3CORPORATE ACCOUNTINGAnswer to Question 3A decreasing trend in the profits in 2017 can be from the analysis of the financialstatements of 2017 than 2016. The annual report states that amount of gross profit decreased in2017 as compared to 2016; that is $ 91,521,000 in 2017 and $ 101,228,000 in 2016(investors.bellamysorganic.com.au 2018). In addition, it can also be seen that there is a majordecline in the net profit of Bellamy’s Australia Ltd in 2017 from 2016 as net profit in 2017became negative; that is net loss of $ 809,000 in 2017 and net profit of $ 38,328,000 in 2016.The company has impairment losses in 2017 and 2016; they are $ 424,000 in 2017 and $ 36,000in 2016. There has also been increase in administrative and other cost of the company. Inaddition, the company received suspension from Bellamy’s Australia Ltd on milk-exportinglicense (investors.bellamysorganic.com.au 2018).Answer to Question 4The above discussion shows the weak financial condition of Bellamy’s Australia Ltd inthe year 2017. The financial position of the company has been badly affected with share tradinghalt and suspension of license. All these aspects together contributed towards decreased grossprofit and net loss in the year 2017. Thus, it is recommend to the clients to sell the shares ofBellamy’s Australia Ltd in this situation.
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