Corporate Accounting | Australian Securities Exchange (ASX)

Running head: CORPORATE ACCOUNTING
Corporate Accounting
Name of the Student
Name of the University
Author’s Note

1CORPORATE ACCOUNTING
Abstract
Companies require both the internal sources of funds and external sources of funds in order to
cater to various needs of the business. Moreover, companies have to incur both interest bearing
liabilities and non-interest bearing liabilities while carrying out the business operations. At the
same time, this is required for the companies to comply with the required standards and
provisions in order to account for provisions, contingent liabilities and contingent assets. The
same needs to be followed in case of the recognition and measurement of each class of assets.

2CORPORATE ACCOUNTING
Table of Contents
Introduction......................................................................................................................................4
(i) Sources of Fund..........................................................................................................................4
Evolution Mining.........................................................................................................................4
Incitec Pivot.................................................................................................................................4
(ii) Sources of Fund Evolution........................................................................................................5
Evolution Mining.........................................................................................................................5
Incitec Pivot.................................................................................................................................5
(iii) Percentage of Funds..................................................................................................................6
Evolution Mining.........................................................................................................................6
Incitec Pivot.................................................................................................................................7
(iv) Merits and Shortcomings..........................................................................................................7
Trade and Other Payable.............................................................................................................7
Interest Bearing Liabilities..........................................................................................................8
Issued Capital...............................................................................................................................8
Reserves.......................................................................................................................................9
Retained Earnings........................................................................................................................9
(v) Liability Types.........................................................................................................................10
(vi) Key Provisions of AASB 137.................................................................................................11

3CORPORATE ACCOUNTING
(vii) Reference related to AASB 137.............................................................................................12
(viii) Categories of Assets.............................................................................................................14
Evolution Mining.......................................................................................................................14
Incitec Pivot...............................................................................................................................14
(ix) Measurement Basis.................................................................................................................15
Evolution Mining.......................................................................................................................15
Incitec Pivot...............................................................................................................................16
Conclusion.....................................................................................................................................17
References......................................................................................................................................19

4CORPORATE ACCOUNTING
Introduction
Two Australian Securities Exchange (ASX) listed companies are selected for this report;
they are Evolution Mining and Incitec Pivot Limited (Incitec Pivot). There are different parts
of the report. First part identifies the sources of funds in these two companies. Second part
discusses about the evolution of these funds. The third part identifies the percentage of
internally-generated and externally-generated funds. The fourth part shows the merits and
demerits of each source o fund. The fifth part discusses about the liabilities. The sixth and
seventh parts discusses about the provision of AASB 137 and its reference in these companies.
The eighth and ninth parts discuss about these companies’ liabilities and their measurement
basis.
(i) Sources of Fund
Evolution Mining
The sources of funds used by Evolution Mining in 2019, 2018 and 2017 include issued
capital, reserves, retained earnings, trade and other payables and interest bearing liabilities
(evolutionmining.com.au 2020).
Incitec Pivot
Incitec Pivot has used certain sources of funds in 2019, 2018 and 2017 and they are trade
and other payables, interest bearing liabilities, issued capital, reserves and retained earnings
(investors.incitecpivot.com.au 2020).

5CORPORATE ACCOUNTING
(ii) Sources of Fund Evolution
Evolution Mining
As per the last three years’ annual reports of Evolution Mining, trade and other payables
have decreased from 2017 to 2018 and have increased in 2019. Current interest bearing liabilities
have registered an increasing trend from 2017 to 2019 while the non-current interest bearing
liabilities have continuously decreased from 2017 to 2019. There has not been any change in the
issued capital from 2017 to 2019. However, the company has continuously increased its reserves
from 2017 to 2019. Key changes can be seen in the retained earnings of Evolution Mining in last
three years. In 2017, the company reported accumulated losses of $94,270,000 instead of
retained earnings. However, improvement in this situation can be seen in 2018 when the
company reported retained earnings of $59,260,000 and there has been further major increase in
this amount in the year 2019 that is $150,372,000. On the overall basis, it can be seen that the
company has put emphasis on the increase in funds for different business use
(evolutionmining.com.au 2020).
Incitec Pivot
According to the 2019, 2018 and 2017 annual reports of Incitec Pivot, there has been a
continuous increase in the trade and other payable of the company from 2017 to 2019. The
company has reported a huge increase in the current interest bearing liabilities from 2017 to
2019. On the contrary, there has been a continuous decrease in the non-current interest bearing
liabilities of the company from 2017 to 2019. The same trend can be seen in the issued capital of
Incitec Pivot as this has decreased from 2017 to 2019. The presence of negative reserves can be
seen in 2017 to 2019 which denotes the presence of accurate losses. However, Incitec Pivot has
been able in reducing this loss significantly from 2017 to 2019 as it has a decreasing trend.