Financial Performance and Accounting Policies of Telstra Corporation

Running head: CORPORATE ACCOUNTING
Corporate
Accounting
9/13/2019

CORPORATE ACCOUNTING 1
Table of Contents
Introduction................................................................................................................................2
Overview of Telstra Corporation...........................................................................................2
Competitor analysis of Telstra...............................................................................................3
Internal and External Funding in Telstra...............................................................................4
Analysis of Financial Structure of Telstra.............................................................................4
Key Elements of Financial performance of Telstra...............................................................5
Changes in the accounting policies........................................................................................7
Property, plant and equipment accounting policy..................................................................7
Intangible Assets and Accounting Policy..............................................................................8
Sustainability Initiatives.........................................................................................................8
Importance of corporate social responsibility........................................................................8
Importance of Sustainability..................................................................................................9
Conclusion..................................................................................................................................9
References................................................................................................................................10

CORPORATE ACCOUNTING 2
Introduction
Corporate accounting is said to be a separate branch of accounting that deals with the
accounting for the businesses, management of their final accounts, and cash flow statements
analysis and explanation of the financial outcomes of the business and accounting for the
particular event such as absorption, preparing consolidated balance sheets, and amalgamation
(Trujillo-Ponce, Samaniego-Medina & Cardone-Riportella, 2014). The intent of this report is
to discuss about the financial position of Telstra Corporation which is one of the leading
telecommunication company of Australia by reviewing its financial statements. The report is
comprised of detailed description of the company and the industry in which it operates.
Besides this, the detailed regarding the competitors of the company has been presented in
order to know the position of the companies in the Australian market. In addition to this, the
paper is describing the key elements of the financial reporting of the company.
Overview of Telstra Corporation
Telstra Corporation is one of the well-known telecommunication companies of
Australia that operates and builds the telecommunication networks; allow internet access,
markets voice, pay television, and mobile. Telstra is operating in the Australian market from
1975 with the history of 44 years (Grad Connection, 2019). Telstra is now converted to be a
private company and is going through a change program to be the customer focused
organization. The company has 32293 employees in its Australian subsidiaries. This
company deals in the telecommunication industry of Australia (IBIS World, 2018). The
telecommunication services sector has altered the manner people of Australia communicate
by offering high level of connectivity. Increasing mobile services demand in the market has
impacted the demand of fixed line services that has been driven by the increasing
consumption of the mobile data and improving mobile connectivity. But, the decreasing

CORPORATE ACCOUNTING 3
demands of the fixed line services. However, reducing demand for the fixed line services and
intensive price competition in the segment of mobile services has majorly constrained the
capability of the subdivision to generate revenue. The total revenue of the subdivision is
anticipated to augment at the yearly rate of around 0.5% in the coming five years through
2018-19, to around $37.6 billion (IBIS World, 2019). The Mobile providers in the industry
are competing on the basis of price by providing additional value on their covered plans.
Competitor analysis of Telstra
The telecommunication industry of Australia is considered to be very competitive due
to presence of limited but strong players competing on the basis of price, quality of network,
and services. In fact as per the report of the Australian Competition and Consumer
Commission released 2015-2016, the competition on the Australian telecommunications
sector is based on the price aspect (Commonwealth of Australia, 2019). In the Australian
market, the importance of the National Broadband Network is increasing with time due to
increasing number of connections over the year. According to the analysis conducted by the
Australian commission in the year 2016, it was identified that there were around 1.1 million
NBN services activated (Flannery, 2017). All these services were mainly in district areas and
utilized wholly for residential services. Then in the year 2017, there were around 2 million
services activated, with the increasing services delivered in the provided in urban areas
increasing (Flannery, 2017). However, the altering nature of the customer can impact the
operations of different business and the increasing demand can offer higher benefits to the
business. Competition in the delivering of the services over the NBN is the major concern. As
per the review of the ACCC, Telstra has acquired the 48% of the NBN services, TPG has
covered iiNet 26%, and Optus has covered 14% whereas Vocus has covered the M2 with 6%
(Flannery, 2017). This highlights the relative shares of the businesses in the fixed line market
because there players are dominating the industry.