CORPORATE ACCOUNTING Corporate Accounting Name of the Student

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

1CORPORATE ACCOUNTING
Table of Contents
Part A: Short Essay on Accounts for Share Buy-backs....................................................2
Part B: Accounting for Impairment Loss...........................................................................9
References.....................................................................................................................11

2CORPORATE ACCOUNTING
Part A: Short Essay on Accounts for Share Buy-backs
Introduction
Share buy-back is considered as a common accounting practice that can be
seen in most of the companies all over the world. Share buy-back can be considered as
the process of re-acquisition by the company of its own shares or stocks
(Andriosopoulos, Andriosopoulos and Hoque 2013). This process represents a more
flexible manner to return money to the shareholders. In addition, the most convincing
reason for a company to buy back their own stocks from the open market is to bring
improvements in their financial statements. Share buy-back is also regarded as share
repurchase and it leads to the increase in return on assets along with increase in the
shareholder equity. After the buy-back or repurchase, the companies cannot trade the
shares and they are held as treasury stock or retired outright (Zhang, Donohue and Cui
2015). It is the responsibility of the companies to ensure proper recording of the
transactions of share buy-back with the aim to retain the accuracy of the financial
statements. The present study undertakes the analysis of the accounting procedure for
share buy-back and puts emphasis on the processes that the companies need to follow
in the share buy-back process.
Discussion
Share buy-back is considered as a common practice in the Australian
companies. In order to make share buy-back more easy to get to, the provision for
share buy-back were simplified in the year 1995 by the replacement of certain
compulsory processes that involve auditors, advertisements, experts and declarations

3CORPORATE ACCOUNTING
with the new safeguards for the shareholders and creditors with the focus to continue
solvency of the company, justice for shareholders along with the effective disclosure of
the necessary relevant information (Chatterje and Mukherjee 2015). There are certain
basic types of share buy-backs; they are Equal access buy-backs, Selective buy-backs
and other types of buy-backs.
Equal access buy-back is considered as the most common as well as
straightforward form of share buy-backs in the companies. Under this process, the
companies offer all the ordinary shareholders a reasonable opportunity to take into
consideration the offer which is to buy back the same percentage of the companies’
ordinary shares. This particular scheme of share buy-back includes only insignificant
difference between the offers. Under this share buy-back scheme, the companies are
allowed to develop their own timeline with the aim to match their circumstances. It can
be seen that most of the companies in Australia opt for this particular share buy-back
scheme (Reddy Yarram 2014).
Another crucial share buy-back type of Selective buy-backs and under this
particular scheme, companies do not make identical offers to all the shareholders as the
offers are made only to some of the shareholders of the companies. However, the
shareholders must first approve the scheme or special resolution regarding the same
needs to be produced. It can be seen in many circumstances that the selling
shareholders of the companies do not vote in the favor of special resolution for the
approval of the selective buy-back. There is not any limit applicable in this buy-back
process (Jenner 2015).