corporate and financial accounting

Corporate and
financial accounting

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
1. Accounting standard setting....................................................................................................1
2. Reporting entity.......................................................................................................................2
PART 2............................................................................................................................................3
1. Number of business combinations in the company report.......................................................3
2. The fair value of the paid consideration..................................................................................3
3.The components of acquisition costs........................................................................................3
4. The fair value of net identifiable assets acquired....................................................................4
5. Recognised value of each class of assets, liabilities and contingent liabilities........................4
6. Carrying value of each of the assets, liabilities and contingent liabilities...............................5
7. Value of goodwill or gain in the bargain purchase which is being recorded..........................6
8. Factors that are contributing to the recognition of goodwill or gain on bargain purchase......7
9. The amount of goodwill as percentage of total consideration paid.........................................7
10. Amount of identifiable intangible assets as the percentage of total consideration paid........8
11. Comparative analysis on the two company’s disclosure on business combination...............9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Corporate accounting could be defined as the accounting which is mainly focused with
preparation of final accounts of all the companies so that they can analyse the results of them to
determine the performance of business. On the other hand, financial accounting is the process of
generating the financial statements so that the current situation of business could be determined
and strategic decision to make improvement in the performance could be formed (Bepari and
Mollik, 2017). There are two different parts of this report first one is focused with accounting
standard setting, regulation and disclosure. Second part is based upon business combination or
acquisition analysis. Two organisations that are selected for completing the part B are Australian
Dairy Nutritionals Group and Angel Seafood Holding. Both the entities are operating under food
and beverage industry of Australia. This part of the report will cover different topics that will be
analysed form the annual report of the entity. These are business combinations, fair value
consideration, recognised and carrying value of identifiable assets, value of goodwill or gain,
factors contributing to the recognition of these two elements, amount paid for total consumption
etc. Apart from this, amount paid for identifiable intangible assets and comparative analysis of
both the companies are also covered in this assignment.
PART 1
1. Accounting standard setting
The Australian Government Agency which is involved in development and maintenance
of financial reporting standards is known as Australian Accounting Standards Board. All the
rules and regulations that are developed by it are applicable to all the business entities that are
part of Australian Economy whether these are public or private. All the standards that are
formulated by the board are equivalents to the IFRS which are international financial reporting
standards. The main responsibility of the board to develop, maintain and issue all the accounting
standards for the company law of Australia (Bodle, Cybinski and Monem, 2016). The board is
taking part in the global standard setting process by analysing all the IFRS and making sure that
all the accounting standards in Australia are formulated by paying attention towards all of them.
All the IFRS are mainly formulated by International Accounting Standards Board. All the
countries that are member of IASB does not require to follow the IFRS because all the standards
that are followed by them are focused with IFRS. There are various countries that are not using
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IFRS which are US, China, Macao, Niger, Bolivia etc. All these nations are having their own
accounting standards. There are 90 countries that are using IFRS for the reporting of detailed
financial information.
2. Reporting entity
There are various types of companies that are operating business in Australia. Description
of all of them is as follows:
Small proprietary company: In order to be the small proprietary company, the business
is required to quality two tests. First one of the gross operating revenues for the year should be
less than 25 million dollars. Second area which is required to be qualified by the business is
related to value of consolidated gross assets. If it is less than 12.5 million dollars than only the
business will be considered as the small proprietary. Apart from this, it is also very important to
have less than 50 employees for a firm which is small in size. If a company will be qualified as
the small proprietary company then it will not be required to generate the final accounts if these
are not directed by ASIC or the shareholders. Apart from this, there is no specific regulation for
such business regarding the audit compliance (da Costa Junior, 2019).
Large proprietary company: All the businesses that are willing to be the large
proprietary company are required to quality the specific criteria for the same purpose. First one is
related to the revenues that should be at least 50 million dollars and more than it. The value of
consolidated fixed assets of the enterprise is required to be at least 25 million dollar or more than
it. A business will be the large proprietary company if the number of employees of it will be
more than 100. Accounting to Australian Accounting Standard Board it is very important for a
business if it will be qualified as large proprietary company to prepare and lodge all the financial
statements and director’s report for all the financial years. Apart from this, it is also very
important for the company to audit all its accounts on yearly basis.
Reporting entity: A business entity in which it is very important to expect that all the
users of final accounts are dependent on the general finance purpose account to analyse the
actual financial performance and position of the business is known as reporting entity. All the
financial statements that are used by them are required to be analysed by them so that they can
use the finance related information for formulating decision in future. If a business will be
qualified as the reporting entity then it will be very important for it to make sure that all the
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