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Corporate and Financal Accounting

   

Added on  2021-02-20

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CORPORATE ANDFINANCIALACCOUNTING

EXECUTIVE SUMMARYEquity Accounting Method and Consolidated Accounting Method has been discussed inthe below report. Further, it has been advised to company to use purchase method for its takeoverprocess. Furthermore, applicability of various accounting standards has been explained in thisreport. Moreover, Intra Group Transactions was summarised in the report and effect of thistransaction on profit and non controlling interest was analysed through which it is concluded thatcompany has adjust this transaction by preparing Consolidated Statement. Moreover, DiscloserRequirement of Consolidated financial information and Non controlling interest has beenevaluated through which it was concluded that it is essential for a company to disclose thisstatements to stakeholders so that they can make investment decisions. At last, challenges facedby company while preparation of consolidation statement was outlined in this report.

Table of ContentsINTRODUCTION...........................................................................................................................3PART A...........................................................................................................................................31. Legislative requirements in formation of company ................................................................3PART B............................................................................................................................................52. Intra Group transactions and allocation of profits...................................................................5PART C............................................................................................................................................63. Disclosure Requirements of NCI and Issues in consolidation process....................................6CONCLUSION................................................................................................................................7.........................................................................................................................................................7REFERENCES................................................................................................................................82

INTRODUCTIONFinancial accounting is compulsory for the companies and is regulated by law and needto follow accounting standards which the accountant of the company need to apply to thefinancial records of the company. On the other hand corporate accounting is more centred on theneeds of the business rather than meeting external standards. It involves projection of differentactivities and help the management of the company in taking decisions and evaluating theirperformance. The report will explain the legal requirements needed in forming the company andits account for equity, capital and distributions. It also includes methods of raising funds of thecompany by using share capital or debt. At last it will talk abbot ability to prepare financialstatements and how data is collected and interpreted. PART A1. Legislative requirements in formation of company In the above case, the JKY limited wants to proposed corporate strategy that is takeoverof a much smaller company which is an ASX listed entity operating in the same industry name asFAB limited. The company is confused between the two strategies which is purchase method ofacquisition and other on is Equity Method after obtaining significant influence. SignificanceInfluence is when a company or joint venture involved in decision making related to Operational& Financial policies but are not able to control operations & financials of business firm(Agrawal,and Cooper, 2017).AASB 3 Business Combination is an accounting standard through which a businessfirm can check reliability and comparability of information included in financial statement of acompany. This standard is applicable on accounting of joint ventures, acquisitions, mergers orcombination of companies which are having common control on their business operations andfinancials. As JKY and FAB Limited is making decision of takeover it is essential for both thecompanies to follow guidelines provided by AASB 3. These companies are required preparetheir financial statements in accordance with this standard. Further companies can identifymethod of acquisition with the help of this AASB as profits of company are evaluated by usingdifferent method and most appropriate accounting method is selected for Takeover. As in this case Consolidation and Equity method of accounting is analysed by thisstandard by JKY Limited.Consolidation Accounting Method3

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