Corporate and Financial Accounting

Corporate and
Financial Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
1. Explanation of the way in which Australian Accounting Standards Board take part in global
accounting standard setting process along with the reasons due to which IFRS are not
compulsory for the member countries of IASB...........................................................................1
2. Examination of the concept of small and large proprietary company and reporting entity
Along with the implication of being classified as either one of these types................................2
PART B............................................................................................................................................3
1. Total number of business combinations in the company report..............................................3
2. Fair value of consideration.......................................................................................................3
3. Components of acquisition costs.............................................................................................4
4. Fair value of all the net identifiable assets acquired................................................................4
5. Recognised value of each class of assets, liabilities and contingent liabilities........................5
6. Carrying value of each class of assets, liabilities and contingent liabilities............................5
7. The information regarding the value of goodwill or gain on bargain which is recorded in the
report............................................................................................................................................6
8. All the factors that are contributing in the recognition of the goodwill or gain on bargain
purchase.......................................................................................................................................7
9. The amount of goodwill as percentage of total consideration paid.........................................7
10. The amount of identifiable intangible assets as a percentage of total consideration paid.....8
11. Comparative analysis of the companies regarding disclosure of the business combination. 8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Corporate and financial accounting are two different terms but both of them are required
to be focused by all the businesses as with the help of them companies can record all the
financial transactions as well as analyse the performance of business. If the organisation will not
be paying attention towards them then it may leave negative impact upon functionality of
business (Barker, 2019). Present report is having two different parts, Part A is focused with
accounting standard setting and reporting entity. Part B is related to the analysis of business
combination or acquisition assessment of the company. Two companies which are selected for
this part of the report are Baby Bunting Group Ltd and Accent Group Ltd. All the companies are
local entities of Australia. This assignment covers various topics such as role of Australian
Accounting Standard Board in setting global standard and concepts of small and large
proprietary and reporting entity. Additionally, detailed analysis of business communication of
two different companies is also covered in this report.
PART A
1. Explanation of the way in which Australian Accounting Standards Board take part in global
accounting standard setting process along with the reasons due to which IFRS are not
compulsory for the member countries of IASB
Australian Accounting Standards Board is responsible for taking part in the process of
global accounting standard setting process. All the accounting standards that are followed in
Australia are same as the standards of IFRS. When these standards are formulated by IASB then
AASB plays major role because all the standards that are followed in Australia are similar to
IFRS. The Australian Board take part in the global standard setting process effectively by
suggesting the IASB to make sure that all the IFRS are effectively formulated or not. Main
purpose of taking part in this process is to make sure that all the Australian Accounting standards
are issues, developed and maintained in systematic manner and amended with IFRS. AASB
consult with a range of stakeholders of companies of the Australia and analyses feedback from
them regarding IFRS. All the views of them are shared by AASB with IASB so that appropriate
changes could be made before setting a new standard (DAVALLOU and MAHMOODI, 2017).
If a country is a part of IASB then it does not required to follow IFRS because the
accounting process which will be followed by the will be formulated with the concept of
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international reporting standards. For all the member countries of International Accounting
Standard Board it is not compulsory that they should follow the IFRS system because the rules,
regulation and principles for accounting which will be followed by them will have all the
amendments of IFRS.
2. Examination of the concept of small and large proprietary company and reporting entity Along
with the implication of being classified as either one of these types
In all the countries different companies operate business for different objectives. Some
types of businesses are described below:
Small proprietary company: A small business which is satisfying two of the following
criteria will be treated as small proprietary company:
 The consolidated revenues for the year ending are less than 10 million dollars.
 The total value of the consolidated assets at the end of accounting years is less than 5
million dollars.
 The number of staff members working within the company is less than 50 at the end of
the accounting year.
If a business will comply with two of the above described points then it will be the small
proprietary company (Gilala, 2017).
Large proprietary company: An organisation which is complying with two of the
following criteria will be treated as large proprietary company:
 The number of individuals working within the enterprise is more than 50.
 The value of gross operating revenues is more than 10 million dollars for the accounting
year ending.
 The value of gross assets for the year ending is more than 5 million dollars.
If a business entity is fulfilling two of the above criteria then it will be the large
proprietary company.
Reporting entity: A business in which all the stakeholders and other concerned persons
are interested in determining the business position and performance is known as reporting entity.
All of them use the information for the purpose of making future decisions so that all the goals
and objectives could be met. For a reporting entity it is very important to make sure that it is
complying with all the financial guidelines so that accurate and transparent final accounts could
be generated (Kowalewski, 2016).
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