Corporate and Financial Accounting

The report evaluates the different concepts such as accounting standard settings, owners’ equity, and corporate regulations. The further evaluation is conducted on the relationship between the regulation and the financial reports, which needs to be provided by the organizations on annual basis. Relevant companies have been chosen whose overall debt and equity conditions are evaluated for the previous four fiscal years.

Running head: CORPORATE AND FINANCIAL ACCOUNTING
Corporate and Financial Accounting
Name of the Student:
Name of the University:
Authors Note:

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Executive Summary:
The significance of the financial reporting system is detected in the assessment, where
adequate evaluation is conducted on the current financial reporting system. The further
evaluation is conducted on the relationship between the regulation and the financial reports,
which needs to be provided by the organizations on annual basis. Adequate discussion is
relatively conducted on the presentation of the annual report, whether it needs to be regulated
or dependent on the manager’s discretion. The discussion on the IASB is directly
conductance and the contributions of AASB are depicted.

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Table of Contents
Introduction:...............................................................................................................................3
Corporate Regulations:...............................................................................................................3
i) Indicating whether financial reporting can be handed over to the manager for voluntary
disclosure or regulated:..............................................................................................................3
Accounting Standard Setting:....................................................................................................5
ii) Detecting why IFRS is not compulsory for member countries, while detecting the
contribution of the AASB:.........................................................................................................5
Owners’ Equity:.........................................................................................................................6
iii) Detecting and discussing the items listed in equity:.............................................................6
iv) Conducting comparative analysis of equity and debt position of the selected firms:..........9
Conclusion:..............................................................................................................................11
References and Bibliography:..................................................................................................12

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Introduction:
The aim of the report is to identify standard and regulations that has been imposed an
organization for preparing the annual report. The report directly evaluates the different
concepts such as accounting standard settings, owners’ equity, and corporate regulations. The
further evaluation is conducted on the relationship between the regulation and the financial
reports, which needs to be provided by the organizations on annual basis. Adequate
discussion is relatively conducted on the presentation of the annual report, whether it needs to
be regulated or dependent on the manager’s discretion. The discussion on the IASB is
directly conductance and the contributions of AASB are depicted. Relevant companies have
been chosen whose overall debt and equity conditions are evaluated for the previous four
fiscal years.
Corporate Regulations:
i) Indicating whether financial reporting can be handed over to the manager for
voluntary disclosure or regulated:
Regulations have been a major backbone of the financial reports that has been
prepared by organizations during the past fiscal years. Therefore, due to the presence of
regulation organizations are forced to prepare and present their actual financial position
conducted during the fiscal year. There have been many where the financial reports of your
organization were manipulated by the managers for manipulating the financial strength of an
organization. In this context, Balakrishnan, Watts and Zuo (2016) mentioned that even with
the increase in regulations organizations have manipulated the financial reporting system to
alter the financial position and increase their profits. The regulation imposed by the regulators
has helped in improving the level of financial reports that an organization needs to portray on

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yearly basis. The regulations has a relatively helped in forming a conceptual framework,
which allows the organization to follow all the relevant steps for preparing the financial
report. Furthermore, the presence of Regulation and conceptual Framework has allowed the
current organizations to value their assets in fair value and depict their accurate financial
position.
Before strengthening the financial reporting system the organizations were able to
manipulate their annual report for inflating the financial position. There were many
accounting scandals, which were conducted by different organizations that had negatively
influence on the capital market and hampered the economic growth. Therefore, it could be
understood that even with the presence of accounting standards organization tend to miss-
utilize the information and represent a wrong financial report to their investor. The decision
of the financial reports is relatively conducted by the managers of the organization, which
depicts the question whether the reporting structure should be in the discretion of the
managers. The scandals such as HIH insurance, ABC, and Enron directly indicates the
misrepresentation of financial report that can be conducted by the manager of the
organization. On the contrary, Warren and Jones (2018) argued that managers should not be
given adequate authority for preparing the annual report, as they might manipulate the
financial progress to suit their needs and requirements.
Hence, adequate regulations need to be improved in the financial report preparation
system for presenting the accurate financial report of an organization and reducing the
chances of unethical practices. The preparation of the annual report in accordance with the
conceptual framework and the valuation system that is imposed by regulators would
eventually allow the stakeholders to understand the current financial progress of an
organization. Therefore, the presence of standards can help in evaluating both the tangible
and intangible assets of the organization.

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Accounting Standard Setting:
ii) Detecting why IFRS is not compulsory for member countries, while detecting the
contribution of the AASB:
Figure 1: AASB Contributions
(Source: Aasb.gov.au 2018)
The above figure directly indicates the level of contributions that has been made by
Australian accounting standard board for the accounting settings of IASB. The above
figuratively indicates the level of regulations that has been proposed by the AASB for
creating the relevant strategic directives and oversight for the organization. The standard
setting process for the organization was relatively conducted for reducing the unreliability of

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the organization financial report that has been prepared for the fiscal year. The AASB
standard has eventually helped in depicting the level of financial performance, which can
depict the accurate financial view of an organization. The measures used by the Australian
accounting standard board has a relatively indicated the awareness for the financial report,
with an outreach and educational condition for the organization.
The current IASB accounting standards are not compulsory for the member countries,
as they can choose alternative accounting standards that can be used by the companies. The
IFRS system is relatively complex and needs adequate expenses to complete the financial
report in according to the standard. However, companies that are multinational needs to
comply IFRS settings, as the operations are international, which would eventually help
investors to understand the accurate financial position that is derived by the organization
(Lins, Servaes and Tamayo 2017). IFRS system is only mandatory for organizations that are
listed in oversea market, as International investors needs to evaluate the financial progress of
the organization in an accurate stand, which can only be provided by the IFRS system.
Hence, the member countries of the IASB are not restricted to use IFRS, while the
multinational companies needs to comply with the IASB ruling.
Owners’ Equity:
iii) Detecting and discussing the items listed in equity:
Equity Components Explanation
Issued Capital The issued capital is the overall equity values, which has been
issued by the organisation. The total shares listed by the
organisation are depicted in the issued capital, which issued for
acquiring the share capital.

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Reserves The measures taken by the organisation for securing the capital
for future purchases are known as reserves, which are conducted
for specific assets.
Retained earnings The profits earned till date are held as retained earnings, which are
derived after subtracting the dividends
Non-controlling
interests
The investors having control of company’s share that has less than
50% and does not have control in the management’s decision is
relevant know as non-controlling interests.
Amcor Limited 2018 2017 2016 2015
Contributed equity 1,400.7 1,416.9 1,445.1 1,680.6
Reserves (907.1) (881.7)
(800.2)
(666.5)
Retained earnings 528.1 264.9 139.0 452.1
Non-controlling
interest
68.8 69.6 61.6 120.8
Total Equity 1,090.5 869.7 845.5 1,587.0
The total equity of Amcor Limited has relatively declined over the period of four
fiscal years, which was the relatively conducted due to the declining equity, reserves, and
non-controlling interest. Retained earnings of the organization are increased, while other
contributor coffee has declined during the fiscal years, which has the relatively forced the
organization to reduce their equity value (Assets.ctfassets.net 2018).
Boral Limited 2018 2017 2016 2015
Issued Capital 4,265.1 4,265.1 2,246.2 2,361.6
Reserves 155.8 19.3 162.0 166.2
Retained earnings 1,309.9 1,156.1 1,098.1 996.3
Total Equity 5,730.8 5,440.5 3,506.3 3,524.1

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The above organization’s overall equity value has relatively increased during the past
fiscal years, which indicate its rising financial position. The improvement in equity was a
relatively boosted by the rising issued capital and retained earnings of the organization.
However, the slide decline in reserves of the company has been witnessed during the past
fiscal years. This improvements in the equity section has the relatively allowed the
organization to improve its total equity value in the past four fiscal years (Boral.com 2018).
CSR Limited 2018 2017 2016 2015
Issued Capital 1,036.2 1,036.8 1,041.1 1,042.2
Reserves (53.2) (73.4) 15.8 17.1
Retained earnings 244.4 191.6 127.0 86.4
Non-controlling
interest 46.7 51.5 133.3 60.3
Total Equity 1,274.1 1,206.5 1,317.2 1,206.0
The equity value of CSR Limited has increased minutely over the period of four fiscal
years, which was due to the improvements in the retained earnings section of the
organisation. The other part of the equity contribution was mainly declining such as issued
capital, reserves and non-controlling interests. The increment in the retained earnings has
only pushed the total equity value of CSR to positive (Csr.com.au 2018).
Fortescue Metals Group
Limited 2018 2017 2016 2015
Contributed equity 1,287.0 1,289.0 1,301.0 1,294.0
Reserves 46.0 39.0 33.0 46.0
Retained earnings 8,386.0 8,392.0 7,058.0 6,184.0
Non-controlling interest 12.0 14.0 14.0 13.0
Total Equity 9,731.0 9,734.0 8,406.0 7,537.0
The above table indicates the level changes that have been witnessed in equity section
of Fortescue Metals. The drastic increment in the total equity was mainly due to the rising

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retained earnings of the organisation during the past fiscal years. On the other hand, the
contributed equity, reserves and non-controlling interest of the organisation mainly declined
during the fiscal years, while the retained earnings of the organisation increased
(Fmgl.com.au 2018).
iv) Conducting comparative analysis of equity and debt position of the selected firms:
Boral Limited 2018 2017 2016 2015
Equity 5,730.8 5,440.5 3,506.3 3,524.1
Debt 2,453.0 2,333.0 893.0 817.0
The contribution condition of Boral Limited in relevantly depicted in the above table,
where the increment in debt has been greater than equity. Both the equity section and debt
sector of the organisation has growth adequately, which has helped in boosting the level of
income and supporting operations of the organisation. The immense increment in growth is
relevantly seen in 2017, which raised the level of debt accumulation conducted by the
organisation to support its operations (Boral.com 2018).
CSR
Limited 2018 2017 2016 2015
Equity 1,274.1 1,206.5 1,317.2 1,206.0
Debt 28.0 30.5 3.3 10.4
The increment in the debt and equity section of CSR has been witnessed in the above
table, where the combination of equity values is relevantly high. The company has relevantly
focused on continuing its operations with the help of equity and low debt is acquired to be
support its operations. However, during the past four fiscal years the values of debt and
equity has mainly inclined slowly indicating the organisations growth over the fiscal years
(Csr.com.au 2018).

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Fortescue Metals Group
Limited 2018 2017 2016 2015
Equity 9,731.0 9,734.0 8,406.0 7,537.0
Debt 3,112.0 2,633.0 5,188.0 7,188.0
The operations of the organisation have relevantly improved over the past fiscal years,
where the company has increased its exposure in equity, while reduced the debt
accumulation. This has mainly strengthened the organisations overall solvency condition and
reduced the leave of financial cost, which was being incurred each year. The increment in
equity indicts the trust of investors, which has been growing over the period, while the
decline in debt indicates the high performance, which is being conducted by the management
to reduce its overall debt (Fmgl.com.au 2018).
Amcor 2018 2017 2016 2015
Equity 1,090.5 869.7 845.5 1,587.0
Debt 3,872.2 4,049.5 3,829.4 2,880.4
The financial position of the above company has mainly declined over the period of
four fiscal years, where reduction on equity is witnessed, while debt is increased. This rise in
the debt value has mainly allowed the organisation to increase its finance cost and raise the
chances of becoming insolvent. The current condition of the organisation is mainly vital,
where the total equity is lower than the current debt that has been accumulated by the
organisation (Assets.ctfassets.net 2018).
After evaluating the debt and equity condition of the above four companies it could be
understood that some of the organisation’s overall financial position is at vital conditions.
The debt and equity position of Fortescue Metal and CSR Limited has relevant improved,
where the equity values have increased, while the debt composition has declined. This
directly indicates the high financial condition of the organisation. The performance of Boral

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Limited has improved, while the debt accumulation has also increased, where there is no
alarming condition currently prevailing within the organisation. However, the current
financial position of Amcor Limited is mainly at alarming levels, where high debt has been
accumulated by the organisations, where equity values are low.
Conclusion:
The different segments of the financial report are relatively evaluated in the above
assessment, which helps in detecting significance of financial report. The overall financial
reports needs to be formulated with the help of regulations, is it reduces the level of an ethical
approach that is conducted by the organization to inflate their financial report. in addition,
AASB has contributed immensely to create an adequate accounting system, which might
allow organization to present their actual financial condition. The financial report of
Fortescue Metal, Boral Limited, Amcor Limited and CSR Limited is evaluated to understand
their current financial performance.

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References and Bibliography:
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Assets.ctfassets.net. 2018. [online] Available at:
https://assets.ctfassets.net/f7tuyt85vtoa/Ry9ogH9cQemqGA800oiGE/cbcc6bef0d76b79be2a2
27dfc13a7e87/Amcor_Annual_Report_2018.PDF [Accessed 27 Sep. 2018].
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Csr.com.au. 2018. Annual Meetings and Reports. [online] Available at:
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26 Sep. 2018].

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Epstein, M.J., 2018. Making sustainability work: Best practices in managing and measuring
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[Accessed 27 Sep. 2018].
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