Corporate & Financial Accounting - Assignment

Corporate
&
Financial
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
ASSESSMENT TASK:...................................................................................................................3
PART A...........................................................................................................................................3
(i)..................................................................................................................................................3
(ii) Movement in items reported under owner equity section with reason:.................................5
(iii) Items reported under liabilities section by both companies:.................................................9
(iii). Explanation about movement in items reported under liabilities head with reason:.........10
PART B..........................................................................................................................................12
Concepts of small proprietary company, large proprietary company and reporting entity:......12
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Corporate and financial accounting relates to business tasks which are dedicated in
funding, managing capital-structure, reporting of business's fiscal events, and evaluation with
aims to maximise yields and value for shareholders or investors (Adesara, 2016). Ultimate
motive here is to enhance creditability of corporation's final accounts because these are not only
supports corporation's decisions but also guides investors to take cost-effective investing
decisions. This study comprises complete and thorough analysis of balance sheet of companies
named Wesfarmers Ltd and Woolworths Group Ltd. Both these companies are top retailer of
Australia.
ASSESSMENT TASK:
PART A
(i)
Items reported under owners’ equity section:
Wesfarmers Ltd:
2018 2017 2016
Issued capital 22277 22268 21937
Reserved shares -43 -26 -28
Retained earnings 176 1509 874
Reserves 344 190 166
Total stockholders'
equity
22754 23941 22949
Woolworths Group Ltd
2018 2017 2016
Issued capital 6055 5615 5252
Reserved shares 278 -42 -69
Retained earnings 4073 3797 3124

Reserves 75 156 163
Total stockholders'
equity 10481 9526 8471
Following is an explanation of items reported by both companies, as follows:
Issued Capital: In this head company has reported securities issued. Wesfarmers Ltd
has issued share capital in year 2016 and 2017, due to which issued capital of company is
increased from AUD 21937 million in 2016 to AUD 22268 million in year 2017 and then AUD
22277 million in year 2018. Woolworths Group Ltd also reported increase in issued capital
which is (AUD in million) 6055, 5615 and 5252 in year 2018, 2017 and 2016 respectively.
Reserved Shares: Capital which is part of Authorized capital but remain unissued are set
aside or kept for reserve or further issuance, regarded as reserved shares. It is simply a reserve
which is used by company only for any contingent capital loss or other capital statutory
adjustment. Here in Wesfarmers Ltd company has reported reserved shares of -43, -26 and -28 in
year 2016, 2017 and 2018 respectively. While Woolworths Group Ltd has reported reserved
shares amounting 278, -42 and -28 in year 2018, 2017 and 2016 respectively.
Retained Earnings: It is part of net-income remain after payment of dividends to
company's shareholders. Company Wesfarmers has reported retained earnings of AUD 176
million, AUD 1509 million and AUD 874 million respectively in year 2018, 2017 and 2016.
While Woolworths Group Ltd has reported AUD 4073 million, AUD 3797 million and AUD
3124 million of retained earnings in 2018, 2017 and 2016 respectively.
Reserves: It is an amount of profit which is reserved by company and which will be used
by company for payment of any future contingency or expenditure. AUD 344 million, AUD 190
million and AUD 166 million in year 2018, 2017 and 2016 has been reserved by Company
Wesfarmers. Whereas Woolworths has reported reserve amounting AUD 75 million, AUD 156
million and AUD 163 million respectively in year 2018, 2017 and 2016.