Evaluation and Analysis of Liquidation of One Tel Phone, HIH Insurance and ABC Learning

Running head: FINANCIAL ACCOUNTING
Financial Accounting
Name of the Student
Name of the University
Author’s Note

1FINANCIAL ACCOUNTING
Executive Summary
The important discussions of the report is inferred with the evaluation and analysis of the
different reasons and pertaining to the liquidation of three significant companies namely One Tel
Phone, HIH Insurance and ABC Learning. It needs to be also seen that the study has been able to
state that there is a breach of ethical standard in the company which has led to governance issues.
In the case of ABC Learning the total amount of the liability was seen to be stable in 2007,
however there had been a reclassification of AUD 1.1 Billion pertaining to the borrowing of
current and non-current liabilities. In 2007-08 the profit of the company fell to as low as 42%.
Moreover, due to the increasing in the debt it had to pay $ 1.2 Billion for the breach in the debt
covenant. The similar nature of the implications is applicable to the case of HIH Insurance and
the company was covered in high amount of debt leverage along with insurance liability which
led to insolvency.

2FINANCIAL ACCOUNTING
Table of Contents
Introduction......................................................................................................................................3
Company Description......................................................................................................................3
Cause for Liquidation......................................................................................................................3
Corporate Governance and Ethics...................................................................................................5
Responsibility of the Liabilities.......................................................................................................6
Conclusion.......................................................................................................................................6
References........................................................................................................................................8