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The Role of the Continuous Disclosure Framework

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Added on  2020-05-28

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THE ROLE OF THE CONTINUOUS DISCLOSURE FRAMEWORK THE ROLE OF THE CONTINUOUS DISCLOSURE FRAMEWORK 8 The Role of the Continuous Disclosure Framework Author’s Note: Course ID: Part I: 2 Answer to Question 1: 2 Answer to Question 2: 2 Answer to Question 3: 3 Answer to Question 4: 3 Part II: 4 1. Literature review: 5 3.1 Australian disclosure regime: 5 3.2 Principles of continuous disclosure: 6 3.3 Selective disclosure: 7 3.4 Surveillance:

The Role of the Continuous Disclosure Framework

   Added on 2020-05-28

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Running head: THE ROLE OF THE CONTINUOUS DISCLOSURE FRAMEWORKThe Role of the Continuous Disclosure FrameworkName of the Student:Name of the University:Author’s Note:Course ID:
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1THE ROLE OF THE CONTINUOUS DISCLOSURE FRAMEWORKTable of ContentsPart I:...............................................................................................................................................2Answer to Question 1:.................................................................................................................2Answer to Question 2:.................................................................................................................2Answer to Question 3:.................................................................................................................3Answer to Question 4:.................................................................................................................3Part II:..............................................................................................................................................41. Abstract:...................................................................................................................................42. Introduction:............................................................................................................................43. Literature review:.....................................................................................................................53.1 Australian disclosure regime:............................................................................................53.2 Principles of continuous disclosure:..................................................................................63.3 Selective disclosure:..........................................................................................................73.4 Surveillance:......................................................................................................................84. Conclusion:..............................................................................................................................9References:....................................................................................................................................10
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2THE ROLE OF THE CONTINUOUS DISCLOSURE FRAMEWORKPart I:Answer to Question 1:According to the annual report of Bellamy’s Australia Limited, the organisation had just$1 million in net cash at 31st December 2016 and the banking facilities (debt) are covering itsworking capital needs (Investors.bellamysorganic.com.au 2018). Moreover, it has not disclosedthe dividend amount and there is potential change in the structure of creditors of the organisation,as Fonterra was granted with additional privileges along with obtaining rights in terminating itscontract with Bellamy’s in the event of a change of control. Moreover, the rising costs of organic ingredients have contributed to declining marginsand Bellamy’s is burdened with above $100 million in inventory. However, one small benefit isthat the shelf life associated with the infant formula is 2-3 years and this avoids the needs ofwriting down and disposal of inventory in the next few months. In the long-run, this could benecessary still; in case, Bellamy’s is not able to transfer its obsolete inventory. Answer to Question 2:According to the annual report of Bellamy’s Australia Limited, the organisation has notstated goodwill in its financial statements. However, it had some major acquisitions related tosegmental assets in 2016. These acquisitions comprise of $719,000 in Australia, $8,000 in EastAsia and $25,000 combined in Hong Kong and China. The balance sheet statement of theorganisation states that it has $32,295,000 in cash and cash equivalents in 2016 in contrast to$32,035,000 in 2015 (Lattin, Lam and Hunt 2017). Hence, a slight rise in cash position could beviewed in 2016 in contrast to 2015.
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3THE ROLE OF THE CONTINUOUS DISCLOSURE FRAMEWORKAnswer to Question 3:The income statement of Bellamy’s Australia Limited depicts the falling profit level forthe organisation to $91,521,000 in 2017 from $101,228,000 in 2016. The situation has worsenedat the time the organisation has experienced net loss of $809,000 in 2017, while it has made netincome of $38,328,000 in 2016. Moreover, the asset impairment loss of Bellamy’s has been$424,000 in 2017 in contrast to $36,000 in 2016. Furthermore, the organisation has encountereda rise in administration and other expenses from 2016 to 2017. The organisation has beenexperiencing trading halt of its shares in the form of Certification and AccreditationAdministration of the People’s Republic of China (CNCA). This is because it has suspended thebusiness license of exporting milk formula from the Melbourne plant. This specific aspect hasdirect impact on the financial position of the organisation because of the halt in trading of shares.Finally, CNCAS has suspended the license of milk export from the Melbourne plant of theorganisation (White 2017). Answer to Question 4:Based on the above discussion, it could be viewed that the financial condition ofBellamy’s Australia Limited has declined in the year 2017. The suspension of shares and tradinghalt has exercised main negative effect on the financial condition of the organisation. Due to allsuch aspects, the organisation has to incur main losses in 2017 (Legg 2017). In this condition, itis suggested to the clients to sell the shares of Bellamy’s Australia Limited.
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