Financial Accounting 2 Report: AASB Updates and Financials Analysis

This financial accounting report analyzes updates from the Australian Accounting Standards Board (AASB) between May and August 2017, including changes to superannuation plans, tax liability declarations, and transparency in annual reports. The report also examines the impact on insurance contracts and property, plant, and equipment. Furthermore, the report presents a balance sheet for Winter Limited for the year ended June 30, 2017, detailing assets, liabilities, and equity. Key assets include goodwill, plant and equipment, land, and various current assets like accounts receivable, cash, and inventories. Liabilities and equity encompass shareholders' funds, non-current liabilities such as debentures and provisions, and current liabilities including interest payable and accounts payable. The report references AASB news sources and a financial accounting textbook.

Running Head: FINANCIAL ACCOUNTING
Financial Accounting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

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FINANCIAL ACCOUNTING
QUESTION 1 (NEWSLETTER)
IDENTIFYING THE CHANGES MADE DURING MAY 2017 TO AUGUST
2017, IN THE ACCOUNTING STANDARD
AUSTRALIAN
ERA END (29-07-17)
AASB has mainly
suspended the AAS 25,
where companies were
able to use
superannuation plans in
the financial reporting.
This closure is mainly
conducted from the next
financial year, where
companies were not
allowed to use the AAS
25 in their financial
report.
Strategy of AASB (28-07-
16)
AASB has mainly
proposed the overall
strategy for the business
from 2017 to 2021, where
individuals are allowed to
comment on the standard
of the strategy. From this
AASB will mainly be
able to identify the
relevant impact of the
strategy on the overall
performance of the
organisation.
Declaration of tax
liability by more
organisations (04-07-
2017)
Relevant amendments is
been conducted by
AASB, where tax
authority will have full
knowledge of the overall
facts about the tax
position of an
organisation.
Furthermore, it is also
stated that the estimated
tax liability amount does
not have to be included in
the balance sheet
statement that is prepared
by the company.
Portraying transparency
in the annual report (20-
07-2017)
AASB has mainly
mandated that all the
public section companies
needs to disclose all the
relevant liabilities and
assets in the financial
report. This could mainly
help in generating the
relevant reliability and
accountability of the
organisation in the eyes
of investors.
TAX
TRANSPARENCY BY
AASB (16-05-17)
AASB mainly provided
relevant information on the
overall tax position of an
organisation for
international investors,
which coil directly help in
understanding the overall
tax potions of the company.
Global disclosure practise is
mainly used by ASIC
regarding non-GAAP,
where relevant disclosure is
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FINANCIAL ACCOUNTING
been provided from ETR
depending on the corporate
tax of an organisation.
AASB directly provides
relevant disclosure
regarding the guidance of
ETR, which could be
understood by the
international investors.
IMPACT ON THE
INSURANCE
CONTRACTS (18-05-
2017)
AASB in accordance with
the IFRS 17 has mainly
mandated that the global
insures will not be
allowed to use historical
cost in their financial
report. This has mainly
forced the organisation to
recognise losses before
hand, which could help in
strengthening the impact
of the financial report.
ED 280- PROPERTY,
PLANT AND
EQUIPMENT (18-05-
2017)
There are relevant
amendments that is
conducted on the AASB
116, where proposal is
been made for the plant,
property and equipment.
The proposal directly
stated that the proceeds
from selling the produce
of plant, property and
equipment is mainly
capable of including in
the operating section. For
example, the testing face
of the machine and the
profit provided could be
included in the profit and
loss account, where it
needed not be subtracted
from the asset cost.
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FINANCIAL ACCOUNTING
Question 2: Financial statement presentation (Balance Sheet)
In the books of Winter Limited for the year ended 30th June 2017
Particulars Amount (in $) Amount (in $)
Assets:
Non-current assets:
Goodwill $ 68,300
Plant and equipment $ 652,200
Less: Accumulated depreciation $ 104,300 $ 547,900
Land $ 1,100,000
Current assets:
Accounts receivable $ 123,900
Less: Allowance for doubtful debts $ 14,600 $ 109,300
Cash at bank $ 18,200
Cash management account $ 150,000 $ 168,200
Inventories $ 212,400
Raw materials $ 100,500 $ 312,900
Prepaid rent $ 13,600
Loan receivable $ 60,000
Interest receivable $ 6,700
Non-current investments:
Investment property $ 614,000
Total $ 3,000,900
Equity and liabilities:
Shareholders' funds:
General reserve $ 276,800
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FINANCIAL ACCOUNTING
Retained earnings $ 873,300
Share capital $ 500,000
Non-current liabilities:
Debentures $ 600,000
Provision for warranty $ 17,000
Less: Repayable in a year $ 5,000 $ 12,000
Provision for long service leave $ 27,000
Less: Repayable in a year $ 8,000 $ 19,000
Provision for annual leave $ 36,000
Less: Repayable in a year $ 19,000 $ 17,000
Bank loan $ 500,000
Current liabilities and provisions:
Interest payable $ 8,300
Accrued wages payable $ 8,200
Dividends payable $ 45,000
Current tax liability $ 33,500
Accounts payable $ 75,800
Add: Provisions repayable $ 32,000 $ 107,800
Total $ 3,000,900
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FINANCIAL ACCOUNTING
BIBLIOGRAPHIES:
News. (2017). Aasb.gov.au. Retrieved 27 August 2017, from
http://www.aasb.gov.au/News.aspx
Weil, R. L., Schipper, K., & Francis, J. (2013). Financial accounting: an introduction to
concepts, methods and uses. Cengage Learning.
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