Financial Accounting: CSR and its Impact on Pewter Ltd's Accounts
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This report provides accounting advice to the Board of Directors of Pewter Ltd regarding the financial implications of their Corporate Social Responsibility (CSR) activities, specifically concerning environmental concerns and the Steve Irwin Ship. The analysis covers the impact of CSR on the profit or loss statement and the statement of financial position, referencing AASB 137 and IAS37. It details how expenses related to CSR should be treated and discusses the potential for increased revenue and goodwill resulting from these activities. The report includes illustrative examples to demonstrate the financial impact of CSR initiatives on Pewter Ltd's accounts, emphasizing the importance of balancing environmental responsibility with financial performance. The document is available on Desklib, a platform providing study tools for students.
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FINANCIAL ACCOUNTING
A LETTER OF ADVICE AND CLARITY TO THE BOARD OF DIRECTORS OF PEWTER
LTD ON ACCOUNTING ISSUES IN QUERRY
Name
Course:
Professor’s Name
Institution
City
Date
A LETTER OF ADVICE AND CLARITY TO THE BOARD OF DIRECTORS OF PEWTER
LTD ON ACCOUNTING ISSUES IN QUERRY
Name
Course:
Professor’s Name
Institution
City
Date
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FINANCIAL ACCOUNTING
Table of Contents;
Title and topics………………………………………….Page1
Name of student and professor…………………………Page1
Date, course and institution……………………………..Page1
Table of content…………………………………………Page2
Letter…………………………………………………….Page2
Letter…………………………………………………….Page3
Letter…………………………………………………….Page4
Detailed Explanation, illustration and explanation………Page4
Detailed Explanation, illustration and explanation………Page5
Detailed Explanation, illustration and explanation………Page6
Detailed Explanation, illustration and explanation………Page7
References………………………………………………...Page8
From: The Accounting Manager,
McKenzie and Associates,
Ms. Maria McKenzie,
Melbourne VIC 3000, 668 George Street,
8Th July 2018.
To: The Board of Directors,
C/o Con Pewter MD for,
Pewter Ltd, Level 6,510,
King William Street, Adelaide SA 5000.
Table of Contents;
Title and topics………………………………………….Page1
Name of student and professor…………………………Page1
Date, course and institution……………………………..Page1
Table of content…………………………………………Page2
Letter…………………………………………………….Page2
Letter…………………………………………………….Page3
Letter…………………………………………………….Page4
Detailed Explanation, illustration and explanation………Page4
Detailed Explanation, illustration and explanation………Page5
Detailed Explanation, illustration and explanation………Page6
Detailed Explanation, illustration and explanation………Page7
References………………………………………………...Page8
From: The Accounting Manager,
McKenzie and Associates,
Ms. Maria McKenzie,
Melbourne VIC 3000, 668 George Street,
8Th July 2018.
To: The Board of Directors,
C/o Con Pewter MD for,
Pewter Ltd, Level 6,510,
King William Street, Adelaide SA 5000.

FINANCIAL ACCOUNTING
REF: AN ACCOUNTING BUSINESS LETTER OF ADVICE TO THE BOARD OF
DIRECTORS OF PEWTER LTD REGARDING ENVIRONMENTAL CONCERNS STEVE
IRWIN SHIP IS GOING THROUGH TO SAFEGUARD THE GOODWILL OF FISHING.
Dear Sir/Madam,
First and foremost, on behalf of Mackenzie and Associates firm, I wish to express my
sincere appreciation for the excellent work relationship we have had over the last two years and
hence hereby wish to advise Pewter Ltd board of directors as follow;
Regarding the issue raised by the marketing manager on the sea fishing environmental
concern as well as on accounting cost perspective, I wish to advise the board that the action of
safeguarding the interest of the sea environment is of very great help to the company because it
is adding value to the corporate social responsibility rapport as well as increase in profitability
index and net asset increase in totality.
Pewter Ltd net asset is seen to increase since the CSR helps and lobby’s customers and
peoples at large to trust the company activities hence creating goodwill of business. Regarding
the profit or loss statement I wish to state that the act of repairing Steve Irwin directly affects this
accounts since indeed the cost is to be charged to a CSR expense account. Consequently, it is
expected that revenue will grow now that goodwill of business has developed between Pewter
Ltd and its client.
With the above positive set up on net asset, profitability index and goodwill, I therefore
partly agree with the marketing manager that it will be a win-win aspect depending on the
average outcome performance of CSR thus advise the board to firmly have a look of the below
analysis as illustrated and buy the idea of the marketing manager since it is adding value to
Pewter Ltd and most of all it helps them curb tax burden since CSR cost relieves tax burden as a
tool of fighting competition.
REF: AN ACCOUNTING BUSINESS LETTER OF ADVICE TO THE BOARD OF
DIRECTORS OF PEWTER LTD REGARDING ENVIRONMENTAL CONCERNS STEVE
IRWIN SHIP IS GOING THROUGH TO SAFEGUARD THE GOODWILL OF FISHING.
Dear Sir/Madam,
First and foremost, on behalf of Mackenzie and Associates firm, I wish to express my
sincere appreciation for the excellent work relationship we have had over the last two years and
hence hereby wish to advise Pewter Ltd board of directors as follow;
Regarding the issue raised by the marketing manager on the sea fishing environmental
concern as well as on accounting cost perspective, I wish to advise the board that the action of
safeguarding the interest of the sea environment is of very great help to the company because it
is adding value to the corporate social responsibility rapport as well as increase in profitability
index and net asset increase in totality.
Pewter Ltd net asset is seen to increase since the CSR helps and lobby’s customers and
peoples at large to trust the company activities hence creating goodwill of business. Regarding
the profit or loss statement I wish to state that the act of repairing Steve Irwin directly affects this
accounts since indeed the cost is to be charged to a CSR expense account. Consequently, it is
expected that revenue will grow now that goodwill of business has developed between Pewter
Ltd and its client.
With the above positive set up on net asset, profitability index and goodwill, I therefore
partly agree with the marketing manager that it will be a win-win aspect depending on the
average outcome performance of CSR thus advise the board to firmly have a look of the below
analysis as illustrated and buy the idea of the marketing manager since it is adding value to
Pewter Ltd and most of all it helps them curb tax burden since CSR cost relieves tax burden as a
tool of fighting competition.

FINANCIAL ACCOUNTING
Thank you in advance.
Yours’ Sincerely,
Ms. Maria McKenzie.
Detailed Explanation, illustration and explanation;
Pewter Ltd has had rescue operations that have been happening in the sea, and indeed
whose concern significantly was to ensure that the Japan Whalers, as well as another form of
enemies, are barred from destroying fishing and the whole sea fauna through the use of Steve
Irwin Ship owned by Pewter Ltd. Ideally in a nutshell if I was to be asked I feel this action of
safeguarding and protecting the sea environment to me is a sense of corporate social
responsibility(CSR), Galbreath(2010.Pg 425) though this time round to the parties linked to the
sea and of course sea animals.
I, therefore, will be addressing this issue as an aspect of CSR. Australian Company Act
defines this as the balancing of the activities of the company with the environment it is operating
as explained in an Australian Parliamentary Joint Committee that sat in 2006(PJC 2006). This
PJC 2006, explained that by doing CSR as is in the case of Pewter Ltd whereby it is safeguarding
the seas fauna as it did to Dolphin and now chasing the Japanese Whalers from harming the sea
Mallin (2009. Pg.12) is an aspect that creates marketing and holding competitiveness an aspect
that of course at some point improves profitability since everybody will be willing to be
associated with a company that has a good rapport with the environment.
Likewise, by spending on this CSR, it is going to put the Pewter Ltd in business since it
will be protecting and mitigating risks relating to a territory whose business operates as described
in PJC 2006 hence an aspect that helps them be in business hence the creation of profitability
Thank you in advance.
Yours’ Sincerely,
Ms. Maria McKenzie.
Detailed Explanation, illustration and explanation;
Pewter Ltd has had rescue operations that have been happening in the sea, and indeed
whose concern significantly was to ensure that the Japan Whalers, as well as another form of
enemies, are barred from destroying fishing and the whole sea fauna through the use of Steve
Irwin Ship owned by Pewter Ltd. Ideally in a nutshell if I was to be asked I feel this action of
safeguarding and protecting the sea environment to me is a sense of corporate social
responsibility(CSR), Galbreath(2010.Pg 425) though this time round to the parties linked to the
sea and of course sea animals.
I, therefore, will be addressing this issue as an aspect of CSR. Australian Company Act
defines this as the balancing of the activities of the company with the environment it is operating
as explained in an Australian Parliamentary Joint Committee that sat in 2006(PJC 2006). This
PJC 2006, explained that by doing CSR as is in the case of Pewter Ltd whereby it is safeguarding
the seas fauna as it did to Dolphin and now chasing the Japanese Whalers from harming the sea
Mallin (2009. Pg.12) is an aspect that creates marketing and holding competitiveness an aspect
that of course at some point improves profitability since everybody will be willing to be
associated with a company that has a good rapport with the environment.
Likewise, by spending on this CSR, it is going to put the Pewter Ltd in business since it
will be protecting and mitigating risks relating to a territory whose business operates as described
in PJC 2006 hence an aspect that helps them be in business hence the creation of profitability
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FINANCIAL ACCOUNTING
aspect in it. According to Hill & Knowltown 2006 case by investing in CSR in one way or the
other, there is an equivalent return that is balanced to the company’s performance.
According to AASB 137 and IAS37, all expenses that are deemed relative to Corporate
Social Responsibility should be expensed in the profit or loss account similarly to the revenue or
asset that would be generated from the CSR Truscott, Bartlett, and Tywoniak (2009. Pg.90.)
The same regulations state that there should be no provision or insurance fee that should
be placed instead of catering for the cost relating to CSR Rao and Tilt (2016. Pg.82.)
Going with the above law and now that we have termed the act of Steve Irwin safeguarding the
sea environment from destruction of Japanese Whalers as well as any other proxy predator as
CSR Evans and Sawyer (2010.Pg 430), Pewter Ltd has no option rather than expensing any
expenditure whether incurred or to be incurred relative to Steve Irwin operation in the profit and
loss account of Pewter Ltd as a debit balance in the CSR general ledger.
Since the expense relating to Steve Irwin reduces the profit, in this case it is believed that the
activity of safeguarding the interest in the sea as a plus to Pewter Ltd as it was seen in the
previous activity of safeguarding the Dolphin that made them retain business Lundgren (2007.Pg
12), hence this activity is believed to help them curb competition create good rapport and of
course win them an aspect of goodwill of which to them is an asset in the statement of financial
position Overland (2014.Pg 140).
It is therefore clear that AASB 137 bars the company from accounting for repair cost as
carrying amount since the cost resulted from the act of CSR, Tilt (2009. Pg.31) hence I disagree
with the marketing manager on this similarly to where the cost should be expensed I likewise
disagree with this because the cost should not be expensed as a marketing tool since the cost was
incurred for CSR activity.
aspect in it. According to Hill & Knowltown 2006 case by investing in CSR in one way or the
other, there is an equivalent return that is balanced to the company’s performance.
According to AASB 137 and IAS37, all expenses that are deemed relative to Corporate
Social Responsibility should be expensed in the profit or loss account similarly to the revenue or
asset that would be generated from the CSR Truscott, Bartlett, and Tywoniak (2009. Pg.90.)
The same regulations state that there should be no provision or insurance fee that should
be placed instead of catering for the cost relating to CSR Rao and Tilt (2016. Pg.82.)
Going with the above law and now that we have termed the act of Steve Irwin safeguarding the
sea environment from destruction of Japanese Whalers as well as any other proxy predator as
CSR Evans and Sawyer (2010.Pg 430), Pewter Ltd has no option rather than expensing any
expenditure whether incurred or to be incurred relative to Steve Irwin operation in the profit and
loss account of Pewter Ltd as a debit balance in the CSR general ledger.
Since the expense relating to Steve Irwin reduces the profit, in this case it is believed that the
activity of safeguarding the interest in the sea as a plus to Pewter Ltd as it was seen in the
previous activity of safeguarding the Dolphin that made them retain business Lundgren (2007.Pg
12), hence this activity is believed to help them curb competition create good rapport and of
course win them an aspect of goodwill of which to them is an asset in the statement of financial
position Overland (2014.Pg 140).
It is therefore clear that AASB 137 bars the company from accounting for repair cost as
carrying amount since the cost resulted from the act of CSR, Tilt (2009. Pg.31) hence I disagree
with the marketing manager on this similarly to where the cost should be expensed I likewise
disagree with this because the cost should not be expensed as a marketing tool since the cost was
incurred for CSR activity.

FINANCIAL ACCOUNTING
Concerning the net asset position, I wish to say that the increase is only possible if indeed
the CSR will win the interest of customers to a point where they reciprocate back to business
hence earning them goodwill that forms part of the financial position in debt. However, it
likewise adds value back to business since they can control business hence goodwill is created
that forms part of the asset of Pewter Ltd Golob and Bartlett (2007. Pg.7.)
Illustration;
Regarding the statement of profit or loss account I wish to say the net effect depends with the
business in the sense that;
Assuming Pewter use to make Revenue of $256200 Million in FY 2016 and then after
this CSR it makes Revenue of 260250Million with a CSR cost of $20Million’. Going with this
the calculation of the profit or loss in this two scenario will be;
Pewter Ltd Profit or Loss A/c
Before CSR; After CSR
Revenue; $256200 $280250
Less Expenses;
Administration $200 $200
Cost Of Sales $152000 $162500
CSR 0 $10000
Total Expenses ($152200) ($172700)
Profit $104000 $107550
This shows that there should be an increase or decrease in profit or loss depending on the effect
of Corporate Social Responsibility on business. Similarly, it should be known that the effect of
profit or loss account likewise affects the financial position since the account of retained earnings
is affected by the change in profit or loss account.
Concerning the net asset position, I wish to say that the increase is only possible if indeed
the CSR will win the interest of customers to a point where they reciprocate back to business
hence earning them goodwill that forms part of the financial position in debt. However, it
likewise adds value back to business since they can control business hence goodwill is created
that forms part of the asset of Pewter Ltd Golob and Bartlett (2007. Pg.7.)
Illustration;
Regarding the statement of profit or loss account I wish to say the net effect depends with the
business in the sense that;
Assuming Pewter use to make Revenue of $256200 Million in FY 2016 and then after
this CSR it makes Revenue of 260250Million with a CSR cost of $20Million’. Going with this
the calculation of the profit or loss in this two scenario will be;
Pewter Ltd Profit or Loss A/c
Before CSR; After CSR
Revenue; $256200 $280250
Less Expenses;
Administration $200 $200
Cost Of Sales $152000 $162500
CSR 0 $10000
Total Expenses ($152200) ($172700)
Profit $104000 $107550
This shows that there should be an increase or decrease in profit or loss depending on the effect
of Corporate Social Responsibility on business. Similarly, it should be known that the effect of
profit or loss account likewise affects the financial position since the account of retained earnings
is affected by the change in profit or loss account.

FINANCIAL ACCOUNTING
Effect on Financial Position;
Assuming that Pewter Ltd Financial Position appears as shown below after CSR of protecting the
sea environment earns them goodwill of $100,000;
Fixed Asset;
Before CSR; $ After CSR $
Land 2000000 2000000
PPE 600000 600000
Goodwill 65000 165000
Total Fixed Asset 2665000 2765000
The $100000 goodwill from CSR increases the asset of Pewter Ltd.
Effect on Financial Position;
Assuming that Pewter Ltd Financial Position appears as shown below after CSR of protecting the
sea environment earns them goodwill of $100,000;
Fixed Asset;
Before CSR; $ After CSR $
Land 2000000 2000000
PPE 600000 600000
Goodwill 65000 165000
Total Fixed Asset 2665000 2765000
The $100000 goodwill from CSR increases the asset of Pewter Ltd.
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FINANCIAL ACCOUNTING
References
Evans, N. and Sawyer, J., 2010. CSR and stakeholders of small businesses in regional South
Australia. Social Responsibility Journal, 6(3), pp.433-451.
Galbreath, J., 2010. How does corporate social responsibility benefit firms? Evidence from
Australia. European Business Review, 22(4), pp.411-431.
Golob, U. and Bartlett, J.L., 2007. Communicating about corporate social responsibility: A
comparative study of CSR reporting in Australia and Slovenia. Public relations review,33(1),
pp.1-9.
Hill and Knowlton 2006, Return on Reputation: Corporate Reputation Watch 2006, March,
Lundgren, T., 2007. On the economics of corporate social responsibility. Sustainable Investment
and Corporate Governance Working Papers, 3.
Mallin, C.A. ed., 2009. Corporate social responsibility: A case study approach. Edward Elgar
Publishing.
New York.
Overland, J., 2014. Corporate Social Responsibility Reporting and Directors’ Duties: The
Australian Experience. In Corporate Social Responsibility in the Global Business World (pp.
135-152). Springer, Berlin, Heidelberg.
Rao, K. and Tilt, C., 2016. Board diversity and CSR reporting: An Australian study. Meditari
Accountancy Research, 24(2), pp.182-210.
Tilt, C.A., 2009. Corporate responsibility, accounting and accountants. In Professionals'
perspectives of corporate social responsibility (pp. 11-32). Springer, Berlin, Heidelberg.
Truscott, R.A., Bartlett, J.L. and Tywoniak, S.A., 2009. The reputation of the corporate social
responsibility industry in Australia. Australasian Marketing Journal (AMJ), 17(2), pp.84-91.
References
Evans, N. and Sawyer, J., 2010. CSR and stakeholders of small businesses in regional South
Australia. Social Responsibility Journal, 6(3), pp.433-451.
Galbreath, J., 2010. How does corporate social responsibility benefit firms? Evidence from
Australia. European Business Review, 22(4), pp.411-431.
Golob, U. and Bartlett, J.L., 2007. Communicating about corporate social responsibility: A
comparative study of CSR reporting in Australia and Slovenia. Public relations review,33(1),
pp.1-9.
Hill and Knowlton 2006, Return on Reputation: Corporate Reputation Watch 2006, March,
Lundgren, T., 2007. On the economics of corporate social responsibility. Sustainable Investment
and Corporate Governance Working Papers, 3.
Mallin, C.A. ed., 2009. Corporate social responsibility: A case study approach. Edward Elgar
Publishing.
New York.
Overland, J., 2014. Corporate Social Responsibility Reporting and Directors’ Duties: The
Australian Experience. In Corporate Social Responsibility in the Global Business World (pp.
135-152). Springer, Berlin, Heidelberg.
Rao, K. and Tilt, C., 2016. Board diversity and CSR reporting: An Australian study. Meditari
Accountancy Research, 24(2), pp.182-210.
Tilt, C.A., 2009. Corporate responsibility, accounting and accountants. In Professionals'
perspectives of corporate social responsibility (pp. 11-32). Springer, Berlin, Heidelberg.
Truscott, R.A., Bartlett, J.L. and Tywoniak, S.A., 2009. The reputation of the corporate social
responsibility industry in Australia. Australasian Marketing Journal (AMJ), 17(2), pp.84-91.
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