Comprehensive Financial and Accounting Report: AGL Company Analysis

This report provides a comprehensive analysis of AGL Energy Limited (AGL), an Australian-based public company in the energy utilities industry. The report begins with an introduction to corporate accounting and provides an overview of AGL's business operations, including its generation and retailing of electricity and gas for commercial and residential use. It details AGL's business segments, key functions, and activities, as well as its position within the energy utilities industry, including its competitors and their operations. The report then delves into AGL's financial structure, examining its sources of funds and the proportion of debt versus equity. A significant portion of the report is dedicated to analyzing key elements from AGL's annual reports, including gross profit, net income, and asset and liability values. It also explores changes in accounting policies, the carrying amount of property, plant, and equipment, and the company's accounting policies for these assets. The report further identifies and analyzes AGL's intangible assets and related accounting policies. Finally, it addresses impaired items of property, equipment, plant, and intangible assets, and concludes by summarizing the key findings regarding AGL's financial performance and position. The report is supported by references to relevant academic sources.

CORPORATE
ACCOUNTING

INTRODUCTION
Corporate accounting is the accounting which generally deals in doing accounting for
the comapnies,whih includes preparing of the final accounts and income statements, analysis and
interpretation of the financial results of companies and accounting for the specific events which
includes amalgamation, absorption.
The present study is about the company named AGL which is the producer of the
electricity and gas in the industry of energy utilities focusing on producing and distributing the
electricity and gas to the commercial areas and residential .it is Australian based company .
The report will contain the brief introduction of the company, its annual reports and financial
statements which generally includes the cash flow, income statement (P&L account) and Balance
sheet which carries the amount of the different elements of the company which will helps to
understand the different key elements and accounting policies of the company and the carrying
amount of the different elements
1 Company's business with detail of different functions and activities and different segment of
business.
AGL energy limited is an public company in Australia which deals in the generation and
retailing business of electricity and gas for commercial use and residential .They generate the
energy from the power stations which use the thermal power, natural gas, hydroelectricity, wind
power, energy using solar pannels, gas storage and coal seam gas sources(Watson,2015). They
also provide service which includes Electricity generation, electricity distribution,Electricity
retailing and natural gas retailing and distribution. The Australian gas light company was formed
in Sydney in 1837(Suzuki,2015).
They gradually diversified their activities into electricity to number of different
locations. they entered the gas market of residential and commercial of Australia. Schaltegger,
Burritt & Petersen, 2017). they focusing into different project which includes power generation
projects in development, power Australian Renewable fund, upstream gas projects, renewable
energy and many hi helps them to expand their market share and able to achieve their
organisation goal effectively and efficiently.

The company basically operate their functions in the four segments:
 customer Markets
 wholesale Markets
 group operations and
 Investment segment(Maas, Schaltegger & Crutzen, 2016)
They dealt in generation of electricity using thermal, hydro , solar power generations and wind .
Activities related top Gas storage and retail sale of electricity , gas, energy and solar products
and services are the core business activities performed by the AGL. They operate electricity
generation portfolio of around 10245 megawatts(Liu, Li, Zeng & An, 2017).
2 Industry of the company operations and discussion of the implication of the different factors
including its competitors and their operations.
Australian Gas light company involve in producing and retailing of the electricity and gas
for the commercial use and residential use. company operates in the Energy utilities industry
which is rising greatly(Ijiri, 2018). This industry is basically deals in the generating and sale of
energy which includes the extracting the fuel, manufacturing, refining and distribution .this
sector is useful for the organisation operating in particular sector as it provides regular profit
and dividends to shareholders making long term investments and dividend are usually higher that
those of which are paid by other stocks.
Utility sector has intense regulatory bodies since hey providing the basic needs of civil
society. this sector offers stable, long term investment with regular ad attractive dividends,
utilities offering many options for investment which includes ETF's, individual company stock,
bonds, etc(Guenther & et.al., 2015).
The utilities sector might follow the major trends which help in driving the industry in
growth path that is by Disruptive innovation and technologies, shift towards decentralization
relentless focus on the efficiency, global decarbonization drive can lead to the industry towards
the future success, growth and development. AGL has many competitors in the industry and one
of the tough competitor is Alinta energy which is also an electricity generating company

headquartered in Sydney, Australia. they provide natural gas and electricity and has contracted
generation portfolio of up to 1957 MW which is approx 800000 combines electricity and gas
retail customers (Burritt & Christ, 2017).
Company's source of funds and analysing the financial structure of the company
Company fund themselves by using both internal as well as external sources but they
varies in the ratio. External source is generally preferable by the company as debt is the cheaper
source of finance compare to the equity as cost of equity is generally high compared to the cots
of debt.
Financial structure basically refers to the difference between all the equities of the
company's and liabilities(Bhasin, 2015). Which considered the all the liabilities and equities side
of the balance sheet .According to evidences, the company's financial structure is having higher
proportion of debt compared to equities as AGL having $28, 598 million of liabilities which
showing the external liabilities for which company needs to pay and some portion with the
equity that is of $ 23, 598 million which representing that company has more dependencies on
external source of finance that is debt financing.
3 Key elements in annual reports for the financial performance which is reported by the
company
AGL annual reports predict the performance and financial postilion of the company
which helps to communicate the financial information to its users. There are different elements
of financial performance which helps to recognise the company's position.
The company's Gross profit is $11755 M and Net income is $3549 which is somewhere
higher compared with the previous year(Balakrishnan, Watts & Zuo, 2016). AGL having total
current assets of $13312M and non currents assets with 38884 which includes intangible assets,
income taxes (deferred ) and other long term assets. they holding current liabilities of $6836M
and current liabilities of $21762M .that is total assets is equal to $52196M and total liabilities
$28598M which shows the improved efficiency of the organisation and company having enough
resources to fulfil their obligations. Shareholder's equity is showing amount of $23598M that is
total of liabilities and shareholder equity is the capital and financial structure of the
company(Atanasov & Black, 2016).

4 Change in the accounting policies which mentioned in the annual report
AGL focuses on finding and evaluating the financial impact of the adapting the credit
loss(expected) model and also refining hedge accounting pooches so to follow with the
requirements of AASB 9. the assumptions are made by the company on the basis of the
historical vents so that another accounting policies can be adopted or accepted for effective
performance of the company activities(Agrawal & Cooper, .2017).
The changing accounting policies may related to the unbilled revenue, unblled
distribution cots, advance for the doubt full debts, define benefit superannuation. deferred tax
assets relates to the losses, provision for environmental restoration(Watson,2015). According to
the annual reports there is no change made in the accounting policies yet by the assumption are
made for changing in the near future to provide the effective result of the activities in the
organisation.
5 carrying amount of the property, plant and equipment of company
The company's carrying amount means measuring the value where the value of the asset
and company relies on the figures of the balance sheet of company(Guenther & et.al., 2015).
AGL's carrying amount of the property, plant and equipment is equal to $30, 898 million which
presents the company has invested this much amount in ascertaining these assets and this amount
is arrived after the deduction of the accumulated depreciation that is :
 carrying cost is =Gross property,equipment and plant -Accumulated depreciation
where
 Gross is$ 63279 -$32381 M which is equal to 30, 898.
6 Accounting policies of property, equipment and plant adopted by the company
Property, equipment and plant can be measured at the cost minus accumulated
depreciation and impairment losses(accumulated ). where cost involves the expenses which is
completely related to the construction of the asset(Schaltegger, Burritt & Petersen, 2017).
Finance cost relates to acquisition of qualifying assets are capitalises.
Cost might includes transfers from other income of any profit or loss in qualifying cash
flow hedges of the foreign currency purchase of plant, property and equipment.

Subsequent costs are than capitalised when the probability of future economic befits associate
with the item which will flow in AGL and costs of the items is measurable reliably. other cots
can ascertain in the profit or loss as and when they incurred.
The gain or loss which arise on disposal recognised in the profit or loss. Depreciation
can be calculated on the basis of straight line method to written off costs of each and every asset
overt its useful expected life to ascertain the residual value(Suzuki,2015). Leasehold
improvement are amortised over the period of lease over its useful life whichever is less,Land is
not depreciated.
Estimate useful life, depreciation method and residual values are monitored as appropriate at the
end of each annual period. there are some estimated live which can be used in the calculating the
depreciation and they are ;
 Freehold building- 50 years
 Improvements in Leasehold- 20 years of lease period whichever is less
 plant and equipment-3 to 35 years(Agrawal & Cooper, .2017).
7 Identifying the intangible assets by the company and the composition of company's business
AGL having the value of the intangible assets in their balance sheet as $1111 M and
goodwill amounted to be $1976 M which is the value of its company's intangible assets .the
company has also invested higher amount of money into the acquisition of the intangible
assets(Maas, Schaltegger & Crutzen, 2016). They contributed to amount of $3087 M in the total
assets of the company which helps in increasing the assets side showing the strong financial
position of the company which will leads the company in their future growth and development.
8 accounting policies related to intangible assets which adopted by the company
Intangible assets are purchased separately by the business and initially can measured at
cost. The cost of the intangible assets is on fair value at the date of depreciation(Bhasin, 2015).
Following the initial cost of the intangible assets which are carried at cost less accumulated
amortisation and accumulates impairment losses if any.
Useful life of the intangible assets ate associate to be finite or indefinite as indefinite
intangible assets are assesses at least annually for the impairment. Whereas finite intangible
assets are amortised over their estimated useful life(Balakrishnan, Watts & Zuo, 2016) .

Estimated useful life and amortisation method are reviewed and monitored at end of the
each annual reporting period. These useful estimated life is used in the amortisation for the
intangible assets with those having the finite lives:
Customer relationships and contrasts -3 to 20 years.
Intangible assets can recognized on disposal and when the no economic benefits are
expected from the use or disposal. Then gains or losses from the de recognition of the intangible
assets are recognised in the profit or loss as and when the assets is de recognized(Agrawal &
Cooper, .2017).
9 Identification of Impaired items of property , equipment and plant,and intangible assets and
the amount of accumulated impairment losses
Impaired asset is the asset of the company which has the lower market price than book
value in the balance sheet of the company. Accounts which need to written down are the
company's goodwill, account receivable and the long term assets as carrying value having longer
span of time for the impairment(Guenther & et.al., 2015). accorfing to the annual report so the
AGL company they are not having an item of property , equipment and plant and intangible
assets which are impaired.
CONCLUSION
From above report it is being concluded that the energy utility industry has major
growth and hold of the customers as they are providing the utilities to the people which are
essential for living the life. The information about the annual reports and the key elements of the
balance sheet and accounting policies are explained above,
The report also concluded about the AGL company which is electricity and gas producer
and distributor and their reports which help to identify their financial performance and position
of the business.

2REFERENCES