Detailed Analysis of Accounting Items in AMP Limited Annual Report

This report provides an analysis of the annual report of AMP Limited, focusing on key accounting items such as accounts receivable and accounts payable. It examines the values of these items for the years 2015 and 2016, highlighting their significance in assessing the company's financial health and operational efficiency. The report delves into the importance of these accounting elements within the annual report, explaining how they reflect the company's ability to manage its current assets and obligations, and their impact on financial decision-making. Furthermore, the report explores the social implications of these accounting items, considering how they affect the company's reputation and stakeholder trust. The reflection section summarizes the key components of the annual report and its audit, offering insights into the company's financial reporting practices and compliance with accounting standards. The report is supported by references to relevant literature.

Accounting and financial management
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Table of Contents
Task two.....................................................................................................................................3
1. Accounting items from annual report of AMP Limited..................................................3
2. Importance of accounting items in annual report............................................................3
3. Social impact of accounting items..................................................................................4
4. Reflection on the annual report of AMP Limited...........................................................4
Reference....................................................................................................................................6

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Task two
1. Accounting items from annual report of AMP Limited
Account receivables – from the annual report of the company, it is identified that the account
receivable for the year ended 31st December 2016 was amounted to $ 1,975 million as
compared to $ 2,067 million for the year ended 31st December 2015. The company’s
receivable are mainly from two sources, that is from the investments and from the premiums
of life insurance contract (Mathuva 2015). The receivables are measured at the fair values
through the profit and loss. Further, the re-insurance and the other recoveries discounted to
the present value. Any receivable apart from these two sources are measured at the nominal
values.
Account payable - from the annual report of the company, it is identified that the account
payable for the year ended 31st December 2016 was recorded for $ 1,952 million as compared
to $ 2,031 million for the year ended 31st December 2015 (Hoskin, Fizzell and Cherry 2014).
The payables of the company are accounted for at nominal amount for the payables. With
respect to the short term nature for most of the payables, nominal values of the payables are
approximately same with the fair value.
2. Importance of accounting items in annual report
Account receivable – the receivables under the balance sheet represent the amount of money
that the customer owe for the services or goods that already provided by the company.
However, as the money is expected to be received in future, it is shown as receivables. The
receivables form an important part of the current asset of the company that help in measuring
the efficiency of the company with regard to payment of its current obligation (Weygandt,
Kimmel and Kieso 2015). Further, the accounts receivable represents whether the company is

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efficient in collecting their dues or not. Further, the receivables assist in forecasting the bad
debts of the company
Account payable – the amount of accounts payable represents the short-term obligations that
the business owes to any outside creditors. Payable forms an important part of the current
obligation. Therefore, the amount of account receivable assists the investors to understand
whether the company is efficient in paying the obligation with the available current asset of
the company or not. Further, if the management is not clear regarding how much amount is
payable and to whom is payable (Hoskin, Fizzell and Cherry 2014). Moreover, if the payment
is missed it may lead to interest charges on payment or late fees on the payment. Therefore,
payables are important item under the balance sheet for making various decisions.
3. Social impact of accounting items
Accounts receivables – the account receivable has various effect with regard to the society.
The details of receivables with the names of the debtors assist the company to assess the
debtor with regard to the payment features as if the debtor fail to make the payment, the
debtor company will have bad reputation in the society as the people will feel that the
company is not efficient to pay their dues (Agha 2014).
Accounts payable – if the company is not efficient in making payment for their dues or if the
amounts of payables are very high in the balance sheet of the company, it indicates that the
company is not efficient in paying their dues (Kai et al. 2017). Therefore, it will have an
adverse effect socially as the people will lose their faith in the company and further, the
potential investors will not consider the company for investing their money.
4. Reflection on the annual report of AMP Limited
When I was going through the annual report for the year ended 31st December 2016, I
found that the annual report of AMP Limited includes the director’s report, the remuneration

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report of the directors, corporate sustainability report and the financial report. Further, the
report includes the disclosure notes to the financial statement, director’s declaration and the
report of independent directors. The financial report of the company includes consolidated
statement of income, consolidated comprehensive income statement, and consolidated
financial position statement, changes in equity statement and statement of cash flows. The
company adopted the significant accounting policies while prepared their financial statements
and the details regarding that are disclosed through the disclosure notes. Further, when the
accounting policy is related to more than one note or where no note is provided for any
particular item, it is clearly mentioned in the report. I further found that the audit of the
financial statement for the year ended 31st December 2016 was carried out by Ernst and
Young and as per their opinion, the financial report of AMP Limited represent the true and
fair view of the company are complied with the Corporation Regulation Act 2001 and
Australian Accounting Standards.

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Reference
Agha, H., 2014. Impact of working capital management on Profitability. European Scientific
Journal, ESJ, 10(1).
Hoskin, R.E., Fizzell, M.R. and Cherry, D.C., 2014. Financial Accounting: a user
perspective. Wiley Global Education.
Hoskin, R.E., Fizzell, M.R. and Cherry, D.C., 2014. Financial Accounting: a user
perspective. Wiley Global Education.
Kai, M.A., Rui, M.I.A.O., YANG, W.C., Zhou, P.E.N.G., Bowen, S.U.N. and HU, N.Y.,
2017. A management method of accounts receivable based on credit rating for rail equipment
manufacturing industry. In Proceedings of the 23rd International Conference on Industrial
Engineering and Engineering Management 2016 (pp. 227-231). Atlantis Press, Paris.
Mathuva, D., 2015. The Influence of working capital management components on corporate
profitability.
Weygandt, J.J., Kimmel, P.D. and Kieso, D.E., 2015. Financial & Managerial Accounting.
John Wiley & Sons.