Commonwealth Bank Australia: A Comprehensive Financial Analysis

This report provides a detailed analysis of the financial statements of Commonwealth Bank Australia, focusing on key aspects such as the major stakeholders, the basis for preparation of financial statements according to Australian Accounting Standards, and the measurement methods used for assets and liabilities. It discusses the significant shareholding patterns, with HSBC Custody Nominees (Australia) Limited and JP Morgan Nominees Australia Limited holding substantial stakes. The report also highlights the company's adherence to historical cost and fair value accounting, along with its corporate social responsibility initiatives aimed at customer experience, community empowerment, and environmental impact reduction. The analysis concludes with an overview of the bank's accounting practices and corporate governance policies.

Running head: COMMON WEALTH BANK AUSTRALIA
Commonwealth Bank Australia
Name of the Student:
Name of the University:
Author’ Note:

1COMMON WEALTH BANK AUSTRALIA
Executive Summary
The aim of the project is to understand about the key aspect of the financial data included in
the financial information of the Commonwealth Bank of Australia. The key shareholding
pattern was discussed with their holdings in the company. The preparation and the
presentation of the financial statement of the company was taken into consideration. The
different measurement methods identified by the company is discussed under the project. The
different accounting assumptions taken by the management of the company while preparing
the financial statement pf the company was taken into consideration into the assignment.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Major Stakeholders of the Company......................................................................................3
Basis for Preparation of Financial Statements.......................................................................4
Measurement Methods...........................................................................................................5
Corporate Responsibility........................................................................................................5
Conclusion..................................................................................................................................6
Reference....................................................................................................................................7

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Introduction
The financial statement of the companies are an important tool for the assessment of
the financial data of the company. The financial information available to the investors of the
company is one of the important tool for the assessment of the financial performance of the
company. The financial information of the Commonwealth Bank of Australia was taken into
consideration and the financial data of the same has been undertaken. The key aspects like the
major stakeholders of the company and the accounting aspects of the financial data of the
company such as the preparation and the assumption taken while preparing the financial
statements are the key maters discussed in the project (Dudin et al. 2015).
Discussion
Major Stakeholders of the Company
The major stakeholders of the company outlined in the project are given below is the
data collected for the major stakeholders of the company is that from the financial statements
and report of the company (Robinson et al. 2015). The major stakeholders of the company
constitutes around 48.87% of the total share issued. The top 20 shareholders of the company
constitutes this major portion of the company. The HSBC Custody Nominees (Australia)
limited is one of the major shareholder of the company holding about 21.75% of the
company’s total share. While the second largest shareholder of the company is the JP Morgan
Nominees Australia Limited that holds around 10.79% of the total shareholding pattern of the
company. The Citicorp Nominees Ply Limited is also having a major stake around 5.84% of
the company. BNP Paribas Noms Ply Limited and National Nominees Limited are some of
the other key important shareholders of the company holding about 3.46% and 3.28% of the
total shareholding of the company (Ball, Li and Shivakumar 2015).

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Basis for Preparation of Financial Statements
The measurement methods and the base for the preparation for the financial
statements of the company financial reports and statements for the year 2017 was made in
accordance to the Australian Accounting Standard Bodies (Minnis and Sutherland 2017). The
basis for the preparation and measurement of the accounting was done by:
 Following the Australian Accounting Standards.
 Assets and Liabilities were measured at historical cost.
 Derivatives and Certain Assets and Liabilities were measured at fair value accounting.
 ASIC Corporation Instrument 2016/191 was used in accordance for rounding of
amounts.
 The operating segment for the company is based on the management and the group
structures.
 The accounting policies of the companies have remained the same as the last year.
 The performance of the subsidiaries companies are reported on the basis of the
consolidated financial reports.
 Acquisition Method will be used in the case of a business combination.
The need for the basis of the preparation of the financial statements is because of:
 Proper Recording and Classification of Accounting Transactions.
 Compliance with the accounting standard.
 Recognition of Revenue on the basis of Accrual and Cash Basis.
 To meet the global accounting standards guidelines and principles.

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Measurement Methods
The measurement methods used by the company used by the company for their assets
and liabilities of the companies are:
 Assets and Liabilities of the company are recorded by the use of historical method
 The current assets and liabilities of the company including derivatives were measure
at fair value.
The assets and liabilities of the company are recorded and valued at the historical
value and not at fair value because the assets of the company is treated with the
concept of the company’s going concern. The assets of the company are for primary
use of the business and not meant for sale or any kind of investment product. The
company uses the assets till the end life of the assets and then scraps the assets when
the productive capacity of the assets falls (Wang 2014).
Whereas the assets and liabilities of the company having a portion of derivatives
instruments needs to be reassessed and the fair value for the same needs to be
determined. The derivatives instruments or the hedging tools are very complex and
needs to be reassessed frequently as the value for the same changes very frequently
(Yohn 2015).
Corporate Responsibility
The Commonwealth Bank follows the corporate responsibility through the programs
and initiatives it takes in assisting the customers and supporting the communities and the
people of the society at large. The company engages to reduce environmental impact which
forms the principal for good bias and a good corporate business policy (Tai and Chuang
2014). The initiatives taken by the company as an effort and under the corporate social
responsibility by the company are:

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 Emphasizing and increasing customers better experience
 Supporting and Empowering the community at large
 Financial Inclusion to the required customers.
 Engaged and a healthy workforce
 Employee Well Being
 Conduct and Culture guidelines
 Acting towards human rights.
 Responsible and an efficient business relationship
 Transparency in the field of taxation
The above point discussed are some of the key initiatives taken by the company as a key
initiatives of the corporate social responsibility (Schwartz 2017).
Conclusion
The above project gives us a detailed analysis of the financial statement o the commonwealth
bank and the financial assumption the company takes. The company way for recording and
classification of accounting and recording for the same is discussed briefly. The key factors
discussed like measurement of company’ assets and there concepts were the key factors
highlighted. The Corporate Social Responsibility of the company was discussed in brief,
which gave us the base for the corporate governance policy the company follows.

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Reference
Ball, R., Li, X. and Shivakumar, L., 2015. Contractibility and transparency of financial
statement information prepared under IFRS: Evidence from debt contracts around IFRS
adoption. Journal of Accounting Research, 53(5), pp.915-963.
Dudin, M., Prokofev, M., Fedorova, I., Frygin, A. and Kucuri, G., 2015. International
Practice of Generation of the National Budget Income on the Basis of the Generally Accepted
Financial Reporting Standards (IFRS).
Minnis, M. and Sutherland, A., 2017. Financial statements as monitoring mechanisms:
Evidence from small commercial loans. Journal of Accounting Research, 55(1), pp.197-233.
Robinson, T.R., Henry, E., Pirie, W.L., Broihahn, M.A. and Cope, A.T., 2015. International
Financial Statement Analysis, (CFA Institute Investment Series). John Wiley & Sons.
Schwartz, M.S., 2017. Corporate social responsibility. Routledge.
Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.
Wang, C., 2014. Accounting standards harmonization and financial statement comparability:
Evidence from transnational information transfer. Journal of Accounting Research, 52(4),
pp.955-992
Yohn, T.L., 2015. Research on the use of financial statement information for forecasting
profitability. Accounting & Finance.