Risk Evaluation: Financial Consolidation & Reporting Analysis

This report provides a strategic review of the consolidation process, including mergers and acquisitions, emphasizing the importance of evaluating risk factors associated with consolidation and considering the monetary and financial policies of the central bank. It highlights the potential risks related to the interdependencies of financial institutions and the critical role of impairment charges, noting a reduction in these charges to 13 basic points, leading to a 4% net profit. The report also underscores the significance of adhering to accounting principles and acknowledges the global economic growth, digitalization, and investment projects like the Panorama wealth system. Intragroup transactions and investments, such as the company's $(1589) million investment in subsidiaries, are identified as vital for creating a positive market share. The report references the Westpac Group's annual report and other sources for further analysis.

Teamwork Assignment
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Contents
Memorandum:..................................................................................................................................3
References:......................................................................................................................................5
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Memorandum:
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Memorandum:
To: [Board of Directors]
From: [Financial Analyst]
Date: [January16, 2018]
Subject: [With reference to the consolidation]
For the efficiency and effectiveness of the company a strategic review over the process of
consolidation includes mergers and acquisition which has been discussed. The company is
required to evaluate the risk factors associated with the process of consolidation and need to
consider the monetary and financial policies of the central bank of the country. Apart from this,
the potential risk associated with the interdependencies of the financial institution is required to
be evaluated (AASB, 2014).
The impairment charges also acts as a critical point in the process of consolidation. The charges
related to impairment occur when there occur a difference between fair value and the market
value (AASB, 2014). The impairment charges of the company have reduced to the 13 basic
points which would help facilitate the company in showing a true and fair view of the company.
As a result, the company is able to earn 4% net profit over the year. However, it further indicates
that the asset quality of the company is sound, and ensures less exposure to the risk factor.
Further, it is required to follow the accounting principles (Guthrie, & Pang, 2013).
For deeply analysing the process of consolidation, it is required to by the company to know that
there is a rapid growth in the economic sector around the world which provides massive
opportunities to the company to expand and diversify its operation on a large scale. There are
various policies being passed around the world to develop steps or ways in which the concerned
company could flourish its business activities. However, the concerned company has shown its
progress in the field of digitalization and thereby promoting towards the improved infrastructure.
Apart from these the concerned company investment projects also highlight the launch of the
Panorama wealth system that enables the customers of the company to take care of their value
(Stevenson, 2012).
Therefore, the investment or intragroup transactions of the firm becomes an important part of the
process of consolidation as it creates a positive share of the company in the market (Westpac
group, 2017). The company has made an investment of $ (1589) million in its subsidiaries (these
are for regulatory purpose) (Westpac group, 2017).
The company have foreign subsidiary companies like BT financial group, Westpac institutional

References:
 AASB, C. A. S. (2014). Financial Instruments. Project Summary.
 Guthrie, J., & Pang, T. T. (2013). Disclosure of Goodwill Impairment under AASB 136
from 2005–2010. Australian Accounting Review, 23(3), 216-231.
 Stevenson, K. M. (2012). The changing IASB and AASB relationship. Australian
Accounting Review, 22(3), 239-243.
 Westpac group, (2017). Annual report. Westpac group. Available at:
https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/aw/ic/
ASX_FY17_Financial_Results_Bookmarked.pdf. Accessed as on: 16th January, 2018.
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