Corporate Accounting Report: Analysis of Dexus and GPT Fund Sources

This report provides a comprehensive analysis of corporate accounting practices, focusing on two ASX-listed real estate investment companies, Dexus Limited and GPT Group. The report examines the various sources of funds utilized by these companies, including short-term and long-term debts, common stock, retained earnings, and other equity components, and their evolution over a three-year period. It identifies the percentages of internally and externally generated funds for each company. Furthermore, the report evaluates the relative merits and shortcomings of different funding sources, critically examines the types of liabilities presented in the balance sheets, distinguishing between interest-bearing and non-interest-bearing liabilities, and explores the key provisions under AASB 137 regarding provisions, contingent liabilities, and contingent assets. The analysis also investigates whether the selected companies reference AASB 137 in their annual reports and identifies the different categories of assets recorded, along with their measurement bases. The report concludes with a comparative assessment of the financial strategies and accounting practices of Dexus and GPT, offering insights into their financial management and compliance with accounting standards.

CORPORATE
ACCOUNTING

ABSTRACT
As per the above report it is summarised that corporate accounting essential part of
accounting. There are selected two companies of Dexus and GPT and both are same sector
company. There are analysed of the funds of company and how to utilised in different activities.
The assets and liabilities of the company categorised as per the nature and measure with different
cost.

Table of Contents
ABSTRACT.....................................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
(I) Different sources of funds used by chosen companies...........................................................4
(ii) Evolution of source of funds used by company over last three years....................................4
(iii) Identify the percentage of the fund that is internally generated and the percentage of the
fund that is externally generated for each selected company......................................................6
(iv) Explain the relative merits and shortcomings of the different sources of fund used by your
selected companies.......................................................................................................................7
(v) Critically examine different types of liabilities shown in the balance sheet of your selected
companies? Identify which ones of the liabilities are interest bearing and which ones are not
interest is bearing.........................................................................................................................8
(vi) Critically examine the key provisions under the AASB 137 ‘Provisions, Contingent
liabilities and Contingent assets'..................................................................................................9
(vii) Identify if your selected companies have made any reference to this particular standard
(AASB 137) in their annual reports...........................................................................................10
(viii) Identify all different categories of assets recorded by the selected companies................11
(ix) Critically examine the measurement basis used by the company for each class of assets
recoded by the selected companies............................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Corporate accounting can be defined as a process which is dedicated to the activities of a
particular business entity. Under this types of accounting, accountant only focuses on monetary
records of a company. The project report is based on understanding about various kinds of
sources of funds which are used by companies (Al-Sartawi, 2018). For this purpose two ASX
listed companies has been selected which are Dexus limited and GPT group. Dexus limited
company is a real investment company and its headquarter is at New south Wales, Australia.
While GPT group is also a real state investment company. This company's headquarter is at
Sydney, Australia. The project report covers detailed information regards to different sources of
funds used by both of companies as well as percentage of internal and external source of funds.
In addition, further part of report covers information regards to key provision under AASB 137.
MAIN BODY
(I) Different sources of funds used by chosen companies.
Source of funds in Dexus limited company:
 Short term debts
 Long term debts
 Common stock
 Retained earnings
 Accumulated other comprehensive income
 Other equity
In the GPT group company same sources of funds are used.
(ii) Evolution of source of funds used by company over last three years.
Dexus limited company:
 Short term debts- In the aspect of this company, it can be find out they had taken short
term loan of $316 million in year 2016, $149 million in year 2017 and $205 million in
year 2018. This is indicating that company is taking loan of different amount in all three
years.
 Long term debts- In the aspect of this company, it can be find out they had taken long
term loan of $3371 million in year 2016, $2698 million in year 2017 and $3155 in year

2018. It shows that this company is depending largely on long term loan. This is so
because percentage of long term has been increased year by year in a significant manner.
 Retained earnings- Such as in the context of this company, it can be find out that their
value of retained earnings was of $1634 million in year 2016 which raised year by year.
In year 2017, this was of $2373 and 2018, it was of $3616 (Beneda, 2016). This is
indicating that company's financial position is quite strong as their retained earnings
amount is increasing in a significant manner in all three years.
 Common stock- In the context of above company, it can be find out that their common
stock's value was of $5910 million in year 2016, $6402 million in year 2017 and $6404
million in year 2018. It is indicating that company is generating funds by issuing of
shares.
 Accumulated other comprehensive income- It involves unrealized gains and losses listed
in the balance sheet equity segment that are offset below-retained earnings. In the aspect
of this company, it can be find out that their other comprehensive income was of $43
million in year 2016 which remained same in year 2017 and 2018.
 Other equity- This is also an important source of finance, whose value is different in all
three years for above company. Such as in year 2016, this was of $9 million which
became negative and became of ($16 million) in year 2018.
GPT group:
 Short term debts- This company had short term debts of $49 million in year 2016 and in
year 2017, it was of $49 million . While in year 2018, they had debt of $20 million.
 Long term debts- This company had long term debts of $2948 million in year 2016 and in
year 2017, it was of $3281 million . While in year 2018, they had debt of $3599 million.
 Retained earnings- This company had retained earnings of $124 million in year 2016 and
in year 2017, it was of $950 million . While in year 2018, they had earnings of $1945
million (Cheng and Kung, 2016).
 Common stock- This company had common stock of $8130 million in year 2016 and in
year 2017, it was of $8141 million . While in year 2018, they had stock of $8152 million.

 Accumulated comprehensive income- This company had other income of $16 million in
year 2016 and in year 2017, it was of $9 million. While in year 2018, they had other
income of ($8 million).
 Other equity- This company had other equity of $13 million in year 2016 and in year
2017, it was of $8 million. While in year 2018, they had other equities of $13 million).
(iii) Identify the percentage of the fund that is internally generated and the percentage of the fund
that is externally generated for each selected company
There are defined internally funds which are generated by both company in particular percentage
such as:
Internally funds are generated by companies by internal activities and in the funding
sources consist of retained earning profits, any loan, start up and any additional portion of invest
funding (Darrat and et. al, 2016).
Dexus limited company: Loan from partners: The company take loan from partners who are working together in
this business and contribution about 5%. Equity issuance: The contribution of this fund about 3% from the equity. Sale of assets: When company require fund for internal activities so they are selling out
unused assets which is about 10% in company.
 Recover from insurance: The company claim on particular policy which is recovered in
particular year and contribution about 5%.
GPT Group: Retained earning profits: It is earned by the business when they are selling out any assets
and control on the working capital so helps to raise fund about 5%. Interest from loan: The company give loan to different company and take interest on
principal amount that helps to business that is about 3%.
 Fixed assets on hand: In emergency case company sale out the fixed assets which is
useful source and percentage about 15%.
Externally funds are raised by the business from outside sources. There are defined
different sources of both companies:
Dexus limited company:

 Leasing: It contributes about 5% in the business.
 Bank Overdraft: The contribution of this fund about 10% in the company.
 Equity capital: Most of the fund generate from this source like 20%.
GPT Group:
 Venture capital: 20% fund arrange by company from this source.
 Term loans: 15% contribution from this source (Djatmiko, Maulani and Nirmalasari,
2017).
(iv) Explain the relative merits and shortcomings of the different sources of fund used by your
selected companies.
Both companies are getting funds from similar source of funds. Each source of funds has
some limitations and benefits which are mentioned below in such manner:
1. Short term debt: This can be defined as a type of loan which is taken by business entities for
short time period. Under it companies take financial loan for less then one year.
Benefits-
 Fast approval- It is key benefit of this source of fund that this can be approved by
financial institutions in quick time period.
 Lower interest rate- In this source of fund, companies needed to pay a lower interest rate
on the debt amount.
Drawback-
 Due to this companies' credit score gets effected negatively. It is one of they issue of this
source of fund.
 As well as higher transaction is also a main drawback of this source of fund.
2. Long term debt- This can be defined as a type of loan which is taken by business entities for
long time period. Under it companies take financial loan for more then one year.
Benefits-
 Long-term loans give business banks and insurance firms a very good chance to invest
their excess funds.
 Another importance of the lengthy-term loan is that by the time it is beneficial or useful
to it, the government can repay it. It can later transfer these debts at a lower rate as well.
Drawback:

 Long-term loans are mostly taken to finance wars or to conduct a large program of public
works. If an outside threat is to be met by a country, these long-term loans are inevitable
and are therefore justified (Goh and et. al, 2016).
 It consumes too much time in order to make repayment of loans.
3. Retained earnings - It can be defined as a portion of profit which is remained after making
payment to shareholders. This is a kinds of additional income that is kept as reserve.
Benefit:
 Retained earnings are one of the cheapest forms of funding as they do not require
floatation costs such as raising money by selling various types of shares.
 This source of fund allow companies' financial structure to remain flexible.
Drawbacks:
 Management may exploit the retained earnings by exploiting the stock market value of
the company.
 Increased use of retained earnings results in the firm's monopoly behaviour.
4. Common stock- Common stock is a a kind of possession of corporation equity, a kind of
defence. Although widely used in other parts of the world are the terms legislative share and
common share; "common stock" is generally used in the United States.
Benefit:
 A business that issues common stocks on the financial markets uses them as an
alternative to loans because they are less costly.
 By help of this funds can be generated in quick time period.
Drawback:
 This is risky for companies as they are needed to make payment of dividend.
 Companies can not generate higher amount of funds from this source of finance (Kong,
Radhakrishnan and Tsang, 2017).
(v) Critically examine different types of liabilities shown in the balance sheet of your selected
companies? Identify which ones of the liabilities are interest bearing and which ones are
not interest is bearing.
Dexus limited company:
Liabilities Types

Short term debts Interest bearing
Accounts payable
Deferred income tax
Other current liabilities
Long term debts Interest bearing
Deferred tax liabilities
Other long term liabilities
GPT group:
Liabilities Types
Short term debts Interest bearing
Accounts payable
Deferred income tax
Other current liabilities
Long term debts Interest bearing
Deferred tax liabilities
Other long term liabilities
(vi) Critically examine the key provisions under the AASB 137 ‘Provisions, Contingent
liabilities and Contingent assets'
AASB 137 is a standard which is applied by the companies for the contingent assets
which is a possible asset that origin from the past activities and whose creation will be confirmed
only by the occurrence or non occurrence or more uncertain future activities not completely
control the entity.

Provisions: It is different from other liabilities like accounts payable and accrual because of there
is uncertainty about the amount and timing so according to that required to settle all the
expenditure (Mishra and Singh, 2017). In broad manner:
 Accounts payable define as a liabilities which is utilised by the company for the goods as
well as services have been supplied or received. These are based on the invoice and
agreed with the supplier.
 Accruals are liabilities that pay by the company for goods & services that has been
revived or supplied but have not been paid, invoiced or formally accepted by the supplier.
Many times it is less than for provisions due to arise uncertainty.
Relationship between provisions and contingent liabilities: In a general sense, all
provisions are uncertain due to face uncertainty in regarding of time or amount. Therefore,
through this standard the term, contingent is utilised for liabilities as well as assets that are not
identified due to have presence will be confirmed through the happening or non happening of
more uncertain future activities not control of the activities. Additionally, the particular term is
known as contingent term which is utilised for different liabilities and do not reach on the
recognition criteria.
Contingent Liabilities: These liabilities are not disclosed and liable for obligation unless
the possibility of an outflow of resources substantiate economical advantageous is remove. When
the entities is obliged for the different portion so expected to be met through other parties which
are treated all the liabilities as contingent. These are identified for particular part where no
reliable assumption can be made.
Contingent Assets: These assets are disclosed when inflow of the economic benefit is
probable. Contingent assets are continue assure about all the improvements which are
appropriately reflected on the financial statement that are produced by the organisation. If it has
almost inflow for the economic benefits so it links with the income which are identified and
realisation of assets which is not a contingent assets and recognition is appropriate.
(vii) Identify if your selected companies have made any reference to this particular standard
(AASB 137) in their annual reports
AASB 137 refers as a liability of uncertain timing or amount. The ED does not use
provisions which is described as a term alternatively proposes using the term as a non financial
liability which consist of different aspects of provisions or non financial liabilities. The particular

standard are applied by the both companies and according to set all the provisions, liabilities and
asserts in systematic manner (Ormazabal, 2018).
Contingent liabilities: These are not identified as liabilities due to they are either such as:
 Possible obligation: It has to be acceptable however the business organisation has a
present obligation that could advantage to an escape of materials personify by economic
advantages.
 Present obligation: These are related with the particular criteria that set by the standard
due to outflow of resources settle by the company for the economic benefits and
obligation can not be made.
They are not disclose all the liabilities if it is not profitable and not provide economic
benefits. These are followed same for contingent assets in effective manner. According to
standards Both companies are produce provisions and reduce the uncertainties regarding time
and amount.
(viii) Identify all different categories of assets recorded by the selected companies.
The assets are categorised by the companies according to their nature and recorded in the
balance sheet. These are classified into current, non current, physical, intangible, non operating
and operating (Shabana, Buchholtz and Carroll, 2017). There are defined assets of both
companies such as:
Dexus limited company
Current assets  Inventory
 Cash at bank
 Short term deposits
 office supplies
Fixed assets  Buildings
 Plant & machinery
 Vehicles
Intangible assets  Goodwill
 Copyright
GPT group

Current assets  Accounts Receivable
 Cash and cash equivalents
 Marketable securities
Fixed assets  Equipments
 Furniture
 Land
Intangible assets  Patents
 Trademarks
(ix) Critically examine the measurement basis used by the company for each class of assets
recoded by the selected companies.
To measure the assets of company used different methods of different types of assets that
categorised according to their nature. Both companies are used these methods as following: Cash and cash equivalents: These are type of current assets which are measuring at
amortised cost or fair value is not likely to manufacturer materially on different amounts. Marketable securities: These are traded in the public market and value can be identified
through prices and attained through public market. These are analysed on the historical
cost in effective manner (Vann, 2016). Trade receivable and accounts receivable: They are usually reportable on the net
realizable value and approximately on the fair value which is depended on the predication
of collectability. Inventories: These assets are measured on lower cost of market value whichever is less
than. In this cost consist of cost of purchase, cost of inventories and all the other costs
that carry out the present location. Investment Property: These property can be recorded on fair value model or fair model
to measure the assets. Profit and loss arising from a change in the fair value of investment
property are identified through income statement. Non current assets: Both companies have different types of non current assets which are
measured on the revaluation model as well as cost model.

 Fixed assets: On fixed assets mostly companies applied different types of depreciation
method according to set guidelines and follow from past activities. Depreciation methods
are straight line method and double line method.
 Intangible assets: There are consisting of different types of assets like goodwill, patent,
trademark. All the assets are measured on the cost model or revaluation model to
calculate actual amount of the assets (Wong, 2016).
CONCLUSION
As per the above discussion is concluded that corporate accounting is essential branch of
the accounting that helps to organisation to prepare the all financial statements in appropriate
manner. There are applied all the standards which is followed by the Australian companies. The
companies are follow the standard of AASB 137 that based on the provisions, continent assets
and liabilities which are essential of the company and recorded according to standard. Both
company generate funds from interest and external sources to run business activities and
categorised liabilities and assets according to nature like fixed, current and non current.

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