Corporate and Financial Reporting: Equity and Debt Analysis Report

This report provides an executive summary discussing the significance of financial reporting and the role of the Australian Accounting Standards Board (AASB) in establishing accounting standards. The report examines the debt-to-equity ratios of four companies and presents a breakdown of their equity statements. It begins with an introduction to financial accounting and its importance, followed by an explanation of the AASB and its functions. The core of the report includes an analysis of owner's equity components and a comparative analysis of debt-to-equity ratios across the selected companies. The report also highlights the importance of financial reporting for stakeholders and the need for regulation to ensure uniformity and transparency. Finally, the report provides tables with detailed equity analyses for AFT Pharmaceuticals and Alchemia Limited, detailing changes in equity items over several years, with explanations for the changes. The report concludes with a summary of the key findings.

CORPORATE AND FINANCIAL REPORTING
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CORPORATE AND FINANCIAL
REPORTING

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Executive summary:
The report talks about the relevance of the financial reporting and the role of AASB in the
development of the accounting standards.
It further talks about the debt to equity ratio of 4 companies and the break-up of their
statement of their equity.

CORPORATE AND FINANCIAL REPORTING
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Contents
Introduction:...............................................................................................................................4
Importance of financial accounting and reporting:....................................................................4
AASB:........................................................................................................................................4
Owner’s equity:..........................................................................................................................5
Debt to equity of the selected companies:................................................................................18
Conclusion:..............................................................................................................................18
References................................................................................................................................20

CORPORATE AND FINANCIAL REPORTING
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Introduction:
The concept of financial accounting means the process wherein the financial statements are
prepared so that these companies are bale to show in their financial performance to the
outside world.it is very much beneficial to the shareholders, internal team or the management
etc and hence, their appropriateness, relevance is of an utmost importance.
Importance of financial accounting and reporting and whether the same should be
regulated or not?
Financial accounting is the process of preparing financial statements that companies’ use to
show their financial performance and position to people outside the company, Including
investors, creditors, suppliers, and customers. It is further used by the taxation authorities to
test as to whether the incomes have been reported correctly and whether the taxes have been
paid as per the revenue earned by the company (Proquest, 2018).
It is very important for the government to know financial affairs of the company since it is
their duty to ensure fair reporting and accounting.
For the other company’s investors, this information is important since it helps them in
benchmarking and knowing and understand their exact nature. Form the point of view of an
investor, it is very much important to know and understand the financial reporting since that
would help them in making the decision as to whether to make an investment into the
company or not.
For the purposes of the internal decision making too, it is important since it would help the
management in understanding the exact position of the company (Accounting edu, 2018).

CORPORATE AND FINANCIAL REPORTING
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There are many of the bodies such as AASB that are entrusted with the responsibility of
developing the accounting standards. The companies should be able to match up their
financial results and benchmark their business activities. Each company could be able to
compare its results as against the other companies.
If the financial reporting is left at the discretion of the management, then it might go for
financial reporting or not or it might go for different reporting.
So, in order to have uniformity, the financial accounting and reporting should be and is
regulated.
AASB:
AASB is the body which is the agency of the government of the country of Australia. The
body is known as the Australian Accounting standards and also includes in some of the
IFRS’s. When it first began its operations, it recommended some of the modifications to the
IFRS’s and some new disclosure to them. In the year 2007, it went on to modify in the
requirements that have been laid down in the IFRS’s which are to be issued by the IASB.
There were certain disclosures that were asked to be retained and then there were few of the
non-IFRS compliant requirements that applied for the not for profit entities and the public
sector companies (IAS plus, 2018).
The AASB body is the body which helps in the development and the maintenance of the high
quality of the financial reporting standards all across the global financial reporting of all of
the companies. The main contribution of the body is the issuance of the different versions of
the International Accounting standards of the country of Australia, the production of the
standards that are more like the transactions on some consistent basis, influencing the
development of all of the International Financial reporting standards, identification of the
different areas that require in the review and the introduction of the different relevant

CORPORATE AND FINANCIAL REPORTING
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standards for the purposes of covering in those areas, promotion of all of the consistent
application along with the interpretation of the various standards on accounting (AASB,
2018).
The board comprises of some of the independent group of thee experts that have the mix of
practical experience and also the mix of the preparation, auditing, or the using of the financial
reports along with the education of accounting. For this, a high diversity of the geographical
locations are required.
The foundation of IFRS helps in fulfilling in the criteria of the composition of the board and
also of the geographical allocation that could be seen from the individual profiles. The
members of the board are somewhat responsible for the development and the publication of
the standards of the IFRS’s. The board is responsible for the approving of the interpretations
of the standards of IFRS that have bene developed by the Interpretations committee of the
IFRS (IFRS, 2018).
So, the AASB plays a very important when It comes to the preparation of the accounting
standards.
The IASB on the other hand comprises of about 15 members from 9 different countries which
includes in the United States. The body received funds from the major firms that are engaged
in the services of providing accounting, from the private financial institutions and the
industrial companies. AICPA was the founding member of the IASB. The IASB does not
sponsor nor endorses the IFRS resources (IFRS, 2018).
under the foundation of the IFRS, IASB though has the several responsibilities but the
standards set in by the body are not compulsory since it has a very few limited number of
countries as its members and if the standards developed by this committee are made

CORPORATE AND FINANCIAL REPORTING
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compulsory, then the different companies would be following in different accounting
standards for the preparation of the financial statements which would defeat the purpose of
introducing uniform AS (IAS plus, 2018).
The IASB is just an oversight board for the IFRS’s. It is not compulsory that its accounting
standards be enforceable. It does not provide a solution for the exact solution for the
requirements of the companies.
Owner’s equity:
The following tables shows in the analysis of the various items of equity for the 4 companies
for 4 years:
AFT Pharmaceuticals:
Pa
rtic
ula
rs
20
17
20
16
20
15
20
14
Change in NZ
$
Change in
%
fro
m
201
4 to
201
5
Fr
om
201
5
to
201
6
fro
m
20
16
to
20
17
fr
om
20
14
to
20
15
Fr
o
m
20
15
to
20
16
fr
o
m
20
16
to
20
17
Gene
ral
unde
rstan
ding
Cause for change
fro Fr from

CORPORATE AND FINANCIAL REPORTING
8
m
2014
to
2015
om
20
15
to
20
16
2016
to
2017
Sh
are
Ca
pita
l
6
2,9
44.
00
5
3,9
02.
00
1
2,8
92.
00
33
.0
0
12,8
59.0
0
4
1,0
10.
00
9,0
42.
00
38
96
6.6
7%
31
8.
10
%
16
.7
7
%
these
are
the
amou
nts
that
are
inves
ted
into
the
comp
any
by
the
outsi
ders
could
be
due
to
new
capit
al
being
intro
duce
d into
the
comp
any
co
uld
be
du
e
to
ne
w
ca
pit
al
bei
ng
int
rod
uc
ed
int
o
could
be
due to
new
capita
l
being
introd
uced
into
the
comp
any

CORPORATE AND FINANCIAL REPORTING
9
the
co
mp
an
y
Re
tain
ed
ear
nin
gs
-
44,
02
5.0
0
-
25,
63
7.0
0
-
10,
73
2.0
0
3,
18
1.
00
-
13,9
13.0
0
-
14,
905
.00
-
18,
38
8.0
0
-
43
7.3
8%
13
8.
88
%
71
.7
2
%
these
are
the
amou
nts
that
from
the
sum
total
of
the
past
earni
ngs
of
the
comp
any
could
be
due
to the
losse
s that
the
comp
any
could
have
suffe
red in
the
previ
ous
year
co
uld
be
du
e
to
the
los
ses
tha
t
the
co
mp
an
y
co
uld
ha
ve
could
be
due to
the
losses
that
the
comp
any
could
have
suffer
ed in
the
previ
ous
year

CORPORATE AND FINANCIAL REPORTING
10
suf
fer
ed
in
the
pre
vio
us
ye
ar
Sh
are
opt
ion
s
res
erv
e
29
5.0
0
65.
00
- - - 65.
00
23
0.0
0
#D
IV/
0!
#
DI
V/
0!
35
3.
85
%
these
are
the
amou
nts
that
have
been
set
aside
by
the
comp
any
towar
could
be
due
to no
reser
ve of
the
comp
any
co
uld
be
du
e
to
no
res
erv
e
of
the
co
mp
an
could
be
due to
no
reserv
e of
the
comp
any

CORPORATE AND FINANCIAL REPORTING
11
ds
the
share
s
optio
ns
y
Fo
rei
gn
cur
ren
cy
tra
nsl
atio
n
res
erv
e
25
6.0
0
-
10
0.0
0
16
6.0
0
-
16
6.
00
332.
00
-
266
.00
35
6.0
0
-
20
0.0
0%
-
16
0.
24
%
-
35
6.
00
%
these
are
the
amou
nts
that
have
been
set
aside
by
the
comp
any
towar
ds
the
forei
gn
could
be
due
to
fluct
uatio
n due
to
forei
gn
curre
ny
exch
ange
co
uld
be
du
e
to
flu
ctu
ati
on
du
e
to
for
eig
n
cur
ren
y
could
be
due to
fluctu
ation
due to
foreig
n
curre
ny
excha
nge

CORPORATE AND FINANCIAL REPORTING
12
curre
ncy
conv
ersio
n
ex
ch
an
ge
Ca
sh
flo
w
hed
ge
res
erv
e
- - -
30
5.0
0
- -
305.
00
305
.00
-
#D
IV/
0!
-
10
0.
00
%
#
DI
V/
0!
these
are
the
amou
nts
that
have
been
set
aside
by
the
comp
any
towar
ds
the
loss
that
the
could
be
due
to
fluct
uatio
n due
to
cash
flow
hedgi
ng
co
uld
be
du
e
to
flu
ctu
ati
on
du
e
to
cas
h
flo
w
he
dgi
ng
could
be
due to
fluctu
ation
due to
cash
flow
hedgi
ng