Accounting Financial Analysis Report: Myer Holding Limited

This report provides a comprehensive financial accounting analysis of Myer Holding Limited, a departmental store operating in Australia. It delves into the company's valuation methods for assets and liabilities, including inventories, property, plant and equipment, provisions, and derivative financial instruments, aligning these methods with the Australian Accounting Standards Board (AASB). The report examines the measurement concepts and approaches used by the company, ensuring clarity and comparability in its financial reporting. Furthermore, it assesses the qualitative characteristics of the AASB conceptual framework, such as relevance, faithful representation, comparability, and understandability, to evaluate the reliability and usefulness of Myer Holding Limited's financial information. The analysis covers inventory valuation using weighted average cost, property, plant, and equipment depreciation using the straight-line method, provision recognition based on past events, and the fair value measurement of derivative financial instruments. The report concludes with a summary of the importance of financial accounting in preparing financial statements according to accounting standards and how the company adheres to the framework of qualitative characteristics for financial reporting.

Running head: ACCOUNTING FINANCIAL ANALYSIS REPORT
ACCOUNTING FINANCIAL ANALYSIS REPORT
Name of the Student
Name of the University
Author Note

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ACCOUNTING FINANCIAL ANALYSIS REPORT
Executive Summary
The reports show about the financial accounting process in the financial statement. The report
shows about the company Myer Holding Limited which is a departmental and carries its
business operation in Australia. It shows the valuation method which company uses in
regards of inventories, property, plant and equipment, provision and derivative financial
instruments. It also states the qualitative characteristic of conceptual framework in the
business.

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Table of Contents
Introduction................................................................................................................................3
Overview of the Company.........................................................................................................3
Valuation of Asset and Liabilities..............................................................................................3
The valuation method used by company related to Asset and Liabilities..................................4
AASB Conceptual Framework..................................................................................................8
Conclusion..................................................................................................................................9
Reference..................................................................................................................................10

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ACCOUNTING FINANCIAL ANALYSIS REPORT
Introduction
Financial accounting is a branch of accounting which keep records of a company
transaction. It helps the company to maintain its financial statement as per the standard
guidelines set by Australian Accounting Standard (Beatty and Liao 2014). Company issue the
financial statement for the stakeholders who analysis the statement and take necessary action
regarding the financial position of company. The report based on the company Myer Holding
Limited. It shows the valuation method used by company in regards to asset and liabilities in
the business. This report also shows whether the valuation method used by the company is
appropriate in regards to conceptual framework of the business. It shows how the qualitative
characteristic of conceptual framework and whether the company can follow all the rules in
the preparation of financial statement.
Overview of the Company
The report is based upon the company Myer Holding Ltd, which is a departmental
store and carries its business operation in Australia (Myer Holdings Ltd 2019). It contains all
kind of product in the store which can meet the requirement all types of customers. The
headquarter of company is in Docklands, Victoria, Australia.
Valuation of Asset and Liabilities
Measurement concepts as per the accounting standard lead the information to the
company about the valuation of asset, liabilities and other elements of financial statement. It
provides a framework which should be followed by the company while carrying the valuation
method in asset and liabilities (Henderson et al., 2015). The measurement concepts used by
the company provide a foundation of the company financial health to its stakeholders which
helps them to take proper decision upon the company financial statement. These help the user
to compare one company financial statement to another company financial statement.

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ACCOUNTING FINANCIAL ANALYSIS REPORT
Measurement approaches are there in the valuation of company asset and liabilities as
the initial amount is the measurement which is done by the company at the time of acquiring
the asset or liability in the business (Hoyle, Schaefer and Doupnik 2015). It can be adjusted in
subsequent years by the method of depreciation and amortisation. On the other hand,
remeasured amount is the amount measured at the end of each financial year. These two
measurement approaches would help the accounting standard to maximise clarity in the
financial report.
A company should measure their asset as per accounting standard; proper disclosure
has to be given by the company in the notes of account regarding the method used for the
valuation of asset and liabilities (Maynard 2017).
The valuation method used by company related to Asset and Liabilities
Inventory
The analysis of company financial statement shows that the company has valued the
inventories at the lower of cost and net realisable value. As per the notes of account in
company financial statement it shows that in Note, B2 company has chosen detail of the
valuation method used by them in regards of the inventories (Schaltegger and Burritt 2017).
Company has determined the cost by the use of weighted average cost, but it is calculated
after the deduction of any purchase settlement discount and includes the cost spend by the
company to bring the inventories to the present location and condition. As per AASB 102
company should incorporate all the cost which incurred in regards to the inventory. As per
paragraph 9 of AASB 102 company should measure the inventory cost or net realisable value
whichever is lower (Aasb.gov.au 2019). Company has given all the assumption which they
have taken for the valuation of the inventory.

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Property Plant and Equipment
AASB 116 shows the measurement of asset and liability in the financial statement. As
per the paragraph, it shows the measurement of asset and liabilities by the company, and
company should take the characteristic of the asset or liabilities while considering the fair
market value of the same.
As per the company financial report, the notes on the account shows the method used
by the company for the valuation of Property, Plant and Equipment. The note C1 gives the
detail of Property, Plant and Equipment as it states that the company has shown the asset at
cost less depreciation (Aasb.gov.au 2019). Company while calculating the cost included
many factors such as expenditure incurred for the acquisition of the asset, transfer from
equity on qualify cash flow hedges of foreign currency. Company has used straight-line
method for the depreciation of the asset. It has maintained the useful life of all the fixed asset
in the business. Company has provided proper disclosure as per AASB 116 in regards to the
valuation of Property, Plant and Equipment.

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Provision
AASB 137 deals with the accounting of Provision, Contingent asset and Contingent
liabilities (Aasb.gov.au 2019). As per paragraph 36 shows the measurement of provision as it
states that the amount which is recognised by the company as provision should best estimate
by the company in regards to the same.
The company notes of account show the method used by the company in regards to
the provision made by the company. As per Note C3 company has recognised the provision
by the experience of past events. Company has not recognised the provision for future losses
in the business. It has also included the obligation which is small while making the provision
in the business (Aasb.gov.au 2019). Provision measured at the present value which finds most
suitable by the management, discount rate which is used by the company to determine the
present value reflects the current market position by taking into consideration the risk in time
value of money. The notes on account also show the provision of employee benefits as how
the company is managing the provision while carrying the business activities.

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Derivative Financial Instruments
AASB 9 states about the measurement of financial instrument. As per paragraph 5.1,
the entity should measure the financial asset or financial liability as per the fair value plus the
profit or loss directly related to the asset or liability of business.
The company notes of account show the measurement method used by the company
in regards to Derivative Financial Instruments (Aasb.gov.au 2019). As per Note E2 company
is recognising it at fair value upon the date when the company entered into derivative
contract. The company group designated the derivative as the hedge of fair value of
recognised asset/liability or a firm commitment or hedge of cash flow which has high
probable forecasted transaction.

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ACCOUNTING FINANCIAL ANALYSIS REPORT
AASB Conceptual Framework
Qualitative Characteristic of Financial Information
1. Relevance – Company should provide proper information in the financial statement,
which can affect the decision made by the financial user (Schroeder, Clark and Cathey
2019). It has to provide material information of the company business activities, the
level of uncertainty of information should not be there in company financial
statement. As per the company Myer Holding Ltd is concern it has provided all the
related information in the financial statement which can help the user to know about
the financial health of the business. The company has given proper discloser
regarding the accounting policy used by them in the preparation of financial
statement.
2. Faithful Representation – Information given by the company should be proper and
on which the financial user can easily rely upon as this is the base on which they take

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proper decision in the business. As per company financial statement is consider it has
provided all the appropriate information in the financial statement, this can helps the
user to make proper decision about the company health.
3. Comparability – Information has to be provided on a comparative basis which can
help the user to compare the company performance between two years. As per Myer
Holding Ltd is concern it has provided two-year financial details which can help the
user to compare the company performance easily in the business.
4. Understandability – Financial statement has to be prepared the financial statement as
per the accounting standard that helps the financial user to understand the company
business easily and able to take necessary decision upon the same. As per Myer
Holding Ltd is concern it has followed all the accounting standard while preparing the
financial statement which will help the user to understand the financial statement
easily as it has shown all the accounting policy in the notes in account.
Conclusion
On a final note, it shows the importance of financial accounting in the business.
Financial accounting helps the company to prepare its financial statement as per the rules and
norms listed in accounting standard. It concludes upon the company Myer Holding Ltd which
is having departmental store in Australia and provide all type of product to the customers.
The report shows the valuation method used by the company in regards to the asset and
liabilities and how the company is disclosing the same in the financial statement. It also states
about the conceptual framework as how the company is meeting the criteria of qualitative
characteristic stated in conceptual framework for financial reporting.

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Reference
Aasb.gov.au (2019). [online] Aasb.gov.au. Available at:
https://www.aasb.gov.au/admin/file/content105/c9/AASB102_07-15.pdf [Accessed 16 Sep.
2019].
Aasb.gov.au (2019). [online] Aasb.gov.au. Available at:
https://www.aasb.gov.au/admin/file/content105/c9/AASB13_08-15.pdf [Accessed 16 Sep.
2019].
Aasb.gov.au (2019). [online] Aasb.gov.au. Available at:
https://www.aasb.gov.au/admin/file/content105/c9/AASB137_07-04_COMPjun14_04-14.pdf
[Accessed 16 Sep. 2019].
Aasb.gov.au (2019). [online] Aasb.gov.au. Available at:
https://www.aasb.gov.au/admin/file/content105/c9/AASB9_12-14.pdf [Accessed 16 Sep.
2019].
Aasb.gov.au (2019). [online] Aasb.gov.au. Available at:
https://www.aasb.gov.au/admin/file/content105/c9/ACCED264_06-15.pdf [Accessed 16 Sep.
2019].
Beatty, A. and Liao, S., 2014. Financial accounting in the banking industry: A review of the
empirical literature. Journal of Accounting and Economics, 58(2-3), pp.339-383.
Henderson, S., Peirson, G., Herbohn, K. and Howieson, B., 2015. Issues in financial
accounting. Pearson Higher Education AU.
Hoyle, J.B., Schaefer, T. and Doupnik, T., 2015. Advanced accounting. McGraw Hill.
Maynard, J., 2017. Financial accounting, reporting, and analysis. Oxford University Press.

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Myer Holdings Ltd (2019). Myer Holdings Ltd - AnnualReports.com. [online]
Annualreports.com. Available at: http://www.annualreports.com/Company/Myer-Holdings-
Ltd [Accessed 16 Sep. 2019].
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues,
concepts and practice. Routledge.
Schroeder, R.G., Clark, M.W. and Cathey, J.M., 2019. Financial accounting theory and
analysis: text and cases. John Wiley & Sons.