Financial Accounting Report: Seek Limited 2017-2018

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Financial Accounting
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Table of Contents
Introduction....................................................................................................................................3
Task 1..............................................................................................................................................4
a)......................................................................................................................................................4
b)......................................................................................................................................................4
Task 2..............................................................................................................................................6
Task 3..............................................................................................................................................8
Conclusion......................................................................................................................................9
References.....................................................................................................................................10
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Introduction
The give report is the continuation of the Part A. Accordingly; all the given problems mentioned
in Part 2 have been answered in accordance with the Seek Limited. This will not only help to
understand the business problem currently being faced by Seek Limited but it will also gain
understanding regarding the concepts and aspects that are generally followed in any business
organization.
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Task 1
a) Classification of Expenses of Seek Limited on the basis of their function:
S.
No. Expenses
2018
($m)
2017
($m) Classification
1 Direct Cost of services -130.4 -64.3 Production Cost
2 Employee benefit Expenses -447.8 -354.7
Social Security
Contribution
3 Marketing related Expenses -145 -110.2 Selling Cost
4
Technology product &
development -30.8 -21.3
Research and development
cost
5
Operational and administration
expenses -136.6 -133.4 Administration cost
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Depreciation and amortization
expenses -67.6 -53.4 Administrative Cost
7 Finance costs -43.4 -29.3 Administration cost
8 Transaction Cost -8.7 -14.8 Administration Cost
b)
 Direct Cost of services: It refers to those expenses which are being incurred by Seek Limited to
pay the wages to their professional for availing their services. Thus, these costs come under the
category of production cost as these are related to the production of goods or services. It may be
direct or indirect but these come under the category of production cost.
 Employees Benefit Expenses: These are the expenses contributed by the employer to Seek
Limited for the benefit of employees apart from their wages. Thus, these come under the
category of social security contribution made by the Seek Limited for their employee’s benefits.
 Marketing Related Expenses: These are the expenses incurred by the Seek Limited for presenting
their products or services to their targeted audiences as future buyers of the products or services.
Thus, these are the expenses Seek Limited bear to achieve sales of their services as more these
expenses are incurred higher will be the chances of conversion rate.
 Technology product and development: These are the expenses companies bear for the
development, research and maintenance of technological assets. Thus, these are expenses come
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under the category of Research and development cost as it comprises the development cost of
new product and expenses incurred to improve their assets.
 Operational and Administration Cost- The expenses are classified under the category of
administration cost as these are related to the management of the business of Seek Limited.
 Depreciation, Finance and Transaction cost are also being classified as a part of the
administrative cost as these are generally related for the administrative purpose in Seeks Limited.
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Task 2
There are certain accounting policies that have been followed in the better presentation of
financial statements that will help to prepare and analyze the financial statements in a better
manner. An attempt has been made to ensure that all the accounting policies are being followed
continuously. Furthermore in case of any change in accounting policy, all the relevant
disclosures regarding such change along with its impact on the financial 1have been made. Such
accounting treatment and disclosures are in compliance with the provisions contained in AASB
108 or IAS 8. The provisions contained in both the standards are almost similar and are in the
same line.
Following distinct and unique points have been identified in Seek Limited in relation to the
provisions covered in the IAS 8 or AASB 108:
 There are various policies under the guidance and regulation of appropriate regulating authority.
These policies primarily include SSEK’s equal opportunities policies, environmental policies,
whistleblowers policy along with governmental policies. The unique feature of these policies is
that some of these policies are statutory and accordingly needs to be strictly followed or adhered
to.
 The concerned company has entered into a contract with the PricewaterhouseCoopers regarding
the provision of consultancy service ignoring the audit services. These services are in additional
to the statutory audit services and will help the top level management in the decision making
process. Also, it will help to improve the overall quality of services as well as the products in
which the concerned business enterprise is engaged.
 The directors’ report has been framed in such a manner that it can help and assist the user of the
report to gain a complete understanding of the policies pertaining to the remuneration. All the
provisions are in accordance with the relevant applicable Companies Act and will help to achieve
the accomplishment of strategies and financial performance (Nuhu, 2014).
Apart from that, the business enterprise has applied accounting estimates in several financial
variables. The major variable includes the tax liability that needs to be paid. All the applicable
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measures have been taken to ensure that the financial assumptions are free from any material or
accounting error. Till now, there is no change in the accounting policy of Seek Limited.
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Task 3
As per the Annual report of Seek Limited for the year ended 30th June 2018 following finding
researched as below:
 Depreciation Amount: As per the consolidated income statement of Seek Limited for the year
ended 30th June 2018, it has been found that the company has incurred depreciation and
amortization expenses of $67.6 million in the year 2018 and in 2017 the amount of depreciation
expenses was $53.4 million.
 Cost of Plant and Equipment: As per the Consolidated Balance Sheet of Seek Limited as at 30th
June 2018, it has been depicted that under the non- current assets head, the book value of plant
and Equipment on 2018 it was $39.5 million whereas in 2017 it was $29.1 million.
 Impairment: The Seek Limited has incurred impairment loss of $ 181.7 million in 2018 whereas
such losses are comparatively less in 2017 of $16.1 million as shown in the consolidated income
statement of Seek Limited for the year ended 30th June 2018 (Nuhu, 2014).
 Revaluation: The Seek Limited has created an investment revaluation reserve account in the year
2018 amounting $2.3 million whereas this investment revaluation reserve has not been created in
the year 2017 as per their notes 19 subparts (b). These revaluation reserves are created to record
their changes in their value of an investment in the equity shares that are being invested for the
long term basis, not for the trading purpose. Moreover, it is being used to show losses and gains
in their investment in other comprehensive income statements for the year ended in 2018.
 Depreciation Period: As per the Australian taxation office guidelines for the year 2018, that
depreciation should be calculated for the period 1st July 2017 to 30th June 2018. Moreover, it
helps in the assessment of companies registered office in Australia to claim depreciation
deduction while filing their tax return to the Income Tax Authority of the Australian government.
The Seek Limited as adopting the Australian taxation authority guidelines for the year from 1st
July 2017 to 30th June 2018 for claiming deduction on depreciating assets as well as on capital
expenditure while filing a tax return of the financial year 2017-18.
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Conclusion
It can be concluded that there are different perception of the financial performance of a business
entity and every stakeholder measures the performance on different criteria. Different
stakeholder can assign varied weightage or priority to different parameters or criteria. It will be
helpful if the reader or user of the report has taken the necessary assumption while reaching on
the overall conclusion on the basis of this prepared report.
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References
 (• Box), 2015. Time series analysis: forecasting and control. John Wiley & Sons.
 GOV AU, A., 2018. Glossary of defined terms. [Online]
Available at: (Glossary of defined terms, 2019)
 Myšková, R., 2017. INTRODUCTION. (Myskova, 2017). Vol.10, No.4,pp 97.
 (• Noreen, 2014). Managerial accounting for managers. New York: McGraw-Hill/Irwin.
 Nuhu, M., 2014. Shareholders/Owners. Role of Ratio Analysis in Business Decisions.
 Seek, 2018. Seek Limited. [Online]
Available at: (Seek Annual report)
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