Financial Accounting and Analysis Report: Annual Report and Analysis

This report provides a financial accounting and analysis of Treasury Wine Estates' annual report for the year ended June 30, 2016. It examines key accounting items, including accounts receivable and plant, property, and equipment, detailing their values and changes from the previous year. The report discusses the importance of these items in assessing a company's financial health, liquidity, and ability to generate sales. It further explores the social impact of these items, considering the effects of receivables on a company's solvency and the environmental and societal consequences of asset depreciation. The reflection section notes the company's adherence to accounting standards, the components of its financial statements, and the absence of a sustainability report. The report concludes that the financial data provided is useful for stakeholders to assess the company's performance.

Running head: FINANCIAL ACCOUNTING AND ANALYSIS
Financial accounting and analysis
Name of the student
Name of the university
Author note

1FINANCIAL ACCOUNTING AND ANALYSIS
Table of Contents
Task two.....................................................................................................................................2
1. Accounting items from the annual report........................................................................2
1. Importance of accounting items on annual report...........................................................3
2. Social impact of accounting items..................................................................................3
3. Reflection of annual report..............................................................................................4
References..................................................................................................................................5

2FINANCIAL ACCOUNTING AND ANALYSIS
Task two
1. Accounting items from the annual report
Accounting receivable – looking at the annual report of Treasury wine estates for the year
ended 30th June 2016, it is found that the amount of account receivable for that year were
amounted to $ 603.4 million and that was decreased from $ 504.9 million for the year 2015.
The trade receivables of the company are recognised at the fair value initially and
eventually it is calculated at the amortised cost, reduced by the allowance of the doubtful
debts. The company generally allow 30-120 days credit based on the transaction nature.
Further, the bad debt is allowed for reducing the carrying amount of the trade receivables on
the basis of the outstanding amounts analysis at the reporting date where potential risk is
found with regard to credit (Mathuva 2015).
Plant, property and equipment – looking at the annual report of Treasury wine estates for the
year ended 30th June 2016, it is found that the amount of account receivable for that year were
amounted to $ 603.4 million and that was decreased from $ 504.9 million for the year 2015.

3FINANCIAL ACCOUNTING AND ANALYSIS
The property, plant and equipment of the company are recognised at the fair value
initially and eventually it is reduced by the impairment loss, if any and accumulated
depreciation (Hoskin, Fizzell and Cherry 2014). The depreciation is provided on the straight
line method. The leased assets are written of over the useful life or term of lease whichever is
lower. During the year no changes were made with regard to the depreciation.
1. Importance of accounting items on annual report
Accounts receivable – account receivable is the money that is expected to be received by the
company in future. Depend on the amount of receivable it can be assessed that whether the
company is able to pay-off its short term obligation comfortably. Further, it reveals whether
the company is able to generate sales to earn profit (Bruce-Twum and Mensah 2015). If very
large amount is shown in the balance sheet it indicated that the company is not able to collect
its dues on time or not as the dues for long time increases the risk of bad-debts.
Plant, property and the equipment – this is one of the most useful items under the balance
sheet and it assists in getting the idea of regarding how intensive the assets is and the
particular business model it follows for plant, property and equipment (Zack 2013). When the
balance sheet of various companies are analysed under a specific industry or sector, the plant,
property and equipment of the company are compared with the after tax profit in terms of
dollar (Tweglobal.com/~/media/Files/Global/Annual-Reports/2016-Annual-Report.pdf
2017). If the business is more productive, it may indicate that the company’s PP&E is lower
as con pared to the cash balance.
2. Social impact of accounting items
Accounts receivable – if the societal impact is considered, receivables will be regarded as
important item as it helps the society analyse the liquidity position of the company. If the
company is not able to collect its dues on time the chances of bed-debts will go up which may

4FINANCIAL ACCOUNTING AND ANALYSIS
even lead to dissolve of the company. Further, the company from whom the dues is to be
received will be regarded as not efficient for investment.
Plant, property and equipment – it will have a big impact on the society if the company is not
providing appropriate depreciation on the asset and the asset is in use even after the useful
life of the asset got over, it may adversely affect the environment as well as the society.
Further, the type of asset may have adverse impact on the society and the community under
which the business operates.
3. Reflection of annual report
While analysing the annual report of Treasury Wine Estate for the year ended 30th
June 2016, I found that the company prepares its financial statement based on the
Corporation Act 2001 and the authoritative pronouncement in compliance with the AASB
(Australian Accounting Standards Board). Further, the items are measured on the basis of
historical cost except for some of the derivative instruments related to finance. I also found
that the annual report of the company includes consolidated profit or loss account and the
other comprehensive income, consolidated financial position report, consolidated changes in
equity report and consolidated cash flows report. The report also includes the independent
auditor’s report, director’s report and director’s remuneration report. The audit of the
financial statements for the year ended 30th June 2016 was carried out by KPMG.
While going through the annual report, I found that the report did not include any
sustainability report, without that report the economic, social, governance and environmental
performance of the company cannot be assessed. Further, the values were presented only in
monetary terms. Moreover, the assets under balance sheet do not specify the factor that which
of the asset can be sold and which are not.

5FINANCIAL ACCOUNTING AND ANALYSIS
However, I found that the reports present clear data regarding the financial position of
the company through consolidated profit or loss account and the other comprehensive
income, consolidated financial position report, consolidated changes in equity report and
consolidated cash flows report, it will be useful to the investors, creditors, and the lenders to
assess the performance of the company.

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References
Bruce-Twum, E., and Mensah, C. C. 2015. Financial Statement Analysis.
Hoskin, R.E., Fizzell, M.R. and Cherry, D.C., 2014. Financial Accounting: a user
perspective. Wiley Global Education.
Mathuva, D., 2015. The Influence of working capital management components on corporate
profitability.
Tweglobal.com/~/media/Files/Global/Annual-Reports/2016-Annual-Report.pdf. (2017).
Annual report 2016. [online] Available at:
https://www.tweglobal.com/~/media/Files/Global/Annual-Reports/2016-Annual-Report.pdf
[Accessed 13 Sep. 2017].
Zack, G.M., 2013. Financial Statement Analysis. Financial Statement Fraud: Strategies for
Detection and Investigation, pp.209-213.