A Comprehensive Analysis of Contemporary Accounting Issues at Westpac

This report provides a comprehensive analysis of Westpac Banking Corporation, focusing on contemporary accounting issues and the company's financial performance. The study examines Westpac's share price movements, financial reports (income statements and balance sheets), and media releases to assess the company's overall financial health. The analysis covers a two-year period, highlighting the impact of the COVID-19 pandemic and economic downturn on Westpac's performance. The report also explores the company's strategic responses, including technological advancements, customer support initiatives, and community contributions. The conclusion and recommendations emphasize the importance of debt management, solvency, and liquidity to sustain market position and optimize long-term debt liabilities. The report underscores the significance of accounting in evaluating corporate performance and offers insights into Westpac's current financial standing and future prospects.

Contemporary Issues
In Accounting

EXECUTIVE SUMMARY
The study summarises major concepts and issues on contemporary accounting
in relation to Westpac, an Australian Banking Corporation. Study report consists of thorough
review of corporation's financial performance in market with help of analysis of company's share
price trends, financial-reports, media resources-comments, company releases and some other
major sources. Main aim of such critical review of Westpac is to determine financial
performance of company and make recommendations to enhance performance based on current
financial status.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
Company Overview:...............................................................................................................4
Analysis of Westpac's Performance:......................................................................................5
CONCLUSION AND RECOMMENDATIONS..........................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Accounting relates to a method of systematically reporting, evaluating and transmitting
information regarding fiscal transactions. Anybody who takes a business decision utilizes
accounting information for guiding them. Accounting is very essential since this is the language
of businesses as well as is core base of informed financial decision making. Without the process
of accounting, executives would not recognize which items would be profitable, which
management decisions are the correct ones, as well as whether business is making profits
(Warren, Jonick and Schneider, 2020). The study covers major aspects of contemporary
accounting in the context of Westpac Banking Company by reviewing the share price of
corporation for recent 2 years, financial reports, corporation releases, media-comments and other
key information sources.
MAIN BODY
Company Overview:
Westpac corporation is Australia's first banking and oldest corporation, one of
the Australia's big four banking organizations as well as New Zealand's leading bank. Westpac
offers a wide variety of individual, corporate institutional banking and investment management
facilities across a variety of financial services products and businesses. The corporation operates
in a variety of segments, such as with customer, Business, Westpac Institutional Bank (WIB)
and as Westpac-New Zealand. The Consumer segment is responsible for distribution and
services to customers throughout Australia. Business segment offers corporate banking as well
as wealth services and product lines to consumers along through Australia. WIB provides a wide
variety of finance products and facilities to industrial, corporate , institutional as well as Govt.
clients functioning in or connected to Australia as well as New Zealand. While Westpac New
Zealand is accountable for the selling and distribution of banking, investment and insurance
services to individuals, corporate and institutional clients throughout New Zealand (Westpac
Banking Corporation: About us, 2020).

Analysis of Westpac's Performance:
Share Price:
As on 18/06/2020, Westpac's share are trading at 17.2 which on 05/01/2020 was trading
at 24.65. In company's share there was a major decline after Feb 2020 due to downturn in
economy after corona outbreak but after that there is steady improvement in share price of
company. This steady and uneven improvement in share price is due to government policies to
boost banking sector performance (Westpac Banking Corporation: Share Price Movements,
2020).
Financial Report Materials:
Income Statements:

From analysis of financial statements of Westpac Corporation this has been reviewed that
company's overall turnover has been declined from AUD 22152 million (2018) to AUD 20631
million (2019). Company has reported turnover of 21,506 million, 20,954 million and 20596
million in year 2017, 2016 and 2015 respectively. Net profits before preferred of company are
6784 million, 8095 million, 7990 million, 7445 million and 8006 million in year 2019, 2018,
2017, 2016 and 2015 respectively indicating an overall decremental trend in company's
profitability position. EPS of corporation in year 2019 is 1.97 which was 2.38 in year 2018
reflecting a major decline in EPS of company (Annual Report of Westpac, 2019).
Balance Sheet:
Company has reported cash funds of 20059 million in year 2019 which was 27786
million in year 2018, while in year 2017, 2016 and 2015 it was 19445 million, 18405 million
and 16079 million respectively. There is major decline in cash fund level after 2018. Long term
debts of company has been increased to 213167 million in year 2019 which was 189861 million
in year 2018. While in year 2015, 2016 and 2017 it was 182,792, 183,574 and 184,436
respectively. This incremental trend in long term debt obligations of corporation shows that

company's long term liquidity position is not good. Stockholder's fund has also been increased
slightly to 65454 million in year 2019 which was 64521 million in year 2018. Form 2015 to
2019 stockholder's fund has been increased which shows that company's net-worth has been
enhanced (Robinson, 2020).

Overall review of financial reports of Westpac corporation this has been analysed that
company's performance has been declined majorly in year 2019 primary due to effects of
downturn in sector after lock down and corona-virus outbreak. But it is expected that in long run
company will attain past performance level. Increasing debts and NPA is main concern for
corporation but this is expected to be short-term. Company's market position is good and
investors still showing trust on corporation.
Media Release:
Analysis of Media Release provides a thorough review of corporation's present and
potential steps in business. In this regard following is review of several dare wise major media
releases reported by company Westpac (Media releases. 2020), as follows:
17 August 2020: Westpac announced that Christopher Lynch will be named to Westpac Board
with effect from 1 Sep 2020. Chris's previous executive role was CFO of the Rio Tinto,
headquartered in London, and before this Chris was CEO of company Transurban. Chis also

carried a range of high ranking leadership roles at BHP, also Group President, Company Carbon
Steel Materials.
10 August 2020: With an increase in scams designed to target its customers since start of the
COVID-19 disease outbreak, Westpac is going to take further measures to safeguard its clients
by introducing new scam-detection technology throughout its bank branches. New technologies
can deliver real-time notifications to Westpac 's workers when payments are handled so that
fraudulent transactions could be detected and examined on-the-spot. This move would help to
protect consumers from losing money to scams and frauds.
5 August 2020: The Westpac has announced that it would proactively approach merchant clients
to enable Merchant Choice Routing (MCR) – also known as least cost routing – that believe
would benefit from switch depending on their existing use. Westpac 's decision would allow
merchant customers of Westpac-owned ports to enable pricing which is better for them, offering
them a little less to think about at quite a difficult time. It is predicted that close to around
37,000 smaller firms would be well off.
28 July 2020: Westpac has announced the formation of new Group Operations Department,
putting combined Group Operations as well as group technologies, and named Scott Collary to
head this section as Chief Operating Official ( COO). Mr. Collary joined Westpac from Bank of
Montreal , Canada, whereby he has been Chief Information as well as Operations Executive
for North American Personal & corporate banking, Private Securities and International Asset
Management units. Previous to that, Mr. Collary held executive roles at ANZ including
Citigroup.
8 July 2020: Westpac provided new support for home loans and small company clients for loan
forbearance programs that appear to have a major effect on the COVID-19 disease outbreak. The
plan provides more assistance for consumers that aren't in financial situation to restart their
complete loan repayments by end of September. COVID-19 epidemic continues to have fast-
changing effect in Australia, and company know that, for some consumers, it'll have longer-term
influence on their situations and more financial assistance will be needed.
29 June 2020: The Westpac Foundation will focus on providing much-needed funding for over
100 local organizations providing employments, training and skills assistance to a few of
the Australia's most vulnerable. For most Australians facing job losses or decreased working
hours as a result of COVID-19, a sum of 2.25 million in donations is intended to help such

organisations maintain their operations and strive to create job opportunities for people
desperately in need.
24 December 2019: Westpac has announced that company's Disaster Relief Program is
accessible for customers suffering financial distress as a result of extreme bushfires throughout
South Australia. Jane Watts, Westpac Managing Director, stated that Westpac's Disaster Relief
platform is now accessible and provides immediate practical assistance to help people with their
financial situation.
Overall review of company and media release this has been analysed that recently
company has introduced technology based services to customers. During Corona-virus disaster
corporation has taken helpful steps to support their customers, made donations and provided
financial assistance to small business enterprises.
CONCLUSION AND RECOMMENDATIONS
From above study this has been articulated that accounting is main aspect of business
which help to determine the actual performance of corporation. Review of financial performance
of Westpac Corporation shows that company is performance has been declined in at the end of
2019 because of corona-virus-outbreak and economic downturn, but still company performed
well and generated profits. Although there is major decline in profitability but improvement in
share price shows that company will perform better in coming years.
Based on above review of facts and information, here it has been recommended to
company that it should focus on debt recovery to sustain market position and optimise their long
term debt liabilities as to improve solvency and liquidity position. Company should restructure
debts provided by it clients. Further company has to modify their long and credit policies to
control NPAs.

REFERENCES
Books and Journals:
Warren, C., Jonick, C. and Schneider, J., 2020. Accounting. Cengage Learning.
Robinson, T.R., 2020. International financial statement analysis. John Wiley & Sons.
Online:
Media releases. 2020. [Online]. Available through: <https://www.westpac.com.au/about-
westpac/media/media-releases>
Annual Report of Westpac. 2019. [Online]. Available through:
<https://www.westpac.com.au/about-westpac/investor-centre/financial-information/
annual-reports>
Westpac Banking Corporation: About us. 2020. [Online]. Available through:
<https://www.westpac.com.au/about-westpac>
Westpac Banking Corporation: Share Price Movements. 2020. [Online]. Available through:
<https://au.finance.yahoo.com/quote/WBC.AX?p=WBC.AX&.tsrc=fin-srch>