country
$20 Bonus + 25% OFF
Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

Accounting For Business Combinations: Financial Reporting

tag 0 Download5 Pages / 1,192 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT

Question:

Discuss about the Accounting For Business Combinations for Financial Reporting.

 

Answer:

General

According to AASB 8, the purpose of the segment reporting of a business information is to aid the users of financial statement in making better understanding post analysis and better assessment of the enterprise’s performance both past and future relating to its various segments.

Segment reporting, therefore, helps the stakeholders of the business including the users like investors in having a better understanding of the business’s performance; detailed assessment of the risks and returns relating to enterprise true and fair presentation; and making smart as well as informed investment judgments as a whole (Kang and Gray, 2013). On the other hand, detailed presentation of segment-wise information may prove to be detrimental and misleading at times to the investors and users with lack of understanding of a financial aspect of business information, failing to understand the wholesome view based on the fragmented information.

The considerable cost has to be incurred for development, preparation and providing of segment reporting, in terms of the costs of collection of information, processing of information, audit and spreading of the final segmented information, which will depend on the existing management control system. This may mostly attract foreign, competitor’s, governmental and investor’s scrutinizing efforts, which may actually outweigh the cost.

The management approach means external reporting purposes of entity’s business and geographical segments which may need reporting of segment financial information constant with the ways of management of businesses, looking to their organization as well as management structure along with its internal financial reporting system.

The adoption of this approach is based on the way of organization of segments by the management within the public entity for operating decision making and performance assessment in a cost-effective as well as timely manner (Choudhary and Ghorai, 2016). This also provides users to see the financials from the management’s point of view, resulting in better communication coordination of future decisions on prospective future plans.

Well, segment reporting may result in a lot of private information disclosure to its users and competitors. This may reveal to the public at large including the competitors as well the government, the more profitable segments which may result in more stringent competitive rivalry strategic tantrum from competitors and more indulgence of compliance regulations from governmental departments (Kang and Gray, 2013). The lower performing segments may even make the picture of the business little unattractive in eyes of investors, more negotiable bids from business dealings and fall in entity’s stock prices.

Where segment reporting deals with the presentation of financial information relating to different product, services or geographical areas of a business, consolidated accounting presents information of various subsidiaries, joint ventures, associates of a business as one (Kang and Gray, 2013). AASB 8 presents financial information a fragmented and detailed manner whereas AASB 10 reports information of parent with its subsidiaries as a whole portraying a single picture.

It cannot be said that presentation of both segment reporting and consolidation accounts in the same financial report is paradoxical since both serve a different purpose for different users. Assessment of both forms of information is needed for an investor to make an informed decision (Birt and Shailer, 2011). The stakeholders will be in a better position for decision making when they have details of various segments and their performance in addition to combined financial data of parent business and its several subsidiaries and joint ventures.

 

Application

Global Value Fund Limited (GVF) is an investment company is engaged in making investments in worldwide securities. The establishment of the company was with a vision to provide stockholders with an prospect of making investment in in international financial markets. They do this by creating a judiciously built portfolio of financial assets which were trading at a discount in comparison to their underlying value, which is their principal activity (Bugeja, Czernkowski and Moran, 2015). The Company has appointed an investment manager named Metage Capital Limited, specializing in assets trading purchase at a discount to their intrinsic value, by making use of proprietary systems and strategies, at hand at the time of purchase. The portfolio comprises mostly of equities and closed-ended funds, listed on various international exchanges and cash deposits denominated in foreign and domestic currencies. The approach of the companies is to deliver higher risk-adjusted returns in comparison to outmoded methods of international equity investment.

The Company’s Annual Report for the year ended 30 June 2016, reports that it has a single reportable segment. Global Value Fund Limited (GVF), is engaged in investment activities only. GVF derives revenue from the sale of its investments, dividend income and interest income, with foreign exposure due to investment in companies operating internationally (Global Value Fund Limited. Annual Report for the year ended 30 June 2016, 2016).

The annual report disclosing information about segment revenue, expense, assets, and liabilities, is in a consistency with disclosure requirement relating to operating segment and reportable segment stated in AASB 8 (Katselas, Birt and Kang, 2011). Since the Company has a single reportable segment, it discloses all the revenue that is generated gains on disposal of assets, market value movement of investments, foreign exchange movement, interest income and dividend income. The company has subsequently made disclosure of expenses in relation to revenue in its statement of Profit and Loss and other comprehensive income (Global Value Fund Limited. Annual Report for the year ended 30 June 2016, 2016). In addition, the company discloses its assets including cash, trade receivables, financial assets and deferred tax assets; and liabilities including trade payables, current tax liability and deferred tax liability.

There might occur differences in a total of reportable segments from consolidated figures due to alterations in accounting procedures and apportionment of costs ocurred centrally. Fluctuations from previous periods in the methods of measurement and the effect of those changes shall be disclosed. Therefore, IFRS 8 necessitates reconciliation among a total of the reportable segment revenues, total assets, total profit or loss, and other amounts of which disclosure has been provided for reportable segments to the consequent amounts in the final financial statements (Kang and Gray, 2013). An audit trail among the managerial accounts and the consolidated financial information will suffice a lot of requirement of differences.

 

References

Birt, J. and Shailer, G., 2011. Forecasting confidence under segment reporting. Accounting Research Journal, 24(3), pp.245-267.

Bugeja, M., Czernkowski, R. and Moran, D., 2015. The impact of the management approach on segment reporting. Journal of Business Finance & Accounting, 42(3-4), pp.310-366.

Choudhary, R.P. and Ghorai, S., 2016. Segment Reporting Practices in India: Impact of IFRS 8 During Transition Period. The MA Journal, 51(10), pp.35-49.

Global Value Fund Limited. Annual Report for the year ended 30 June 2016. 2016. [Online]. Available through < https://www.globalvaluefund.com.au/wp-content/uploads/2017/04/20161021_GVF_Annual-Report_June_2016.pdf>. [Accessed on 12th October 2017].

Kang, H. and Gray, S.J., 2013. Segment reporting practices in Australia: Has IFRS 8 made a difference?. Australian Accounting Review, 23(3), pp.232-243.

Kang, H. and Gray, S.J., 2013. Segment reporting practices in Australia: Has IFRS 8 made a difference?. Australian Accounting Review, 23(3), pp.232-243.

Katselas, D., Birt, J. and Kang, X.H., 2011. International firm lobbying and ED 8 operating segments. Australian Accounting Review, 21(2), pp.154-166.

OR

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2018). Accounting For Business Combinations: Financial Reporting . Retrieved from https://myassignmenthelp.com/free-samples/accounting-for-business-combinations-financial-reporting.

"Accounting For Business Combinations: Financial Reporting ." My Assignment Help, 2018, https://myassignmenthelp.com/free-samples/accounting-for-business-combinations-financial-reporting.

My Assignment Help (2018) Accounting For Business Combinations: Financial Reporting [Online]. Available from: https://myassignmenthelp.com/free-samples/accounting-for-business-combinations-financial-reporting
[Accessed 30 May 2020].

My Assignment Help. 'Accounting For Business Combinations: Financial Reporting ' (My Assignment Help, 2018) <https://myassignmenthelp.com/free-samples/accounting-for-business-combinations-financial-reporting> accessed 30 May 2020.

My Assignment Help. Accounting For Business Combinations: Financial Reporting [Internet]. My Assignment Help. 2018 [cited 30 May 2020]. Available from: https://myassignmenthelp.com/free-samples/accounting-for-business-combinations-financial-reporting.


MyAssignmenthelp.com is the perfect solution to render quality solution for all sort of academic issues. We have hired professionals from different fields of study to provide assistance with different subjects. We successfully have provided different types of assignment solutions on 100+ subjects. We have hired industry experts to deliver nursing assignment, hr assignment and finance assignment help. To offer quality content with IT assignments, we have hired IT professionals to render programming language assignment help and IT assignment help for other types of IT assignments as well.

Latest Accounting Samples

BUS103 Accounting For Managers : Team Assignment

Download : 0 | Pages : 4

Answer: Introduction: Different stores of JB Hi-Fi offer various types of electronic products; like leading brands of computers, TVs, Tablets, Speakers, Cameras, HI FI, Car Sound System, Home Theatre Sound System, Portable Audio systems and others. In addition, the company also offers various ranges of DVDs, games, Blu Rays, TV shows and others at cheap prices (jbhifi.com.au 2018). JB Hi-Fi measures their revenue based on fair value of the r...

Read More arrow Tags: Australia Robertson Management Dispute Management  University of New South Wales 

HA 3011 Advanced Financial Accounting Statements

Download : 0 | Pages : 10
  • Course Code: HA 3011
  • University: Holmes Institute
  • Country: Australia

Answer: Introduction: Bell Financial Group Limited Company has been given to make the analysis of the annual report of the company. The company is Australia based and listed on the stock exchange of Australia. The company is in into the business of broking, financial and advisory related services. For the purpose of the analysis of the impairment testing the company’s annual report of the company for the financial year ending 2016 has b...

Read More arrow

BAO3309 Advanced Financial Accounting 2

Download : 0 | Pages : 15
  • Course Code: BAO3309
  • University: Victoria University
  • Country: Australia

Answer: Introduction  This study deals with understanding the role of International Integrated Reporting Committee by referring to the IIRC websites as well as relevant accounting literature. In the next segment, explanation had been done to understand the potential roles of integrated reporting with regard to stakeholder engagement, comparability of reporting, quality of reporting, usefulness of reporting and users of reporting. The curre...

Read More arrow

HA 3011 Advanced Financial Accounting Assessment

Download : 0 | Pages : 10

Answer: Part A Requirement I In Toll Holdings Limited, impairment needs to be done when the market price of an asset is less than the value recorded in the balance sheet. As per the latest financial statements, one can observe that the corporation has used their business goodwill for the purpose to test impairment (competitiontribunal.gov.au, 2018). It needs to be mentioned that Toll Holdings Limited has complies with the require...

Read More arrow

AC4410 Accounting And Finance 2

Download : 1 | Pages : 10
  • Course Code: AC4410
  • University: University Of Central Lancashire
  • Country: United Kingdom

Answer: Introduction: Sky plc is a European media and telecommunication company which is situated in London, UK. The key products of the company are direct broadcast satellite, broadband, telephony services, broadcasting, pay television etc. the total revenue of the company was € 12.916 billion in 2017. Currently, 21 million subscribers are entertained by the company and 30,000 people are employed by the company (Home, 2018). The company...

Read More arrow
Next
watch

Save Time & improve Grade

Just share Requriment and get customize Solution.

question
We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits

1,323,991

Orders

4.9/5

Overall Rating

5,075

Experts

Our Amazing Features

delivery

On Time Delivery

Our writers make sure that all orders are submitted, prior to the deadline.

work

Plagiarism Free Work

Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.

time

24 X 7 Live Help

Feel free to contact our assignment writing services any time via phone, email or live chat.

subject

Services For All Subjects

Our writers can provide you professional writing assistance on any subject at any level.

price

Best Price Guarantee

Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.

Our Experts

Assignment writing guide
student rating student rating student rating student rating student rating 5/5

1896 Order Completed

95% Response Time

Herman Berens

MSc in Psychology

London, United Kingdom

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

285 Order Completed

99% Response Time

Eugene Baranowski

MBA in Supply Chain

London, United Kingdom

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

755 Order Completed

95% Response Time

Douglas Cowley

Masters in Finance with Specialization in Audit

Wellington, New Zealand

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

265 Order Completed

97% Response Time

Ken Campbell

MSc in Electrical Engineering

Wellington, New Zealand

Hire Me

FREE Tools

plagiarism

Plagiarism Checker

Get all your documents checked for plagiarism or duplicacy with us.

essay

Essay Typer

Get different kinds of essays typed in minutes with clicks.

edit

GPA Calculator

Calculate your semester grades and cumulative GPa with our GPA Calculator.

referencing

Chemical Equation Balancer

Balance any chemical equation in minutes just by entering the formula.

calculator

Word Counter & Page Calculator

Calculate the number of words and number of pages of all your academic documents.

Refer Just 5 Friends to Earn More than $2000

Check your estimated earning as per your ability

1

1

1

Your Approx Earning

Live Review

Our Mission Client Satisfaction

Very nicley done. Had no problems to get perfect marks. Will come back for sure for more help

flag

User Id: 289697 - 30 May 2020

Australia

student rating student rating student rating student rating student rating

Please don’t fluctuate after paying half amount. Fix it at starting. Thankful for your great work. I appreciate it.????????????

flag

User Id: 433795 - 30 May 2020

Australia

student rating student rating student rating student rating student rating

The answers were so clear and near perfect :D Just as my teacher wanted the answers to be. Also,, the APA style was awesome. Thanks a lot :)

flag

User Id: 435122 - 30 May 2020

Australia

student rating student rating student rating student rating student rating

I\'m having with the service. I like the way of delivery the content more importantly I\'m sure I ll get good grades

flag

User Id: 420078 - 30 May 2020

Australia

student rating student rating student rating student rating student rating
callback request mobile
Have any Query?