Afnr315 Advanced Financial Reporting Answers Assessment Answers
Questions
Every group for this assignment is required to select any four public listed companies, two from manufacturing industry and two from mining industry, in the Australian Stock Exchange Group members will then obtain the latest available annual report for each of their companies from the internet. Groups will be asked to submit a group report that analyses and compares the four companies on several accounting issues to be advised later.
- Hint: The two companies can be from the same industry (Coles and Woolworths) or from different industries (Delta mining and BHP Billiton).
- You have to be prudent and pragmatic on selecting the companies. They have to be large, substantial and must have available information for desk research. You are required to explore and collect information on the companies to complete this assignment. Substantial desk research is also required for this written report.
It is highly expected from you to demonstrate the following perspectives in your report:
- Introduction of the two selected companies
- Company’s name
- Establishment year
- Main activities
- Products or services
- Organizational structure
- Business achievement
- What differences and similarities exist in the revenue recognition of the selected companies?
- What similarities and differences exist in asset recognition of the selected companies?
- What differences and similarities exist within the liability recognition among the selected companies.
Answer:
Introduction
This essay is set to explore our understanding of the accounting lessons by engaging in practical evaluations of the financial issues of the companies listed on the stock exchange. This report displays a comparison analysis of both the mining and manufacturing industries. The four companies of choice include Evolution Mining, Lysaught, BlueScope, and UGM Company. Evolutionary Mining is a gold mining company with a vertical organizational structure. The company has achieved a good reputation for maintaining consistency and reliability. The company was established in 2011. UGM is a coal mining company established in 1997 with a vertical organization structure. The company has achieved a reputation for delivering cheaper, consistent and reliable products. Lysaught is an international company in the production of corrugated iron sheets. The company was beginning in 1857 and has a vertical organization structure. The company has potential experts who have greatly promoted its competitive advantage. Finally, BlueScope is a steel manufacturing company established in 1915 with a vertical organizational structure. The company has been successful in venturing into partnerships with both customers and other companies in the market area. Detailed discussion on the companies is documented in chapter six of this report. This essay is set to display a detailed evaluation of the financial issues (Asset, Revenue, and Liabilities recognition) of the mentioned companies.
Objectives
- To provide a brief description of the selected companies
- To compare and contrast the revenue recognition of the selected firms
- To compare and contrast the asset recognition of the selected firms
- To compare and contrast the liability recognition of the selected companies
Data Collection Methods
This research made use of the qualitative methods of data collection and analysis. Majorly, the information was collected from the internet using resources such as laptops, computers, and smartphones. The group conducted online surveys regarding the current condition of the companies on the relevant company officials. The major data collection method employed was reading through the documents and records presented on the company websites. Furthermore, the group used interviews by conducting on of the accountants of the company. The information collected was then critically analyzed among the group members to find out the differences and similarities regarding the relevant accounting issues among the selected companies.
Company Description
This report presents a critical evaluation of four companies listed on the stock exchange. The primary areas of focus are the mining field and the manufacturing sector. The two companies chosen from the mining field include Evolution Mining and the UGM Company. The other two companies from the steel manufacturing sector include Lysaught and BlueScope.
Evolution Mining is popular for gold mining in Australia (Evolutionmining.com.au. 2018). The company operates five mines which include Mungari, Mt Rawdon, Cowal, Cracow, and Mt Carlton. The company was established in late 2011 as a leading gold producer in Australia. Even though the company has majored in the mining of gold, pieces of literature haven't hesitated to mention the contribution of the company in the mining of other products such as copper and silver in Ernest Henry. The company has a reputation of being consistent and reliable in its operations. The company has a vertical organization structure whereby a board of directors is led by an executive chairman followed by a financial director before going down the line to the non-executive director members. Also, the company is made up of a leadership team and a corporate governance committee. The major achievements of the company include sustainability and consistency. Aspects under which sustainability is defined within the firm including but not limited to people’s safety, maintaining good health and wellbeing among the workers, promoting the cultural operations in the society and exercising corporate social responsibility to the entire community including environmental conservation.
UGM Australia is an international mining company popular for coal production in Australian. The company was established in 1997 to provide conveyor sustenance services to the NSW coal mining industry (Anz.businesschief.com. 2018). UGM has since establishment developed systematically as a leading firm in the provision of a wide range of services internationally in the mining industry (Crunchbase. 2018). The company has been on the forefront in the provision of flexible training services and support to other mining companies situated in Australia. Furthermore, the company has developed a wide industry reputation for developing cheaper, effective and reliable correlation with the customers. Not only does the company support other firms in the mining industry but also some of the government entities in Australia. The company has a vertical organization structure led by a Chief Executive Officer (Poul Hartcher). Additionally, the company is headquartered in Australia which is the reference point for all the operations in other branches of the company.
Lysaught is a manufacturing company for the corrugated iron sheets. The company was established in 1857 by John Lysaught who saw the potential in the exportation of corrugated iron sheets into Australia under the brand name Orb (lysaght.com. 2018). Currently, the company is diversified in products such as gutters, purlins, fences, roofing, walling home development, and structural formwork products. The company serves clients from more than 30 locations in Australia. Lysaught is committed to deliver genuine products and helpful services including the client support services. The company has achieved in possessing experts who have greatly contributed to the good reputation of the firm. The company has been trusted for more than one hundred and fifty years for the production of quality steel. The organization structure of the company is vertical under the leadership of a chief executive officer down the line to the clients.
BlueScope is a steel manufacturing company in Australia established in 1915. The company is strategic at enhancing innovation, technology, and expertise at international levels. The company has been successful in venturing into partnerships not only with the other firms in the steel manufacturing industry but also with the customers of the products. The company is the international leader in the production of the premium branded coated and painted steel products. The BlueScope company has a vertical organizational structure led by a chief executive officer (Pat Finan) (Bluescope.com. 2018). Furthermore, the company is headquartered in Australia from where all the other branches in international locations such as the United States of America and China refer.
Analysis Summary Table
|
Revenue recognition |
Asset Recognition |
Liability recognition | |
|
Evolution Mining |
The company recorded revenue covers the financial year from 30th June 2017 to 30th June 2018. The revenue from ordinary activities increased from 1479876 thousand US dollars to 1540433 thousand US dollars (Evolutionmining.com.au. 2018). |
The company recorded Assets covers the financial year from 30th June 2017 to 30th June 2018. The net tangible assets increased from 1.25 thousand US dollars to 1.35 US dollars. |
The company recorded liabilities covers the financial year from 30th June 2017 to 30th June 2018. The total liabilities decreased by 6% to $767.9 million compared to the 2017 value. |
|
UGM-Australia |
The fiscal year of the company starts in January and ends in December the company recorded total revenue of $296,366 in 2017 (Leonard, 2018). |
The fiscal year of the company starts in January and ends in December The company recorded a total asset of $60,508 in 2017 |
The fiscal year of the company begins in January and ends in December The company recorded a total liability of $16,720 in 2017 |
|
Lysaught |
The fiscal year of the company starts from January to December The company has recorded total revenues amounting to 90,809.6 thousand MYR in the 2017 fiscal year. The total sales growth percentage is 38.85% |
The fiscal year of the company starts from January to December The company has recorded an increase in total assets by 11.50%. the 2017 total asset value is 152,092.9 thousand MYR |
The fiscal year of the company starts from January to December The company has recorded 10,579.5 thousand MYR liability value in the 2017 fiscal year. The total liabilities have increased by 6.96% |
|
BlueScope |
BlueScope fiscal year began on 30th June 2017 and ended in 30th June 2018 The total revenues of the company from the continuing operations rose by 9% from 10,529.8 M (2017) to 11,497.8 M (2018) |
BlueScope fiscal year began on 30th June 2017 and ended in 30th June 2018 The total net tangible assets of the company rose by 30% from $6.06 per share (2017) to $7.90 per share (2018) |
BlueScope fiscal year began on 30th June 2017 and ended in 30th June 2018 the total liabilities of the company reduced from 127% from a net debt of $232.2 M to a (cash) of (&63.6M) |
Revenue Cognition Analysis
Revenue cognition refers to the process of recording the revenues of a business operation in the books of the company in the right period. Usually, there are two types of revenue recognition in the business operations. The two strategies include the cash or the Accrual basis of accounting. The Cash basis occurs when revenue is recorded upon receiving cash from the customer or merchandise regardless of whether the service will occur in the future or not (Helstrom, 2018). On the other hand, the accrual recognition takes a case whereby revenue is only recorded when a service has been performed. Following the companies in question, annual revenues of the BlueScope company are calculated and recorded on the similar date as those of the Evolution Mining company as the fiscal years of the two companies end on the same date 30th June 2018. The scenario differs in UGM- Australia and Lysaught whose budgetary year begin in January and end in December. All the four companies express an increase in the total revenue. However, Lysaught has revealed the most significant increase in revenue while UGM-Australia has recorded the lowest value.
Asset Recognition Analysis
Asset recognition refers to the process of recording the asset values in the respective books of account in the right period. The total annual assets of BlueScope are recorded on a similar date as those of the Evolution Mining Company. Similarly, the annual assets of UGM-Australia are calculated and recorded on the similar date as those of the Lysaught Company. All the four companies have recorded an increase in the total assets with the BlueScope displaying the highest percentage increase whereas UGM-Australia presenting the lowest percentage increase.
Liability Recognition Analysis
Liability recognition refers to the process of recording the total liability values in the respective financial statements during the right period. The annual total liabilities of BlueScope are recorded on a similar date to those of the Evolution Mining Company. Similarly, the annual total liabilities of UGM company are calculated and recorded on the similar date as those of the Lysaught Company. BlueScope, UGM-Australia, and Lysaught have increased its total liabilities with BlueScope Company recording the highest percentage increase. On the other hand, Evolution Mining has recorded a decrease in the total liabilities of the company.
Recommendation and Conclusion
This research is recommitted for development to exploit all the companies in the manufacturing and mining industry. This research has faced a challenge of word count limit and a limited schedule of carrying out the study. However, the project is legally recommended for future researchers. The information in the research can be used for future research. Finally, the success and completion of this research project originated from the cooperation and integration of the group members.
References
Anz.businesschief.com. (2018). The UGM Group: Cost-effective options for coal producers. [online] Available at: https://anz.businesschief.com/the-UGM-Group/profiles/87/the-UGM-Group:-Cost-effective-options-for-coal-producers [Accessed 10 Sep. 2018].
Bluescope.com. (2018). Executive Team - BlueScope Corporate. [online] Available at: https://www.bluescope.com/about-us/executive-team/ [Accessed 10 Sep. 2018].
Counsell, D. (2018). Compliance with Listing Rule 4.3A for the twelve months ended 30 June 2018. [online] S3-ap-southeast-2.amazonaws.com. Available at: https://s3-ap-southeast-2.amazonaws.com/bluescope-corporate-umbraco-media/media/2425/fy2018-full-year-appendix-4e-directors-report-and-financial-report.pdf [Accessed 10 Sep. 2018].
Crunchbase. (2018). UGM Australia | Crunchbase. [online] Available at: https://www.crunchbase.com/organization/ugm-australia#section-overview [Accessed 10 Sep. 2018].
Evolutionmining.com.au. (2018). CREATING AUSTRALIA’S PREMIER GOLD MINING COMPANY. [online] Available at: https://evolutionmining.com.au/wp-content/uploads/2017/11/Evolution-Mining-Annual-Report-2017_F2.pdf [Accessed 10 Sep. 2018].
Evolutionmining.com.au. (2018). Evolution Mining – Australian Gold Company. [online] Available at: https://evolutionmining.com.au/# [Accessed 10 Sep. 2018].
Helstrom, K. (2018). The Effects of Revenue Recognition on Financial Statements. [online] Smallbusiness.chron.com. Available at: https://smallbusiness.chron.com/effects-revenue-recognition-financial-statements-57683.html [Accessed 10 Sep. 2018].
Leonard (2018). WFA Annual Report - FINAL. [online] Slideshare.net. Available at: https://www.slideshare.net/NedLeonard1/wfa-annual-report-final [Accessed 10 Sep. 2018].
lysaght.com. (2018). ABOUT LYSAUGHT. [online] Available at: https://www.lysaght.com/about-us/about-lysaght [Accessed 10 Sep. 2018].
Quotes.wsj.com. (2018). LYSAGHT.MY Annual Income Statement - Lysaght Galvanized Steel Bhd - Wall Street Journal. [online] Available at: https://quotes.wsj.com/MY/XKLS/LYSAGHT/financials/annual/income-statement [Accessed 10 Sep. 2018].
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