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It is an Australian banking Group Company which is established on 1st October 1951 when the bank of Australia merged with the union bank of Australia limited, there are ANZ is stand for Australia and New Zealand Banking group Limited. It is a fourth largest banking company in the Australia in relation to market capitalization after the commonwealth bank, Westpac banking corporation and National Australia bank. It is a largest entity in banking field into Australia; it becomes New Zealand Banking Company in 2012. It was known as ANZ National Bank Limited in 2003, during this period 2003 – 2012 it operated two brands in New Zealand, ANZ and National bank of New Zealand. Basically, the nature of business of the company is providing banking services to the public. This company is operated in thirty other nations. In 2007 the title was shared with another Australian bank.
It is also an Australian company which is established in Australia. It is a multinational retailer of furniture, computers and consumers electrical products. The headquarters of the company is situated in Australia, listed on ASX. There are 280 company owned and franchised stores in Australia. It has its own brand image in the market, opened their first store in 1961. Harvey and Norman first started their work through door to door services. Company has its own retailing stores in Australia and outside. It provide better knowledge to its consumers regarding the products and give satisfaction as well as. The nature of business is multinational retailing regarding home appliances includes furniture. Kitchen appliances, electrical equipment etc. and provide door to door services to the consumers in warranty period. Presently, it looking out for expansion opportunities in both Singapore and Malaysia. It provides most current products innovation and advancement from the leading brand.
Accounting principles are rules and guidelines which must follow by the company for better reporting of the funds. Accounting standards are basic rules for the better accounting. These are must be follow by the companies. If a company distributes its financial statements to the public, it is required to follow accounting standard in a proper manner. Generally accepted accounting principles become more complex because financial transactions have become more complex. There are following types of accounting principles are includes-
Matching principle: Matching principle is very popular concept in the field of accounting, because it matches the expense and revenue both. This type of accounting principle requires using accrual basis of accounting. The matching concept requires that expenses be matched with revenues i.e. expense is occurring as the sales are occurring. For example if a company give 1% bonus to its employees in January, 2016 then company book the bonus expense in December, 2015 as a liability, i.e. it becomes revenue in 2016 and expenses in 2015 (WEYGANDT, et, al, 2010).
Going concern principle: it is a very basic principle in accounting, this accounting principle assumes that company will exist in long run on continues basis to carry out its objective and commitments for which company is established. If accountant of the company analyses that company cannot survive for a long time then he must disclose this assessment. On the basis of this accounting principle company can carry forward its losses and prepaid expenses until future accounting period.
Revenue recognition principle: Under this method revenue are recognized as soon as a product has been sold or a service has been performed, regardless of the money has received actually.
Materiality principle: This principle is violate another accounting principle if an amount is insignificant. For assurance of an amount of insignificant or material professional judgment must be require (Rutherford, 2016).
AASB stands for Australian Accounting Standards Board. This is an Australian government agency that is responsible for development and maintenance of financial reporting standards that are applicable to all the private and public sector organizations of Australian economy. This also contributes to development of global financial reporting standards. The main aim of AASB is to set the principles for accounting for the companies in Australia and to provide guidelines of accounting to Australian companies. It is a framework to develop and evaluate the accounting standards (Stevenson, 2012).
IFRS stands for International Financial Reporting Standards which consists of set of international accounting standards. IFRS also provides guidelines for various types of transactions and events in terms of accounting to record them in the financial statements. IFRS provides the specific guidelines that how the companies must maintain their accounts as well as guidelines for reporting of accounts. The main aim of IFRS is to provide a base of accounting to all the companies so that accounting principles that are followed by the companies are same (Wieczynska, 2016).
Annual report of any company is prepared with a view to record the overall performance of a company during a whole financial year. Annual report describes the true financial position of the company as well as this describes all the activities which are done by the company during the year. Annual report is like a summary of all the relevant information that is related to any company which is useful for its stakeholders.
ANZ Banking Group: ANZ banking group is a bank so it has followed all the compliances and relevant provisions that are applicable to the company as per the Banking act, 1959. The financial statements of this company and group are prepared keeping in view the Australian Accounting Standards (AAS’s) and all other provisions that are applicable to ANZ Banking Group as per the provisions of Corporations Act, 2001. The financial statements of this group has also been prepared keeping in view the International Financial Reporting Standards (IFRS) which are adopted by International Accounting Standards Board (IASB). The financial statements of company comply with the provisions of AAS and financial statements of group comply with the provisions of IFRS.
Harvey Norman: The annual report of this company is a general purpose financial report which are prepared with complying with the provisions of Corporations Act, 2001 which are applicable to the company. The financial report of Harvey Norman complies with the Australian accounting standards which are issued by Australian Accounting Standard Board and International Financial Reporting Standards (IFRS) which are issued by the International Accounting Standards Board (Nguyen & Gong, 2014).
Accounting standards followed by the companies
ANZ Banking Group
Life insurance liabilities of this company are measured in accordance with AASB 1038.
Life insurance contract liabilities are designated at fair value through profit and loss under AASB 139.
Financial statements of the group use the portfolio exemption in AASB 13 to measure the fair value of the financial assets and financial liabilities of this company.
Policy liabilities are recorded as fair value through profit and loss complying with the provisions of AASB 1038.
All the assets and liabilities which have been offset in the balance sheet of this company are valued in accordance with the AASB 132.
The company/ group does not have any proper arrangement to fulfill the conditions prescribed in AASB 132 to offset in the balance sheet.
Fair value of Employee Share and Option plans is done in accordance with the requirements of AASB 2.
Assets which are not able to meet the conditions of held for sale are classified under AASB 5.
Presentation of financial statements is done in accordance with AASB 101.
Share based payments are made in accordance of AASB 2.
Employee’s benefits are in accordance with the AASB 119.
Fair value of the assets and liabilities of the company are done in accordance with the provisions of AASB 139.
Operating segments of the company that are meeting the quantitative criteria are reported separately in the financial statements of this company as per the provisions of AASB 8.
Recognition or recovery of deferred tax assets are made in accordance with the provisions of AASB 112 (Durocher & Fortin, 2014).
Share based payments are made in accordance with the provisions of AASB 2.
Disclosures of financial instruments are made as per AASB 7.
Consolidated financial statements consists of the provisions as per AASB 10.
Financial statements are presented in accordance with AASB 101.
Statements of cash flows are made by complying with the provisions of AASB 107.
Valuation of inventories is made in accordance with the provisions of AASB 102.
Changes in accounting policies are made in accordance with AASB 108.
Plants and equipment are valued according to the provisions of AASB 116.
Impairment of assets is made in accordance with the provisions of AASB 136.
Operating segments are valued in accordance to complying with the provisions of AASB 8.
Income tax is applied to the company in accordance with AASB 112.
Here are some relevant accounting standards that are applicable to both the companies that is ANZ Banking Group as well as Harvey Norman. These accounting standards are neither effective nor they are applied to the financial statements of companies.
ANZ Banking Group
AASB 9 which is related to the financial instruments of ANZ Banking Group.
AASB 15 which is related to the revenue from contracts with customers of ANZ Banking Group.
AASB 17 which is related to the lease accounting by the ANZ Banking Group.
AASB 9 which is related to the financial instruments of Harvey Norman.
AASB 15 which is related to the revenue from contracts with customers of Harvey Norman
AASB 17 which is related to the lease accounting by Harvey Norman (Martínez, et. al, 2014).
The company has disclosed all the relevant requirements which include the director’s salary, valuation of property, plant and equipment, registered office address, the nature of organization operations. All the relevant accounting policies and principles required in preparation of the financial statements are disclosed. Fundamental principles of accounting like going concern, principle of accrual and consistency are followed and disclosed along with the other disclosure requirements. Related parties disclosure and directors responsibility is disclosed as per the corporation act 2001. Along with this various register requirement, list of directors and key employees, rights and liabilities in accordance with the chapter 6 and chapter 6A matters. Any statement which affects the going concern of the organization is disclosed separately along with any financial or non-financial errors or misconduct by the company. Transaction with other segments and inter segment transfer should be disclosed in financial statements and there is requirement to report change in any accounting policies (Holder, 2011).
In Intermediate Accounting Assignment Help, While analyzing the financial statements of ANZ group and Harvey Norman we have analyzed that both the group is following the proper accounting conventions, guidelines and norms as per the accounting standard board of Australia and keeping in consideration the international accounting standards. This helped both the companies to present the data to its global users and create understanding among them. Along with the regulation the principle of substance over form is inserted in the above recommendations. Along with the general guidelines of the accounting standard board the legal requirements of law of the land is also disclosed in the financial statements. We have also analyzed that companies has used high degree of caution and integrity while analyzing the various financial valuation tools. As ANZ Banking Group and Harvey Norman both are conglomerate diversified groups with its subsidiaries in many countries, it require high skills and professional knowledge which is shown by both the companies in generating holding company accounts and consolidating of final accounts. Both the companies are regulated by AASB 9, 15 and 17 but still not implemented for the current period statements. As the Australian and New Zeeland banking group relates to the core financial banking sector it has to come under the scope of the banking regulation act and follow the guidelines given by the central bank of the country. Both the companies have to follow the requirement of the companies’ act 2001 apart from the accounting guidelines of the board. Apart from accounting and legal requirements both the companies has to look after its ethical accounting principles which will help to increase the credibility of both the companies and will make improve the soundness of financial statements.
Durocher, S. & Fortin, A. 2014, "New Canadian Accounting Standards for Private Enterprises and the Adoption Timing Decision: New Canadian Accounting Standards for Private Enterprises", Australian Accounting Review, vol. 24, no. 3, pp. 218-236.
Holder, W.W. 2011, "Commentary: On the Desirability of Common Financial Reporting Standards for Business and Government: Commentary: Common Accounting Standards for Business and Government", Australian Accounting Review, vol. 21, no. 1, pp. 107-110.
Martínez, J.A., Martínez, D.A. & Lin, H. 2014, "The Value Relevance of Accounting Numbers Under International Financial Reporting Standards", Australian Accounting Review,vol. 24, no. 3, pp. 237-254.
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