Corporate Financial Reporting and Revision
Lecture 1 – Corporate Financial Reporting and Revision
LECTURE OUTLINE
Outline the nature and characteristics of companies
Describe the sources of corporate financial reporting in Australia
Identify which entities need to prepare financial reports that comply with accounting standards
Account for share issues and dividends
Account for asset revaluations and asset impairment
Nature of Companies
Type of organization established under the cooperation’s act 2001
Legal capacity and powers of an individual
Can own property, borrow money, enter contracts, sue and be sued
Ability to raise capital
Ownership is by share
Limited liability of its owners
Types of Companies
PUBLIC COMPANIES
Usually larger companies
Generally have widespread ownership
May issues shares to public and apply to have shares listed on stock exchange
PROPRIETRY COMPANIES
Usually small business
Cannot issue shares to public
Limited shareholders
NOTE: A company is classified as small if it meets at least two of the following
1. Revenue < $25mil
2. Assets < $12.5mil
3. Employees < 50
Who Runs a Company?
Directors elected by shareholders
Two types of directors
1. Executive – full time employer involved in day to day operations (ex:CEO)
2. Non Executive – not involved in day to day operations but responsible for policy making and planning (Expected to monitor performance of executive directors for shareholders)
Sources of Corporate Reporting Requirements
Corporations Act
- A financial report must be prepared for each financial year by (s 292):
Disclosing entities (have additional reporting requirements, e.g., half-year fin. statements)
Public companies
Large proprietary companies
Disclosing entities Financial report must comply with accounting standards (s 296) and provide a true and fair view of the financial position and performance of the company (s 297)
SMALL proprietry companies don’t need prepare financial reports unless
LECTURE OUTLINE
Outline the nature and characteristics of companies
Describe the sources of corporate financial reporting in Australia
Identify which entities need to prepare financial reports that comply with accounting standards
Account for share issues and dividends
Account for asset revaluations and asset impairment
Nature of Companies
Type of organization established under the cooperation’s act 2001
Legal capacity and powers of an individual
Can own property, borrow money, enter contracts, sue and be sued
Ability to raise capital
Ownership is by share
Limited liability of its owners
Types of Companies
PUBLIC COMPANIES
Usually larger companies
Generally have widespread ownership
May issues shares to public and apply to have shares listed on stock exchange
PROPRIETRY COMPANIES
Usually small business
Cannot issue shares to public
Limited shareholders
NOTE: A company is classified as small if it meets at least two of the following
1. Revenue < $25mil
2. Assets < $12.5mil
3. Employees < 50
Who Runs a Company?
Directors elected by shareholders
Two types of directors
1. Executive – full time employer involved in day to day operations (ex:CEO)
2. Non Executive – not involved in day to day operations but responsible for policy making and planning (Expected to monitor performance of executive directors for shareholders)
Sources of Corporate Reporting Requirements
Corporations Act
- A financial report must be prepared for each financial year by (s 292):
Disclosing entities (have additional reporting requirements, e.g., half-year fin. statements)
Public companies
Large proprietary companies
Disclosing entities Financial report must comply with accounting standards (s 296) and provide a true and fair view of the financial position and performance of the company (s 297)
SMALL proprietry companies don’t need prepare financial reports unless