Restated of Statement of Financial Position
Restated of Statement of Financial Performance
Any issues of concerns I had about restating Oz Brewing Limited
Oz Brewing Limited had simply
Statements of Financial Position, Statements of Financial Performance and
Statement of Movements in Equity.
When I was restating the
Statements of Movements in Equity it was a simple and easy restatement. The
only difference between the Statements of Movements in Equity and the
Restatement of Statements of Movements in Equity was the heading ‘Other
Financial Comprehensive Income’ and the heading ‘Transactions with
Shareholders’. This restatement was
straight-forward and easy to complete.
Secondly, was the Restated
Statement of Financial Position which was easy and simply to classify because
there were basic accounts that was easy to classify into operating or financial
activities. There were only three accounts that I was unsure about whether they
are operating or financial activities. Firstly, was the ‘Other Assets’ which
was classified under the ‘Current Assets’ because there was no notes relating
to what the other assets are I classified it as an operating activity purely
because current assets are assets that are to be used in twelve months or less.
Secondly, was the ‘Investments – accounted for using the equity method’ which
had a note attached to the statement because this account relates to financial
matters of the business therefore I classified it as a ‘Financial Asset’.
Thirdly, was the ‘Other Assets’ which was classified under the ‘Non-Current
Assets’ and when I read the note attached to this account I classified it under
a financial activity because asset relates to the heads of Agreement which
could be classified as a financial activity because the business is not
implementing a Head of Agreement every day. Oz Brewing Limited had no financial
obligations. The equity of the balance sheet is a matter of copying and pasting
the accounts and amounts into the Restated Statements of Financial Position.
Thirdly, was the Restated Statement
of Financial Performance this was the hardest one of the three statements I
found this one the hardest to classify into either operating or financial activities.
The following expenses I classified as operating expenses because without this
expenses there would be no employees to run the company, they are:
- Directors’ and Company Secretarial Fees
- Administration Expenses
- Administrator’s Expense
- Staff Costs
The tax benefit was easy to
classify after you located the company’s tax rate on the global tax rate link.
My company is an Australian-based company which means it has a tax rate of
thirty percent. Once I knew this it was a matter of doing a simple calculation
which was Net Financial Expense before Tax multiplied by thirty percent. This
was the account the company was either getting a refund or paying to the
government. The next step was the Net Financial Expenses accounts. Firstly, my
reasoning to classified these expenses as a financial expense was because they
have not something that is completed daily or weekly. Expenses that are
classified under financial expenses are expenses that occur through the year
and relate to the finances of the business to be successful business or
unsuccessful business. These expenses are the following:
- Bad Debts
- Accounting and Audit Fees
- Consultants Fees
- Legal Fees
- Share Based Payments
- Share of Loss for Equity Accounted Joint Venture
- Impairment of Joint Venture
- Exploration Costs Written Off
- Deed of Company Arrangement Settlement Costs
- Other Expenses
- Financial Income
The section at the end of the
Restated Statement of Financial Performance is the other financial
comprehensive income which is a matter of copying and pasting this section from
the Statement of Financial Performance.
Discussions with other students about restating
Throughout this course I had
discussions about restating to people face-to-face in tutorials. The people I
had a conversation about restating was Matthew Barone, Grace Taylor and Rikki
Knight. I had a discussion about restating the statements and how to classify
each account into operating or financial activities. The way I explained it to
all three of the people is that operating activities is activities that effects
every day running of the business whereas financial activities is activities
that effects the profit or loss and whether to invest into an particular field.
With Matthew Barone we talked
about how the Restated Statement of Movements in Equity was exactly the same as
the Statement of Movements in Equity you just rearranged and add one or two
headings in. Also with Matthew’s discussion I pointed out the following at the
match:
- ‘The Equity at the end of year’ in the ‘Restated Statements of Movements in Equity’ has to match the ‘Total Equity’ in the ‘Statement of Movements in Equity’
- The ‘Total Net Financial Assets/Obligations + Equity’ in the ‘Restated Statements of Financial Position’ has to match the ‘Net Operating Assets’ in the ‘Statement of Financial Position’
- The ‘Comprehensive Net Profit/Loss after Tax’ in the ‘Restated Statements of Financial Performance’ has to match the ‘Total Comprehensive Profit/Loss for the Year’ in the ‘Restated Statements of Movements in Equity’
Once I told Matthew this he was
able to start restating and if it does not match he can have a look which
restating statement is incorrect.
While with Rikki and Grace we were
discussing how to actually classify the accounts and which accounts fall into
which categories. I told Rikki and Grace that if there is a note attached to a
statement to look at the note because sometimes the note will say ‘Operating
Activities’ or ‘Non-Operating Activities’ or ‘Financial Activities’. We had a
discussion about Bad Debts with it would be an operating or financial activity
but we decided it to be a financial activity because it is dealing with the
money coming into the business. We talked about other accounts such as legal
fees which we thought it would be classified into financial expenses because
you are not going to use legal fees every day in a business so it would be financial
over operating activities. This helped use to discuss accounts that we were
unsure whether they were financial or operating activities.
