Step 2

Restated of Statement of Movements in Equity

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.