This is my first time blog .I am new to the accounting side of things but after reading and gaining an insight to what is ahead i think this will be a great journey into the realm of accounting and blogging and communication with fellow students and coordinators. It was interesting to read about CEO’s and CFO’s who have backgrounds in accounting and how this field is such a integral part of the companies structure for success .I was also thrilled to learn the different aspects of retaining information and how everyone is different. I think it is important to find a study plan that works for you. Information retention can be difficult at the best of times for me anyways.
I am Peter Nicholson, its good to be part of your study group.
I enrolled for the Bachelor Of Property. I am excited to be on this journey and to face the challenges ahead.
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I have started to post and answer questions on peerwise.
Below are the Blog I posted on
Vatsal Miteshkumar Thakar posted on his blog
assignment 2 step 1
by Pawan Sapkota -posted on this blog
My Company is identified as ADCORP , an Australiasian compamy with offices in : Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra and Darwin; or in New Zealand: Wellington, Auckland, Christchurch and Tauranga.
Owned and operated full-service advertising agency they have been in marketing communications for 30 years and have a depth of experience in offering creative services in areas of advertising, branding, media, events, management, PR, campaign, research and strategy. They also have a broad range of clients which include government, residential and commercial property, health, retail, education and recruitment.
Links to Adcorp Services
Links to Adcorp
link to Finacial staements
Adcorp has seen a decline in profit this year due to the market and other close competitors
seeking new clients and contracts can be hard due to the current economy. Adcorp has realised this and is prepared to meet the market to gain the acquisition of new clients so as to keep performing.
I am not from a background that has a lot to do with accounting so the Annual Reports look challenging to me.The numbers just spinning in my head .But if I looked at one thing at a time then you could see how the reports work in with one another..It was interesting to see the financial reports and how they add up. Pie charts and graphs can be challenging at the best of times but serve a purpose for a company overview for interested parties
I have no clue about advertising as I was a carpenter subbie so very basic accounting skills/advertising were required. It was interesting to find out how important the client is to Adcorp and how they want to deliver a product the meets your expectations and to catch the consumer eye ultimately for sales/investment
This reflection can be backed up by visiting the ADCORP investments link at there web site.
But then I read on and realised that accounting is a big part of everyday life not only business. This can be found with budgeting the household with buying goods and paying bills.\
I also had more involvement with accounting then I thought from buying materials for a carpentry job and paying the creditors and other subcontractors so as I could keep a record of expenditure and income. I agree that accounting is everywhere and is a major part of life and its success.
Adcorp sees that there is growth showing in the property and employment sectors but how ever the economics sector is still facing uncertainty. Adcorp has adapted its self to the current economic environment and still recognises the changes it requires. With a focus on its sales team and shared service centre will remain the key area to develop a business model. Adcorp are also interested to find new revenue streams either through self development or through partnerships or investments. Due to the Current downturn in economy the company has to meet the market.
Below are some extracts from the 2016 Financial report.
• Top line billings reduced by 12.1% to $59.5million
off the back of an uncertain property sector and
diminished employment market.
• Operating revenues were $15.7m, down 13.9% from
• Revenue margin declined from 26.8% to 26%.
• Expenses were down 9.5% to $16.2m with a
significant reduction in infrastructure costs relating
to office leases and communication.
• A net operating loss before tax of $601,000 was
produced compared with the prior year’s operating
profit before tax of $217,000.”
AREAS OF FOCUS
The main areas that will be the focus of management
in the year ahead include:
• Development of individual client plans to increase
Adcorp’s share of marketing budgets with new
products and services.
• Analysis of client profitability based on direct costs
and overhead allocations.
• Development of new revenue streams.
• Analysis of employee performance in delivering on
the company’s financial objectives.
• Identification of and investment in segments of the
market that are growing.
• Review of shared service processes and resources
to reduce costs and increase efficiencies “
Chapter 1 A way of viewing business
What is Accounting
To me accounting is the flow of business and a way of capturing its moments profit, loss, equity ect.
I found it very interesting to see how a business holds actual value not only to the owners /investors and to it consumers as well. I could also relate to the Sole Trader as I was a carpenter by trade and how I had to keep up with my GST account and pay each week.
I also like how accounting in a businesses is re-enforced in this section again with Managing directors who come from a various degrees of accounting backgrounds. I like the paragraph on just not thinking of accounting as numbers or realities but as a representation of what is really going on in a business.
I live in Mackay QLD so a very similar country town feel as Yeppon .
If I was running one of these business I would need up-to-date records kept for monthly reports and reviews so as to get an understanding of how the business is going with expenditure and profit also a guide to the local economy on sales reports. I think you could have reports done on a spreadsheet showing the figures and or a graph /flow chart. I would hope the with all of this documentation that I would be able to make a performance decisions and a future projection of the company if I was going to purchase it,close my doors and or look to expand.
If I was a small business then I could do the book my self with no interruption to business. On the other hand if someone else was doing the books for me I could be more hands on at floor level with running the business, At a large company it would be necessary to keep accountants so daily, weekly/monthly records could keep up with the transactions.
I can relate to setting boundaries in business and flatting LOL from personal experience always have a contract drawn up. I like the idea of an independent entity dealing with conflict and disagreements between the beneficiaries and the trustee.
Business can be in a form of Partnership, non for profit, sole trader and companies.
Why do we have double entry accounting ?
Double entry accounting provides a separate break up of the companies daily transactions .This is
done to make a clear understanding of the profit and loss imagine if it was all in one column what a mess and never work out what the daily balance is. Hence we have journals and ledgers.
Why do we put everything in twice?
One column (journal) has every transaction made in it for that day then it is broken down into its relevant departments such as customers ,purchases, suppliers and many other transactions and economic events.
The other column is the (ledger) this contains the same information but stored in order as it happens each day but in its individual accounts. Such as assets liabilities, equity, revenue and expenses.
Identify Three Assets
Cash and cash equivalents “refer to the line item on the balance sheet that reports the value of a companies assets that are cash or can be converted into cash immediately” link www.ivestopedia.com
Trade and other receivables “ are amounts billed by business to its customers when it delivers goods or services to them in the ordinary course of business.” link
Income tax refund overdue
must be paid by the first of December this is hopefully a tax return to the company so profit coming in.
Identify Three Liabilities
Current liabilities – trade and other payables “with in the balance sheet the following should be classified as current liabilities. Payables is all trade payables related to the purchase of goods or services from suppliers .accrued expenses”link
Current liabilities – provisions” in financial accounting ,a provision is an account which records a present liability of an entity recording of the liability in the entities balance sheet is matched to an appropriate expense account in the entity’s income statement”link
Provision (accounting)- Wikipedia
Non-current liabilities – deferred tax “A deferred tax liability is an account on a companys balance sheet that is a result of temporary differences between the companys accounting and tax carryinng values, the anticipated and enacted income tax rate,and estimated taxes payable for the current year”
Identify Three items of Equtiy
Equity – issued capital
Equity – purchased controlling interest reserve
Equity – reserves
Understanding The Game.
Let me start with my personality coming from a construction background routine and set outs step by step ,left ,right day and night I am more use to direction and following a plan.
OMG shades of grey is like finger nails on a chalk board, is this a way of manipulating figures to suit managers as to lets just say make a company more attractive than it is? OR is it a way to gain investment for the company?
Does it make the company more profitable for banks to lend?
So as long as the figures stay with in the rules of the game and shades of grey exist i guess yes it can be done the reconfiguration of numbers to suit a companies means.
With so many rules to be followed and (GAAP ) Generally accepted accounting principles which says need to follow or is it mandatory to follow?
(AASB) Australian Accounting Standards Board these standards are legally binding in Australia is this more shades of grey dealing with oversea companies?
You cant have a rule for everything with peoples different views on how the rules are adapted not all financial statements are the same, the use of general purpose financial reporting is engaged.
This can allow for an international conceptual frame work to the Australian circumstances to be followed what used to happen with out this.”A businessman asked an accountant “How much is two and two?”The accountant got up from his chair, went over to the door and closed it then came back and sat down. He leaned across the desk and said in a low voice,”How much do you want it to be ?”
MMM food for thought I think.
Then accrual accounting pay before use I think this one is straight forward pay later for a service that you require with no cash exchange until later like a bus travel card.
I think firms can also use this shades of grey for future projections of the company as well it would be good if they could forecast the next GFC or the next Boom.
I think the quality of information is used to sell the firm or company in away that the market views it at a stable and profitable entity hopefully.
Introducing Financial Statements
I liked the way chapter 3 was introduced as a party. This made me interested to read more and find out the understanding and names associated with this chapter. The four hosts of the party The Balance sheet, income statement, statement of changes in equity and cash-flow. Each person / company will have there own different take on how to view and present these as each person is different.
With my company ADCORP with its glossy overview and links to all parts of the company. I open the investments link to the heart of the financial reports OMG numbers everywhere where do u start.
After reading this chapter a fair bit of haze lifted and I could focus on the introductions at hand like the balance sheet and it footnotes for a later date. Glad to know how this works in the balance sheet for an overall perspective of the company at certain intervals through its life. I would not have known this, with the help of this chapter 3 things are falling into place a bit by bit. I see that from previous chapters like assets, liabilities and equity are coming to factor in.
I also like the understanding of the percentage owned by parent company and how many subsidiary companies it owns and at what percentage typically the parent company will own 50 to 100 percent.
There are two other statements one is changes in equity and the other is cash flow statement.
The first one indicates the equity changes during a period and the other cash flow changes during a period of these work in conjunction with the firms balance sheet. With this various ratio s could be devolved to gain in-site between two or more of the firms financial statements.
I also seen the value of the equity in a firm , is the (PV) present value and it projection for the future. Free cash flow (FCF) this can be looked at instead of its dividends when try to value its equity..
Well if u do just what works just a basic overview of the business/firm then its future expenditure my be more then the companies bring in in financial revenue so its over capitalised and lending or investing in this firm would be not wise investment. So to find a ratio to break up the firms into current and non current assets and liabilities in the balance sheet may indicate the companies future projection. I think this is one part of the GFC overcapitalising and not enough income to cover the dept.(just a view thats all)
There are good and bad ratios that went in to development .We find the well known use of the 2:1 ratio twice as many current assets as current liabilities. I think if u just use any ratio you could end up in trouble so if a proven successful ratios have been tried and tested as with Walls study why not adapt to it. This also could just be the practitioners view of just looking at numbers and not how they are connected to the firms performance. I think iam understanding this as a guide and up to the practitioner of what ratios he uses as it looks like people in the industry agree to disagree.
What is the benefit of having structure
The Du Pont companies frame work was a different look at the financial reports and look and focused on the profit margin (profit /sale) and turn over (Sales and total assets).
This ratio worked for this company and its practitioners. I think this is setting a benchmark to follow as there are so many variants out there to use and the Du Pont Company practitioners to be on the same page when doing the companies reports. So I do agree this is way better to have structure to follow.