Financial Accounting
Introduction
It is a requirement that, if an entity is defined as a reporting entity, it is required to release financial reports that comply with the Australian Accounting Standards Board (AASB) (Deegan 2008:83).
Two companies have been chosen to analyse their reports, in particular the disclosures made in their respective reports. The two companies chosen to analyse are Commonwealth Bank of Australia (CBA) and Macquarie Bank Limited (MBL).
CBA
The Commonwealth Bank is one of Australia’s leading providers of integrated financial services including retail, business and institutional banking, funds management, superannuation, insurance, investment and broking services.
It is one of the largest listed companies on the Australian Stock Exchange (ASX:CBA).
MBL
On 13 November 2007, Macquarie Bank Limited was restructured to form the newly created Macquarie Group Limited. It businesses comprise a range of investment, commercial and selected retail financial services. It is a global provider of banking, financial, advisory, investment and funds management services. Macquarie Group Limited is listed in Australia (ASX:MQG)
Both companies have subsidiaries and associated entities.
The three disclosures that will be discussed and compared are 1) Foreign Currency transactions – AASB 121 2) Joint Ventures AASB 131 3) Segment Reporting AASB 114
Foreign Currency transactions
AASB 121 governs foreign currency transactions. The disclosure requirements are: 1) Method used in translating the accounts of foreign operations, 2) Net foreign exchange gain or loss taken to the profit and loss account, 3) Details of movement of each transaction including nature and amount in the foreign currency translation reserve.
(Farooque 2008: 8:6)
CBA 1) CBA have chosen to value the domestic operations in Australian Dollars (AUD), and have chosen to value all overseas operations in their own currency. 2) CBA record all unrealised foreign
It is a requirement that, if an entity is defined as a reporting entity, it is required to release financial reports that comply with the Australian Accounting Standards Board (AASB) (Deegan 2008:83).
Two companies have been chosen to analyse their reports, in particular the disclosures made in their respective reports. The two companies chosen to analyse are Commonwealth Bank of Australia (CBA) and Macquarie Bank Limited (MBL).
CBA
The Commonwealth Bank is one of Australia’s leading providers of integrated financial services including retail, business and institutional banking, funds management, superannuation, insurance, investment and broking services.
It is one of the largest listed companies on the Australian Stock Exchange (ASX:CBA).
MBL
On 13 November 2007, Macquarie Bank Limited was restructured to form the newly created Macquarie Group Limited. It businesses comprise a range of investment, commercial and selected retail financial services. It is a global provider of banking, financial, advisory, investment and funds management services. Macquarie Group Limited is listed in Australia (ASX:MQG)
Both companies have subsidiaries and associated entities.
The three disclosures that will be discussed and compared are 1) Foreign Currency transactions – AASB 121 2) Joint Ventures AASB 131 3) Segment Reporting AASB 114
Foreign Currency transactions
AASB 121 governs foreign currency transactions. The disclosure requirements are: 1) Method used in translating the accounts of foreign operations, 2) Net foreign exchange gain or loss taken to the profit and loss account, 3) Details of movement of each transaction including nature and amount in the foreign currency translation reserve.
(Farooque 2008: 8:6)
CBA 1) CBA have chosen to value the domestic operations in Australian Dollars (AUD), and have chosen to value all overseas operations in their own currency. 2) CBA record all unrealised foreign