Module 1 lecture 1 Flashcards
(29 cards)
Companies are organizations established under the ….
Corporations Act (2001)
what type of company is this
- Larger, with widespread ownership.
- Can issue shares to the public and be listed on the stock exchange.
Public Company
Yes or No:
Is this company classified as large
- Revenue > $50m
- Assets > $25m
- Employees > 100
Yes
Sources of Corporate Reporting Requirements:
The primary legislation governing companies in Australia Is…
Corporations Act (2001)
Sources of Corporate Reporting Requirements:
Establishes standards for financial reporting
Australian Accounting Standards Board (AASB)
Sources of Corporate Reporting Requirements:
Requires listed companies to adhere to specific rules, including continuous disclosure obligations.
Australian Securities Exchange (ASX)
Required Financial Statements (AASB 101)
Shows assets, liabilities, and equity…
Statement of Financial Position (Balance Sheet)
Required Financial Statements (AASB 101)
Can be a single statement or split into profit/loss and other comprehensive income.
Statement of Comprehensive Income
Required Financial Statements (AASB 101)
Reports the cash generated and used during the period.
Cash Flow Statement
Enforcement of Accounting Standards
Ensures compliance with the Corporations Act and AASB standards…
Australian Securities and Investments Commission (ASIC)
Listing Rules: Ensure efficient and timely dissemination of information.
Continuous Disclosure: Companies must immediately inform the ASX of any material information that could affect the value of their securities.
Specifically, these requirements are for the…
Australian Securities Exchange (ASX)
Journal Entry for Share Issue
When shares are issued for cash:
Dr. Cash
Cr. Share Capital
Cash Dividends
Declaration of dividend
Dr. Dividends Declared
Cr. Dividends Payable
Cash Dividends
Payment date
Dr. Dividends Payable
Cr. Cash
Dr. Dividends Paid
Cr. Dividends Declared
Share Dividends / Bonus Issues:
Dr. Retained Earnings/General Reserve
Cr. Share Capital
Issuing shares to existing shareholders from retained earnings or reserves without any cash payment.
Accounting for Transfers to and from Reserves
Transfers from Retained Earnings;
Dr. Transfer to General Reserve
Cr. General Reserve
This entry can be reversed if necessary.
These steps are for:
1) Transfer profit/loss to retained earnings.
2) Deduct dividends declared/paid from retained earnings.
3) Reset the balances of revenues, expenses, dividends, and transfer to reserve accounts to zero.
Closing Entries, at the end of each financial year.
Accounting for Retained Earnings
- Formula:
Opening Retained Earnings
+ Net Profit
- Dividends Paid/Declared
− Transfer to Other Reserves
= Closing Retained Earnings (reflected in the equity section of the statement of financial position).
true or false
PPE should be recorded at cost, which includes purchase price and costs to bring the asset to its current location and condition
True
(including taxes)
Cost - residual value is the…
depreciable amount
is allocated over the asset’s useful life.
Depreciation expense
Dr. Depreciation Expense
Cr. Accumulated Depreciation
contra asset accounts have a natural balance of…
CR. Credit
Asset accounts have a natural balance of
DR. debit…
Measurement After Acquisition:
what model is this called?
Assets are carried at cost less accumulated depreciation and less impairment losses.
Cost Model
(AASB 116)
AASB 136 requires at each reporting date that assets are to be asses for….
Impairment
