Lecture 1 - Corporate Accounting 22754 Autumn 2010 Lecture...

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1 Corporate Accounting 22754 Autumn 2010 Lecture 1 Review of accounting assumptions and concepts Corporations Profits, reserves and distributions to owners
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2 Lecture references The Corporations Act 2001 The AASB Framework AASB 101 AASB 116
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3 Learning objectives To learn the characteristics and types of companies and the reasons for it being a common business form To understand the role of the Corporations Act and accounting standards in the governance of companies and the requirements for financial reporting. To analyse the reasons for mandatory corporate financial reporting. To learn the responsibilities of major regulatory authorities To understand how the elements of financial statements – asset, liability, income and expense – are defined.
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4 Learning objectives To understand how distributions are made from profits To review how to account for cash and non-cash dividends.
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5 Corporations
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6 This course is all about: Investments between companies And the differences in the way the investments are accounted for: Control consolidation accounting Significant investor influence equity accounting Non-influential shareholding ordinary Investment
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7 Nature of a company Group of people carrying on a business activity Separate legal entity Easily formed Regulation Corporations Act Accounting standards (AASB’s) Stock exchange (ASX)
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8 Characteristics of companies Legal personality Limited liability Ownership by share Perpetual succession Ability to raise capital Professional management.
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9 Types of companies Proprietary companies At least 1 and no more than 50 non-employee shareholders Can’t issue shares to, or borrow from, the general public There need only be 1 director Don’t have to hold an AGM
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10 small proprietary companies Must satisfy at least 2 of the following conditions < 50 employees, Gross Op revenue < $25m, Gross assets < $12.5m Does not have to prepare and distribute financial statements to members unless it is a disclosing entity Proprietary Companies
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11 large proprietary companies are usually reporting entities and so must prepare all of the financial information as per the public companies These do not have to be disclosed to the general public Proprietary Companies
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12 Can issue shares to, and raise loans from, the general public Must have at least 3 directors Must follow reporting, disclosure and audit
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This note was uploaded on 11/18/2010 for the course ACCOUNTING 22754 taught by Professor Helen during the Three '10 term at University of Technology, Sydney.

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Lecture 1 - Corporate Accounting 22754 Autumn 2010 Lecture...

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