Conceptual Framework and Its Importance
The study deals with the health care company named as Ramsay Health Care Limited. The assignment has been conducted for analyzing the remuneration report of Ramsay Health Care Limited (Ramsayhealth.com.au 2017). The current segment elucidates the concept of conceptual framework and its importance that is used by companies. The health care company has its listings in Australian Stock Exchange. The current study takes into deliberation the domination arrangement involving assessment of observance towards system and strategy by examining General Purpose of Financial information for users of monetary declaration of Ramsay Health Care Limited. Furthermore, the present study transaction with matter pertaining to compensation arrangement as well as internal and external controls. Though, the present section discuses concerning the prudence philosophy as well as obedience to theoretical structure of fiscal coverage (Tucker and D. Lowe 2014).
As far as revenue is concerned, Ramsay Health Care Limited reports Net Profit after Tax that amounts to $481.4 million for the specified year where 16.8% increased from the past year (Nørreklit and Mitchell 2014). It is noted that core NPAT delivers with core earnings per share of 231.4 cents for the given year where shows of 17.7% on the past consequent time. In that case, the excellent performance combines with the assurance in the income future prospect where in the future years the Directors reward the shareholders with 17.8% that increase in total dividends for the given year 2016. Significantly, these outstanding consequences explain the corporation to persist to provide in expansion in the activities and the responsible employees. Though, and on behalf of the Board, Ramsay Health Care’s devoted human resources all through the world, the hospital who work with the company and has talented senior supervision teams for their position in bring these outstanding consequences and promise to superiority healthcare result (Ramsayhealth.com.au 2017). The Fellow Directors of Ramsay Health Care Limited takes the responsibility as their main objective that helps in gaining effectual authority of Ramsay Health Care on behalf of our investor. For the financial year 2016, Ramsay Health Care’s Australian and Asian trade attained income increase of 8.8% and EBIT expansion of 11.6% on the back of solid volume expansion, brownfield growth and continuing competence (Hyman 2014).
Ramsay Health Care Limited made additional pace in superiority and security for the financial year 2016. At Ramsay Health Care, entire trade sustained to evidence outstanding results alongside nationwide standard for areas counting infection rates, falls risk and medicine administration (Hopper et al. 2015). At Ramsay Health Care, entire amenities upholding their official acknowledgment make sure that they are attaining and distributing the maximum principles of care to patients. This reveals the fact that Ramsay UK attained outstanding results in enduring approval with Ramsay UK taking account for six out of the top 15 hospitals countrywide scoring 100% in the NHS ‘associates and relations test’ for the financial year 2016 (Ramsayhealth.com.au 2017).
Revenue and Financial Performance
Ramsay Health Care Limited is dedicated towards providing high quality health care services as well as continuing sustainable development and shareholders returns. Addition to that, the Board had recognized the significance of good domination so that they achieve the business objectives in expulsion with the responsibilities of the entire stakeholder as well as perform the broader role of the corporation as a good group citizen (Henderson et al. 2015). Ramsay Health Care Limited aims at maintaining a Board that consists of directors who are involved in efficiently understanding and managing the issues that is noted in the company’s business for reviewing the challenges. Lead Independent Director provides management to the other self-governing Non-Executive Directors that presents other perspectives on issues that needs to be taken into consideration by the Board (Ramsayhealth.com.au 2017).
There are different awards present in relationship with chronological fiscal arrangement as well as past preservation privileges (Englund and Gerdin 2014). As far as compensation frame is concerned, it discloses the arrangement as well as domination of compensation for the health care based company named as Ramsay Health Care Limited. This corporation perseveres for sustaining the achievement of largely trade results revolving into deliverance possible worth to its investor. Furthermore, appraisal of compensation arrangement mostly takes into deliberation contribution strong establishment for operational under suppleness of process. In that case, this help in replication of actions on using of interchange approach for attracting the maintenance of talents from human resources (Drury 2013). Though, Board and Senior managerial company mostly posses enduring relationship aligning with possible investor by taking thought different necessities of the possible investor
Remuneration report of Ramsay Health Care Limited, it was noted that the health care company failed in meeting the short-term incentive plan for specified time. This can be predicted after looking at the performance that was 4% growth of net profit after tax than the past year (Ramsayhealth.com.au 2017).
The theoretical frame discloses aspire and purpose of monetary treatment that is qualitative in nature for representation functional facts (Ramsayhealth.com.au 2017). Nevertheless, intangible arrangement deals with essential recognition and calculates different fundamentals of monetary announcement as renowned under funds and upholding of resources (Ramsayhealth.com.au 2017). The essential plan of universal reason monetary coverage is contribution monetary facts to the possible investor, creditors and lenders in order to appear at exacting pronouncement. Furthermore, given assessment include purchase; trade as well as investment of fairness and liability instruments in form of advance and other recognition type. Though, Ramsay Health Care Limited information fails in tackle all the applicable facts that concerns with possible shareholder as well as investor and creditors (DesJardins and McCall 2014).
Healthcare Quality and Safety
It is important to consider the fact that lease accounting is properly arranged and prepared from the information extracted from Ramsay Health Care Limited where the business follows the standard in accordance with AASB (Deegan 2013). In other words, the explanation has been made for arranging the lease requirements that ultimately fulfills the level of dependence for given assets. It is required to arrange the conveyance where the company can make use of assets in an effective way. Auditors will be involved in taking positive audit opinion decision for assessing the existing supplier arrangements as kept in lease accounting (Ramsayhealth.com.au 2017). Nevertheless, it is required to identify the issues that had noticed when standard fails in using the given assets that fulfills the supply obligations and Group enhancement. Lease accounting standard had been enforced as it is implemented so that quality reports can be made where the sourced goods will have no control over the use of assets. In that case, purchases are priced depending upon the individual order that in real has no influence over the supplier assets in any way (Cooper 2015).
Inventory can be easily calculated by Days Sales of Inventory where day’s sales of inventory for the first six months ended in the year 2016 were 8.95 (Ramsayhealth.com.au 2017). Addition to that, inventory turnover measures how fast Ramsay Health Care Limited turns over its inventory for specified year. The inventory turnover of Ramsay Health Care Limited for the six months for the year 2016 was 4.74. Furthermore, inventory to revenue ratio help in determining the ability of a Ramsay Health Care Limited for managing their stock in an effective way. Therefore, it accounts with the percentage of stock that are acquired by Ramsay Health Care Limited currently has on hand for supporting the generation of profits. The ratio named as inventory to revenue ratio of Ramsay Health Care Limited for the six months for the year was 0.05. Day’s inventory represents the number of days of goods sold in sales that a Ramsay Health Care Limited has in the inventory (Christensen, Nikolaev and Wittenberg?Moerman 2016).
Ramsay Health Care Limited deal receivables is appraisal on an continuing basis at an in commission level where person debt are termed as uncollectable that are on paper off at the time of identification (Ramsayhealth.com.au 2017). It is the impairment stipulation that is documented as there is an object of confirmation where Ramsay Health Care Limited will not be able to collect the receivable. Furthermore, debtors will face monetary complexity where the non-payment payments of debts are more than 60days past due and termed as purpose confirmation of mutilation. It is the amount of impairment loss that is the receivable that carries amount after comparing it with the current worth of predictable future cash flows that is inexpensive at the innovative effectual awareness speed. Receivables past due but not yet been considered impaired are $68599000. It depends upon the terms of payment that have been re-negotiated based on the credit the past of receivables past because it is not damage where the management believes that these quantity are fully improved (Chen and Schipper 2016).
Corporate Governance and Responsibilities
PPE is stated at price after deducting from the accumulated depreciation and any of the accumulated impairment loss (Beattie 2014). This takes into consideration the loss of substitute the parts that are entitled for capitalization when the price is replaced with the part that is acquired at the same time. For Ramsay Health Care Limited, depreciation is calculated as well as remains consistent with the previous year and uses the straight-line method for estimating the useful life of the assets such as buildings and fundamental plant will be for 40 years. In case of leasehold improvements, Ramsay Health Care Limited will be done over the lease-term. In that case, Plant and equipment other than plant is essential to buildings for specific period that exceed 10 years (Ramsayhealth.com.au 2017).
Ramsay Health Care Limited has charge its secretarial strategy in observe to the types of the medical misconduct division. Addition to that, Ramsay Health Care Limited resolute that it would alter its secretarial rule for presenting the provision spilt between the current as well as non-current liability in the declaration of fiscal position (Ramsayhealth.com.au 2017).
Ramsay Health Care Limited had engaged in classifying the leases into two types operating lease and finance lease. In that case, the company gas used finance leases as contracts explains the lease obligations that help in transferring either risk or reward that gets associated with the ownership to lessee (Ramsayhealth.com.au 2017).
Goodwill will be acquired in the business and is a combination that is primarily calculated at charge with the surplus of the price of the trade grouping over the interest of Group in the net fair value of the particular possessions. Goodwill is mainly allocated and is not larger than an in service section that is resolute in agreement with AASB 8 Operating Segments (Ramsayhealth.com.au 2017).
Ramsay Health Care Limited had been accused of legal disputes that were faced by the health care company and investigation had arisen from the normal activities (Ramsayhealth.com.au 2017). These activities needs to be forecasted when Directors fails to predict any types of material financial effect. In that case, the company had been involved in providing with banking facilities and lease obligations for the various subsidiaries under Ramsay Health Care Limited. The contingent liabilities of Ramsay Health Care Limited can be easily identified from the amortization assets that can be valued after deducting the liabilities amount as per the accounting standard IAS 18. In that way, it was easy to design the fair value for arriving at either profit or loss in case it is measured for auditing purpose for the company named as Ramsay Health Care Limited (Ramsayhealth.com.au 2017).
Compensation Arrangement and Internal Controls
Ramsay Health Care Limited effective tax rate is at 27.8% that is quite lower and it is noted from the previous year value. This is due to the reason why non-deductibility of acquisition costs is done for the year 2016. As far as deferred tax assets and liabilities is concerned, Ramsay Health Care Limited is legally enforceable that is set for the current tax assets after comparing it with the current tax liabilities (Ramsayhealth.com.au 2017).
Ramsay Health Care Limited is a health care business that has involved in transfer pricing and had been using the structure in accordance with SARS requirements where all the given transactions are present and carried out with the arm length (Ramsayhealth.com.au 2017).
The term “Prudence” is one of the perceptions that are considered under conservatism standard and secretarial philosophy necessary by a specific accountant for looking at the figure of liabilities and operating cost at the instance of comprehension. Nevertheless, it is the theory that is desirable by accountants who are vigilant in accepting strategy and judgment in profits possessions overstatements of unit operating cost in the most appropriate way (Ramsayhealth.com.au 2017).
Conceptual framework is one of the frameworks that are mostly used by business organization to solve any issue that prevails in that enterprise. It is in accordance with the fiscal declaration training takes into explanation suspicions as well as facts concerning proceedings and position such as collectivity of uncertain receivables as well as useful life of fixed asserts like Plant and Equipment for the business named as Ramsay Health Care Limited (Ramsayhealth.com.au 2017). Though, it is noted that some uncertainties that are predictable by means of bringing shared revelation after exercising discretion in case of theoretical structure. Though, Prudence means the thought that is comprehensive of amount of concern in way for exercising over ruling on the indecision stage.
It is an essential requirement to update the conceptual framework after finding the loopholes that was present in the previous conceptual framework (Ramsayhealth.com.au 2017). The main potential user of universal reason fiscal coverage are predicted and potential shareholder, lenders and creditors, where it is required to take verdict about business, advertising or investment fairness or liability instruments and provide or settling mortgage or other types of recognition
It is important to gather facts on importance of financial reporting refers to carefulness perception obtainable in the theoretical structure that helps in bringing constancy of facts as well as impartiality of events. Adding to that, after high-priced quality as well as deliberative misstated information, it is obtainable in the intangible frame (Ramsayhealth.com.au 2017).
After explaining the advantages there are even disadvantages of fiscal exposure takes into thought biasness hugely affect monetary presentation in the next subsequent years.
Conclusion
Entire study has been conducted to analyze the compensation account of Ramsay Health Care Limited. The above analysis shows financial items that are represented in the financial reports of Ramsay Health Care Limited. The fiscal information has been extracted from the annual report, remuneration report and auditor report of Ramsay Health Care Limited. Ramsay Health Care Limited policies on disclosure abide by the Corporation Act for the year 2001 that is listed in ASC Listing rules.
Reference List
Beattie, V., 2014. Accounting narratives and the narrative turn in accounting research: Issues, theory, methodology, methods and a research framework. The British Accounting Review, 46(2), pp.111-134.
Chen, Q. and Schipper, K., 2016. Comments and Observations Regarding the Relation Between Theory and Empirical Research in Contemporary Accounting Research. Foundations and Trends® in Accounting, 10(2-4), pp.314-360.
Christensen, H.B., Nikolaev, V.V. and Wittenberg?Moerman, R., 2016. Accounting information in financial contracting: The incomplete contract theory perspective. Journal of Accounting Research, 54(2), pp.397-435.
Cooper, C., 2015. Accounting for the fictitious: A Marxist contribution to understanding accounting’s roles in the financial crisis. Critical Perspectives on Accounting, 30, pp.63-82.
Deegan, C., 2013. Financial accounting theory. McGraw-Hill Education Australia.
DesJardins, J.R. and McCall, J.J., 2014. Contemporary issues in business ethics. Cengage Learning.
Drury, C.M., 2013. Management and cost accounting. Springer.
Englund, H. and Gerdin, J., 2014. Structuration theory in accounting research: Applications and applicability. Critical Perspectives on Accounting, 25(2), pp.162-180.
Henderson, S., Peirson, G., Herbohn, K. and Howieson, B., 2015. Issues in financial accounting. Pearson Higher Education AU.
Hopper, T., Ashraf, J., Uddin, S. and Wickramasinghe, D., 2015. Social theorisation of accounting. The Routledge Companion to Financial Accounting Theory, p.452.
Hyman, D.N., 2014. Public finance: A contemporary application of theory to policy. Cengage Learning.
Nørreklit, H. and Mitchell, F., 2014. Contemporary issues on the balance scorecard. Journal of Accounting & Organizational Change.
Tucker, B. and D. Lowe, A., 2014. Practitioners are from Mars; academics are from Venus? An investigation of the research-practice gap in management accounting.Accounting, Auditing & Accountability Journal,27(3), pp.394-425.
Ramsayhealth.com.au. 2017. Ramsay Health Care. [online] Available at: https://www.ramsayhealth.com.au [Accessed 30 Apr. 2017].
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