Queste Communication Ltd – Service organization
The service organization is the entity that offers services to the user organization or the individual that are part of the information system of the organization. On the other hand, retailers are the vital and last members in the distribution channel. The retailer provides services to the manufacturers through providing their services and goods to the customers and and generates the channel information where the feedback of the customer, their dissatisfaction and their feedback are shared with manufacturers (Palepu, Healy and Peek 2013). The main objective of this report is to focus on two sectors of business that is retail business and service business. For this specific task two selected companies for comparison are the Queste Communication that provides telecommunication services and belongs to the service industry and the Myer Pty Ltd that belongs to the retail industry. These two organizations are selected to comply the requirement of the assignment. Thus, the study will concentrate on various factors like the presentation of annual report, transaction recording approaches, nature of the business they are dealing with and the disclosures policies followed by both the companies (Carey, Potter and Tanewski 2014).
The Queste Communication was founded during 1998 and provides the services related to VoIP supplier for the solutions of telephony software and the related services in Australia. The company provides various services associated with the media services, satellite services, mobile services, telephone services (Queste.com.au 2017).
Queste communication records their transaction related to the sales, purchase and the repayment of the borrowings only when the transactions are performed and the credit sales are accounted for only after the payment for the credit sales are received. Further, the revenue are recognized to affect the shifting of the promised services or goods to the customers at the amount that are revealed at the consideration for the amount at which the entity are expecting to get in exchange of that services or goods (Bond, Govendir and Wells 2016). Moreover, the full loss or gain are recognized only when the transaction involves the business and the partial loss or gain are recognized only when the transaction includes the assets that are not involved under the business irrespective of the fact that the assets are housed under the subsidiary. Revenue from sale of the financial goods, assets or other assets are recognized after the entity passed the control on the financial goods, assets or any other assets to buyer. The revenue from the interest is accounted for on proportional basis taking into consideration the rate of interest that is applicable to financial assets. Further, the dividend income is recognized only when the right for receiving the dividend is established and the other revenues are are accounted for based on the receipt. Deferred tax liabilities and the assets are accounted for the temporary differences at the rate of tax that are expected to apply when the liabilities are adjusted or the assets are received.
As Queste Communication provides services related to the telecommunication and belongs to the service industries their main focus is on the receivable parts. The receivable of the company are accounted at the total amount reduced by the amount of provision for the doubtful debts. The estimate for the doubtful debts is considered only when the accumulation of the full amounts is not probable. However, the bad debts are written-off only when it is established that it will not be receivable. The receivable are divided into non-current and current receivables. The current receivables are further segregated as deposits, other receivables, GST receivables and receivables from the related parties. The amount of each head is individually mentioned in the notes to consolidated financial statements.
Records of transaction
Queste Telecommunication prepares four kinds of statements that are included under the financial reports to present it to the creditors, investors, shareholders and the potential investors of the company. The statements that are prepared under the financial statements are consolidated cash flow statement, consolidated statement for changes of equity, consolidated statement of profit or loss and other comprehensive income and consolidated financial position statement (Lambert 2008). The formats of various statements are shown as below:
From the above presented statement of profit or loss, it can be identified that the total revenue of the company are inclusive of various items like reversal of impairment, net gain from the financial assets that are valued at the fair values and the share of net profit from the associated companies. From the total revenue, various operating expenses like financial, occupancy, corporate and administrative expenses are deducted to get the profit or loss before income tax. From that amount, the expenses for the income taxes are deducted to arrive at the figure of net profit or loss for the year.
It is identified from the above shown figure that the total assets of the company are divided into non-current assets and current assets and the total liabilities are divided as non-current liabilities and current liabilities. The amount obtained for total liabilities are then deducted from the total assets to arrive at the figure for net assets. Thereafter, the total equities are computed to match the amounts with the amount of net assets (Dean and Clarke 2013).
The financial report of the company incorporated the liabilities and assets of the subsidiaries. Further, the subsidiaries of the company are referred as the subsidiaries in the consolidated financial statement of the company. Assets, expenses and revenues are accounted for as net of the amount for GST, except when the GST amount is incurred are not recoverable from the ATO. Further, the intangible and tangible assets are reviewed regularly to check whether there is any indication for the impairment. However, when it is impossible to forecast the recoverable amount of any asset, the value of the cash generating unit is estimated for computation of the recoverable amount of the asset.
Nature of business
Myer is the biggest departmental store from Australia and are well known for fashion and style for over 100 years. They left a valuable footprint for 67 stores under the retail sector all over Australia that are associated with the well-recognized brands and are supported by the recent mobile, digital and online platforms. The combination of these platforms provides leading experience of the omni-channel for the customers who choose to shop from the company. Their main aim of the company is to focus on offering the inspiration to each individual that are inclusive of the customers, shareholders, suppliers, and the communities that are engaged with the activities of the company. They are the significant employer that has long history for the philanthropy and the engagement of the local community. Their merchandise offer 11 core categories of products that include menswear, women wear and children wear, miss shop, intimate apparel, cosmetics, fragrance and beauty. They also deal with the footwear, toys, electrical goods, accessories, handbags and other general merchandise (Myer 2017).
Preparation of the financial statements
The revenue from the good sold is accounted for at the time of sale and are accounted for after the deduction of tax only and it does not involve the concessional sales. Allowances are also made for the returns of expected sales on the basis of the past experiences regarding the returns and the future expectation. Provision for the sales returns are accounted for in the basis of the assessment. Owing to the short-term characteristics of receivables, the carrying amount is assumed to be approximately the fair value. The maximum exposures with regard to the credit risk at the closing of reporting period is carrying amount for each class of the receivables. Information regarding the exposure to the credit risk, interest rate risk and the foreign currency risk with regard to the trade and any other receivables and the risk management of the group are accounted as per the historical information.
As Myer Pty Ltd provides services related to the fashion apparels and belongs to the retail industries their main focus is on the receivable parts. The receivable of the company are accounted at the amount reduced by the amount for provision for the doubtful debts. The estimate for the doubtful debts is made only when the accumulatoion of the full amounts is not probable. However, the bad debts are written-off only when it is established that it will not be receivable. The receivable are divided as trade receivables and other receivables. The amount of each head is individually mentioned in the notes to consolidated financial statements.
Myer Pty Ltd prepares five kinds of statements that are included under the financial reports to present it to the creditors, investors, shareholders and the potential investors of the company. The statements that are prepared under the financial report are consolidated cash flow statement, consolidated statement of comprehensive income, consolidated statement for changes of equity, consolidated income statement and consolidated financial position statement. The formats of various statements are shown as below:
From the above presented statement of profit or loss, it can be identified that the from the total operating revenue cost of goods sold are deducted to arrive at the figure of operating gross profit. Thereafter, from the operating gross profit various operating expenses like selling expenses and administrative expenses are deducted to get the profit or loss before income tax. From that amount, the expenses for the income taxes are deducted to arrive at the figure of net profit or loss for the year (Guthrie and Pang 2013).
It is identified from the above shown figure that the total assets of the company are divided into non-current assets and current assets and the total liabilities are divided as non-current liabilities and current liabilities. The amount obtained for total liabilities are then deducted from the total assets to arrive at the figure for net assets. Thereafter, the total equities are computed to match the amounts with the amount of net assets (He, Evans and He 2016).
The financial report of the company incorporated the liabilities and assets of the subsidiaries. Further, the subsidiaries of the company are referred as the subsidiaries in the consolidated financial statement of the company. Assets, expenses and revenues are accounted for as net of the amount for GST, except when the GST amount is incurred are not recoverable from the ATO. Further, the intangible and tangible assets are reviewed regularly to check whether there is any indication for the impairment. However, when it is impossible to forecast the recoverable amount of any asset, the value of the cash generating unit is estimated for computation of the recoverable amount of the asset (Jones and Caruana 2014).
From the above mentioned statements, it is identified that Queste Communication are carrying on the business of telecommunication and belong to the service industry. On the other hand, Myre Pty Ltd is the largest departmental store that belongs to the retail industries. It is recognized that both the companies account for revenue from the good sold is at the time of sale and are accounted for after the deduction of tax only and it does not involve the concessional sales. Further, information regarding the exposure to the credit risk, interest rate risk and the foreign currency risk with regard to the trade and any other receivables and the risk management of the group are accounted as per the historical information (Bull 2014).
Conclusion
From above discussion it is concluded that, the Queste Communication was founded during 1998 and provides the services related to VoIP supplier for the solutions of telephony software and the related services in Australia. On the other hand, Myer is the biggest departmental store from Australia and are well known for fashion and style for over 100 years. Both the companies prepare their financial statement based on the the Corporation Act 2001 and the receivable, expenses and payables are accounted for at the time of payment or receipt only.
References
Bond, D., Govendir, B. and Wells, P., 2016. An evaluation of asset impairments by Australian firms and whether they were impacted by AASB 136. Accounting & Finance.
Bull, R.J., 2014. Accounting in business. Butterworth-Heinemann.
Carey, P., Potter, B. and Tanewski, G., 2014. AASB Research Report No.
Dean, G.W. and Clarke, F.L., 2013. An evolving conceptual framework?. Abacus, 39(3), pp.279-297.
Guthrie, J. and Pang, T.T., 2013. Disclosure of Goodwill Impairment under AASB 136 from 2005–2010. Australian Accounting Review, 23(3), pp.216-231.
He, L., Evans, E. and He, R., 2016. The Impact of AASB 8 Operating Segments on Analysts’ Earnings Forecasts: Australian Evidence. Australian Accounting Review, 26(4), pp.330-340.
Jones, R. and Caruana, J., 2014. A perspective on the proposal for European public sector accounting standards, in the context of accruals in UK government accounting. Accounting, Economics and Law, 4(3), pp.265-282.
Lambert, S., 2008. A conceptual framework for business model research. BLED 2008 Proceedings, p.24.
Myer. (2017). Myer Today. [online] Available at: https://www.myer.com.au/p/about-myer/the-company/about-us/content-myer-today/ [Accessed 1 Jun. 2017].
Palepu, K.G., Healy, P.M. and Peek, E., 2013. Business analysis and valuation: IFRS edition. Cengage Learning.
Queste.com.au. (2017). Queste Communications Ltd |. [online] Available at: https://queste.com.au/ [Accessed 1 Jun. 2017].
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
