analyse and report on the financial reporting practices of a leading Australian organisation that prepares group accounts for a closed group. identify to the extent possible from public records the...

Financial Analysis of BHP Billiton
May 27, 2019
Analysis of group reporting by Qantas
Table of Contents
Description of Closed groups and associated issues    2
Group reporting methods    3
Analysis of closed group reporting    4
Reference List    5
Description of Closed groups and associated issues
The report deals with closed group reporting followed by corporates in Australia. Closed group reporting means that the consolidated results of the group are presented wherein the combined results of all subsidiaries are included. Results of individual subsidiary companies are not presented. The preparation and presentation of financial statements involves substantial employment of efforts and resources of the companies. When the accounts of the group companies are presented as a whole and no individually, this would entail savings in accounting and auditing costs of the companies.
As per AASB 10, single set of financial statements is required to be prepared for the group of business entities which are under control of a parent entity which is incorporated in Australia. Control means the parent company has the ability to use its power which would affect the profitability of the company and the group. (PWC, 2011)The subsidiaries may be based in other countries, but the financial statements of the group are presented as if they are single entity and interest in investments are accounted under the equity method. As per IFRS 10, the consolidated financial statements should be presented by combining all like items of assets, liabilities and cash flows. The carrying amount of investment in subsidiary should be eliminated with the proportionate share capital of the subsidiary. All intergroup transactions, assets and liabilities need to be eliminated. There should be uniform accounting policies to be followed within the consolidated group reports. The Non-Controlling Interest in the subsidiary should be presented separately from the equity of the group. The accounting period for all the companies within the group should be same. (CPA Australia Ltd)
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