STEP - wendykon13.files.wordpress.com … · Web viewI had felt like I was missing something and...

NAME: WENDY KONSTASSTUDENT ID: 12053602

ACCT11059 ACCOUNTING, LEARNING & ONLINE COMMUNICATIONMARTIN TURNER

ASSESSMENT #2: STEPS 3 & 4

STEP 3: RESTATING FINANCIAL STATEMENS

I’ve changed my tune since my last update. This was bigger than Ben Hur.... I ended up watching the video three times and completely restated both the Balance Sheet & Income Statement in the end. It obviously took a while for it all to sink in.

In saying that though, I found Dr Maria Tyler's videos very easy to follow whilst madly trying to keep up with her as she is obviously very proficient in Excel. This obviously doesn't mean

that after doing them twice, they are totally correct but at least I’m not thousands of dollars out and scratching my head about where I went wrong.

Tessa Large was kind enough to help me out on our Facebook page pretty quickly and her input was really helpful. I had two lots of Annual Reports with ambiguous entries called 'Other Income' under Other Income (helpful!!) and 'Other Revenue' under Other Revenue (also very helpful *%$!!) with nothing in Notes to say what they were related to.

Initially, I did have concerns with two issues that didn’t seem to make sense to me as I was going through it. My company’s financial statements had no amounts listed at all over a four-year period for income tax expense.

I also had a discrepancy in the Financial Statements for the year ended 30 June 2017 for my company. Under ‘Other Income’ in the Income Statement or Statement of Profit or Loss there was an amount of $1,087,000 for the year ended 2016, however in the Financial Statements for that year the amount was only $5,000. There was no Note attached to it in the 2016 Annual Report however there was in the 2017 Annual Report where the amount of $1,08,000 ($1,087,000 less the $5,000) was listed as Net Fair Value Gain on other financial Assets.

Wendy Konstas

I participated in a few conversations on our Facebook page as per the screenshots below and enjoyed discussing the differences and similarities between our companies and figures. I felt quite relieved when I came across Tessa Large’s comments about not having any income tax expenses as I had the similar situation. I had felt like I was missing something and went scrolling through all the Notes to the Financial Statements in the Annual Reports looking for a reason why.

I also, originally, thought that I had a similar situation as Jacqui Jordan in that for two of my four years the assets were larger than the liabilities and then the other two years were the other way around. After watching the videos for a third time, I realised that I had made an error and pretty much changed things completely around and it started to all fall into place at this stage.

Wendy Konstas

I don’t normally relish the thought of receiving feedback from others but with this assessment step I found it both extremely helpful and frustrating in a way as I’d already patted myself on the back for the spreadsheet seeming problem-free!

Toni Daniels had me questioning my allocation of Borrowings in my Balance Sheet as well as many others things. I did mull over this whilst watching Dr Tyler’s video and decided to go back and revisit this. The Notes to my Borrowings, Current and Non-Current are below. I ended up changing them both from Operating to Financing, which I hope is correct.

Wendy Konstas

Toni also gave feedback on my Revenue being lumped into one entry on my Restated Income Statement. I’m not quite sure how I missed this but I praise her for picking it up and I’ve now singled the entries out and allocated them accordingly. Toni’s feedback made me question, and therefore, totally re-think this part of my restatement and I ended up pretty much starting again from scratch. I totally redid the whole restatement for both the Balance Sheet and the Income Statement and I’m so glad that I did. The first time I felt like I was just punching in numbers whereas the second attempt actually made sense and I could see the jigsaw pieces actually fall in to place.

When initially faced with this step in the assessement I was questioning why it was done but I can see now why. It was interesting to see the differences in each set of statements especialy when calculating the cash allocations to Operating and Financing. I hadn’t really thought about the amount of cash my company had to allocate in the 2017 financial year and it did make me question my initial thoughts on how badly I thought the company’s financial state was.

All in all, I found this exercise quite useful and I did actually learn something and had a few light bulb moments. It just goes to show that feedback from others is invaluable and I think I’ll be more welcoming to it in the future.

STEP 3: FEEDBACK ON STEPS 3 & 4

I received some quite extensive feedback from Toni Daniel, who has become one of my main contacts in this subject and we regularly give each other feedback and hints.

Feedback From: Toni Daniel

Feedback To: Wendy Konstas

Wendy Konstas

My Comments

Step 3

Restated Statement of Changes in Equity

Balance Sheet

Income Statement

Commentary and discussion with others

Restated Changes in Equity

All is good, formulas where they need to be. All balances.

Balance Sheet: You have borrowings in your current and non-current liabilities, is there anything about this in the notes? Without reading the notes, I would think that they would both belong in the financial area. The notes might be telling you something different though. Also the deposits in the operating assets, I would think a deposit might be something like a term deposit and would be a financial asset. (You have already divvied your ‘working’ cash up into operating or financial – any leftover lump cash should then go to financial) (I think, don’t quote me, but that is what I would do!)

All your formulas are good, I would prob put form in for row 57 and 59, even though it is pretty much all straight from the first sheet. All your OA + FA = total assets etc etc. NFO + Equity = NOA. All looks good.

Income Statement: Revenue, you have only the total lumped into one line on your restated income statement, it should be divvied up into the five different accounts on your fin statement. (Commission Revenue, Interest etc) Interest is a financial activity and is your ‘Finance Income’ that Maria talks about in her video, it definitely needs to be separated.

Impairments in assets is correctly allocated, this is I guess the same as a revaluation, except the value went down not up.

Impairment in investment in associates though – this is an investment in another business entity. I would think that would be a bit like a joint venture, it is an outside equity investment with the goal to make money. It is not a property, plant equip or inventory that they are using in their everyday general business, so I would consider it to be a financial activity. My thoughts are that it should go as a financial expense. It is an impairment as they lost money, not made money.

Same thing with Share of Profits/losses of associates.

Check your formulas, you need to bring over cells from the first sheet even if the value is $0 (Cell L70, J95 etc) Something has gone wrong also with some of your other cells which seem to be merged (KLM – 82, 80, 78, 76, 74)

Formulas for Row 97, should add 93-96 even though some of them are $0.

Wendy Konstas

Your tax expense is $0, so that is easy.

Your CI was still the same as the first sheet, even though some of the figures had not come over! Not sure how that worked.

Happy to look at it again after you make changes – email me.

Step 4

N/A at this stage (30.04)Individual feedback with other students

Overall Ass#2 (Step 3 & 4) Step 4, not yet applicable.

Step 3 – your spreadsheet still needs a bit of work. Classifying into operating and financial, divvying up the accounts where applicable, instead of one lump sum going over, formulas.

It does look well set out and easy to read with headings bolded etc, but still a little bit of work to do.

PEER FEEDBACK SHEET: ASS#2 Step 4

Feedback From: Tegan Johnston


My Comments

Step 3 Looks good the years all add up, your transaction with shareholders hasn’t been linked to your original.

Some of your sub totals haven’t been summed they have just been linked over.

You haven’t linked any of the titles or numbers in your income statement.

Your comments and discussion on step 3 is very informative.

Restated Statement of Changes in EquityBalance SheetIncome StatementCommentary and discussion with others

Step 4Individual feedback with other students

Please send me links of your completed feedback and I will comment on this for you.

Overall ASS#2 (Steps 3 & 4) Overall I think you have done really well, just need to fix up your linking and unlink some of your totals and complete the sum.

That way if there is a mistake it will make it easier to find the

Wendy Konstas

mistake.


Feedback From: Cassandra Hellen


My Comments

Step 3 Your restated financial are extremely easy to follow Was it in your notes that ‘investments using equity

method’ and ‘financial assets at fair value’ were operational? I have classified this as financial. My thought process was that if it is a capital investment in a subsidiary company it would be considered financial. In saying that, I’m finding the classification of items are at the company’s discretion.

The restating layout follows Martin and Maria’s instructions

Your OI, NFE and CI all balance with the financial statements (how good is that feeling)

Restated Statement of Changes in EquityBalance Sheet

Income Statement


(Note: You may wish to give some comments on their Excel spreadsheet)

Step 4

Individual feedback with other students

I couldn’t find any individual feedback sheets from you Wendy. But I did notice you were active on Facebook, giving feedback on people’s queries, especially when you encountered similar problems that they were facing.

Overall ASS#2 (Steps 3 & 4) As mentioned before your financials are extremely easy to follow and the layout is as Martin and Maria suggested. There are a couple of things that I may have classified differently, but that all depends on how your company has described them in the notes. My company had no notes to follow so I just did research online to help classify and followed Maria’s guidance when she classified items on her tutorials. My feedback is short and sweet, but that’s because I cannot find anything wrong. Well done and good luck with the rest of assignment 2.

Wendy Konstas

PEER FEEDBACK SHEET: ASS#1

Feedback From: Wendy Konstas

Feedback To: Rebecca Loughnan/Elenore Cross

My Comments

Step 3 Your restated Statement of Changes in Equity seemed to all be there and the figure was totalled correctly.

In your Balance Sheet I thought that the deferred tax asset & income tax entries in both your Assets & Liabilities should come under Financing rather than Operating. It was nice to see that you had NFA rather than NFO which I think is the majority of us.

I had been advised in feedback given to me to separate out ‘Revenue’ so you can define what is Operating Revenue and Financing Revenue. I found this changed my restating quite substantially, so you might want to consider doing this also. I also thought that you should be listing out the other entries as they seem to be all grouped together in your Income Statement.

You seem to have linked all the relevant cells and totalled all the relevant cells that needed to be done.

I’m presuming that your restated statements are in quite a draft form and therefore the formatting will be fixed up before you submit them.


Balance Sheet

Income Statement


(Note: You may wish to give some comments

on their Excel spreadsheet)

Step 4


I’ve really enjoyed discussing all things financial statements with you Rebecca/Elenore (not sure which one to call you!!). I’m grateful that you reached out to others to form a ‘posse’ for exchanging feedback which really put my mind at ease. You’ve been quite interactive with other students in asking & providing feedback.

Overall ASS#2 (Steps 3 & 4) Overall, you look like you’re on the right track with a bit of tweaking and finessing. Your company’s financial situation and statements are quite different than mine so I enjoyed seeing how yours all came together.

Wendy Konstas



Feedback To: Tessa Large

My Comments

Step 3

Your SOCIE looks good and well set out but you do have the Total CI line twice (13 & 14) so you could probably remove one.

Your Balance Sheet looks good. You have Provisions twice and I’d probably just add the two together and just have one entry.

I see that you have both NOL and NOA and I know we discussed this on the FB page, but looking at it now I question whether you should probably do two lines, one for NOA and one for NOL. In saying this though, you can’t change the order that you’ve done i.e. OL at the top and OA underneath. I hope you have received some guidance on this because I have to admit I don’t know the answer.

Tessa, your number formatting in your Balance Sheet & Income Statement is different than from your Statement of Movements in Equity in that you have a .0 in the number which should be removed.


Balance Sheet

Income Statement




Step 4


I’ve enjoyed interacting with you online & you’ve been quite active in reaching out, which is a really good thing. I’d probably include some of your feedback with others on your Commentary which I’ve just read and enjoyed.

Wendy Konstas

Overall ASS#2 (Steps 3 & 4) Great job Tessa. You seem to have really grasped the idea of what is financing and what is operating, which is really the whole idea of this exercise 😊



Feedback To: Sarah Hammond

My Comments

Step 3

Your Statement of Changes in Equity looks good, well set out, all the links are in place and the totals have been formulated.

In your Balance Sheet, you have Borrowings under Operating which usually goes under Financial. I would need to read your Notes to understand why you’ve put them in Operating though. You also don’t need to have separate entities for non-current & current, you can total them and just put one entry for Borrowings.

Also, Trade and Other Receivables is Operating and not Financial.


Balance Sheet

Income Statement




Step 4


I can’t see any feedback with any other students at this stage so am unable to comment.

Wendy Konstas

Overall ASS#2 (Steps 3 & 4) Good job Sarah other than a few changes that need to be made. Your company looks quite complicated and being UK based also there are some entries which aren’t straight forward. All in all, really good effort & I wish you well.

Wendy Konstas

STEP - wendykon13.files.wordpress.com … · Web viewI had felt like I was missing something and...

Documents

Transcript of STEP - wendykon13.files.wordpress.com … · Web viewI had felt like I was missing something and...