najlaaccounitinghome.files.wordpress.com · Web viewAfter asking my lecturer and read the footnote 11. I found that footnote 11 was all about prepaid expense . ... I felt a bit

ACCT11059 ACCOUNTING, LEARNING & ONLINE COMMUNICATION

ASSIGNMENT STAGE 2 – STEP 3 & 4

NAJLA FARANCY

STEP-3:-Statements of Movements in Equity (SOCIE)I thought that my SOCIE is so easy and straightforward as there are no items listed underneath my other comprehensive income (CI). In other words, I would not need to classify any items into operating and financial CI and all I will be needing would be just linking. I was mistaken as I went through the checking steps to make sure everything was matching I found that I do have three items listed underneath my other CI in the income statement, though these items were not available in my original SOCIE. So, I had to delete everything in my restated SOCIE and start again by adding these items and classifying them into operating and financial CI. Separating these items into operating and financial CI was the hardest part in restating SOCIE, but with great help from my lecturer in MacKay and a couple of peer discussions, it made it easy.

Balance SheetThe first step as with all financial statements is to classify items into operating and financial activities. As I mentioned before this was the hardest part for me of the whole restating financial statements. I believe once this step was done everything else was easy and straightforward especially with Maria’s videos combined with Martin’s explanation in chapter 4. All it was needed was some mathematical skills. So, I started with classifying my balance sheet items into operating and financial activities. At first, I was a bit lost to classify them but with help and advice from my great lecturer and discussed with a couple of my peers I could understand many of them. I also did some future search and found that many of them were very common such as receivables, inventories, property, plant and equipment, goodwill, payables, provisions and other


Intangibles as all are operating. I understood that anything to do with the day to day activities would be operating. I also understood from Maria that anything to do with tax would be operating. The hardest one was to identify whether ‘Other Assets’ is operating or financial activities. After asking my lecturer and read the footnote 11. I found that footnote 11 was all about prepaid expense such as prepaid royalties, prepayments, and prepaid inventory, which is a type of asset that company making payments for goods and services to be received in the future as well as ‘Product development costs”. Therefore, I recognised the other assets as operating activities.

I did not have many financial items in my balance sheet. They were very obvious to identify such as other financial assets, other financial liabilities and interest-bearing liabilities. When I checked for interest-bearing liabilities in my footnote 17, I found it related to borrowing and from my understanding anything to do with borrowing, debt, load, and equity they would be related to financial activities. I felt a bit lucky as I did not have too many items or confusing ones in my balance sheet. I was happy to know that all we need is just to classify assets and liabilities, not the equity, which means fewer items to be worried about to be classified.

When I finished my classification, I started with restating my balance sheet I came over the splitting cash. I was a bit worried how I will do that because when I read it in chapter 4, it does not make sense to me, and I could not understand how I will separate cash into operating and financing activities. It was interesting when I watched Maria’s video and learnt how to separate cash into operating and financing activities. Now I can link what Martin was saying about if a firm has a large level of cash balances we would allocate a small amount to operating assets up 0.5%-1% and allocate the rest balance to financial assets. So, with my company, the percentage of cash out of operating revenue was greater than 1% for the years 2018 and 2017 and less than 1% for the years 2016 and 2015. I could see that the whole cash has been assigned to operating assets in years 2016 and 2015 to conduct their


operations as my company did not have enough cash. In 2018 and 2017 my company had large level of cash balances, so a small amount was allocating to operating and rest balance to financial assets. The feeling of understanding this step was like having a glass of wine so joyful. Then, I proceed with other steps following Maria’s instructions which helped me a lot to understand and make sense of our new accounting equations NOA (debit side)=NFO+E(credit side), which means that our debit side should still balance our credit side. So, when I checked my restated balance sheet my debit side balance credit side which means I was in the right track.

I found that restating balance sheet was very interesting. Although I had some problems at first to classify my items, they became easy to identify with help from my lecturer and search. Following that restating financial statements for me was so easy and straightforward. The reason that I felt so comfortable and confident was that all I was needed is just to follow Maria’s video instructions combined with Martin’s explanation in chapter4 and what he did with his company and applied that to my company. The most exciting part in restating financial statement was doing the checking part to make sure if I have done well with restating or I have missed some figures. Fortunately, for me, everything went so smooth and easy. I must admit that watching Maria’s video and reading Martin’s explanation were in great help to make sense of everything.

Income statement At first, I felt scared and worried about doing this statement because of what I have heard from my peers as it is the hardest one. Possibly also because the video time for this one is longer than the other financial statements. Honestly, once I started to watch Maria’s video and follow her step by step, I found myself enjoying restating my income statement. I thought I would be spending long time to finish it, but actually the longest time I needed was for allocating lines to either operational or financial in the income statement


same with the other ones. I did not have a serious issue I only had a note in restating my income statement.

When I was doing the tax calculation, I found that my company in 2018 has a tax benefit as negative, which mean it has to pay extra taxes around $9.926 million to the bank, and that was because the loan forgiveness it has been given. In contrast, my company has positive tax benefit in the years 2017, 2016 and 2015, which means it saved my company 30% of the amount of tax it paid. Frankly speaking, at some point I was slightly in doubt if I am on the right track because everything almost was going steadily and smoothly in restating my income statement. Until I did my checking list and found that everything is balancing and matching which made me feel so happy and confident with my work as well the feedback I got from my peers insured that my work is correct.


STEP-4:-Feedback given:I found that giving and receiving feedback beneficial. Providing feedback to other peers helped me to find what issues others were facing, which put me to think beyond my company’s financial statements. I found myself more critically thinking to analyse where does the actual problem stand and what can be done to fix it. I found that receiving feedback from peers was also very useful as it gave me more confidence in what I have done and what I have missed. It is like the feeling of someone patting on your back for your hard work. Overall, I believe that feedback is very important part of any learning journey as it is the key to effective change.

PEER FEEDBACK SHEET: ASS#2 Step 4

Feedback From: Najla Farancy.

Feedback to Naomi Taylor

My commentsStep 3

Restated Statement of Changes in Equity

Your restated SOCIE looks quite good, but I think you have to double check why your CI in your restated SOCIE for the year 2016 does not match total CI with the one in the income statement, though it is matching your original SOCIE. I can see that you did correctly calculate your formula, but I do not understand why your total CI for the year 2016 has a different value. From my understanding and based on Maria’s video your CI in your restated SOCIE should match total CI in the income statement. I have screenshot them, so you can see where the difference is. I also found that your closing balance sheet in your restated SOCIE for the year 2017 and 2016 do not match the total equity in your balance sheet. I believe it is because of the same problem with your total CI in your restated SOCIE. So, when I changed CI for the year 2016 to “323.2” I ended up with the exact matching. If you could find where the missing number or figure is and fix the value of 2016, you would kill two birds in one stone. You have done well with your formatting just a small change if you could add “Other” to your heading “comprehensive income” would be clearer and more concise.

https://www.facebook.com/naomi.taylor.3192?fref=gs&__tn__=%2CdlC-R-R&eid=ARB8-qn7kdfxSYds7grcZCx03jAahnP2h9HNlStiLY47lkmwQE5W-lS-rDpMdc-JQspFVZ8yAOM5rIA0&hc_ref=ARRDItGU51Gy5EGc0L2HvqyU_ouvkM-VWx4iPAar6RkMxzkELgIMwblCHZuoAhgAMak&dti=606638232724110&hc_location=group


Balance Sheet

Your balance sheet. I did check the OA+FA= Total Assets, and OL+FL = Total

Liabilities in your original balance sheet and they are matching.

I could notice that your closing balance in restated SOCIE for years 2016 and 2017 are not matching with your Total equity in your restated Balance sheet, which is again related to the previous issue I have mentioned above.


Income Statement

Commentary and Discussion with Others

I also noticed that your percentage of cash out of

operating revenue is greater than 1% so you did well with calculating your cash correctly as I could see how you put up to 1% from your revenue for the operating assets and the rest for your financial assets.

Your income statement looks well set out and match every checking, except that your total operating CI+ total financial CI is not equal to the other CI in your restated SOCIE for the year 2016

Also, few minor adjustments regarding the formatting if you could take out the bolded numbers, so that match your other formatting numbers.

Step 4Individual feedbac

N/A


k with other students

Overall ASS#2 Steps 3 & 4

Overall, I think you have worked very hard on your Step 3, though as I mentioned before there are couple checks, you need to consider in your restated financial statements to make sure everything is correct and related to each other. Good luck with everything!



Feedback To: Ethan Hennessey.

My Comments

Step 3Your Restated SOCIE:-

In your restated SOCIE I found that you have not put a formula in your total other CI. I can see the value is Zero, but I believe you still need to put a formula to show the marker you work. The formula is “ Total other CI = Operating CI + Financial CI.”

I also found that you have linked your closing balance values. Again, you need to put formula and calculate your closing balance. You should get the same result as in your original SOCIE. The formula you need is “closing balance= opening balance + Total CI + Total of Transactions with Shareholders.” Then your closing balance in restated SOCIE should equal to total Equity in your original balance sheet.

You have done well with your total CI as it is matching with the one that in your Income


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Balance Sheet

Income Statement

Statement.

Balance Sheet:- I was wondering why your company does not have

cash. I understood that all companies need some cash to conduct their operation. Have you checked why your company does not have cash?

I could see that you have figure “Cash at bank “ honestly, I’m not sure if this one could be the cash amount that company use, but it is worth to check in your footnote to see that. If it is the case, you need to allocate cash to operation and financial based on Maria’s video.

Also, if “Cash in bank “ is not the amount of cash company use, I don’t believe this one is operating assets because based on chapter 4 page 11 “a firm could also hold cash balances in the bank as a store of value that is not needed in the actual operations of the firm. In such cases, it would be a financial asset” please don’t quote me on that again you need to double check.

Your OA+FA matched with your Total Assets in your financial statement, which is great!

Same with your OL+FL with your Total Liabilities. Also, the total of your NFO+E=NOA are balanced. However, you have summed your NFO formula and you got correct answer because all of your values are zero you would have got incorrect answer if you had values. The correct formula is NFO =FL – FA or if you change the position of formula mathematically would be NFO = - FA + FL.

Income Statement- I did not understand why you have “Total

Financial Comprehensive income” listed under your Financial expenses, as it does not make any sense to me especially with its value because what I can see that your Financial Comprehensive income are “Zero”. I think you may need to


Commentary and discussion with others(Note: You may wish to give some comments on their Excel spreadsheet)

replace “Total Financial Comprehensive income” in that raw with “NFI before Financial CI” then it will make sense. You can compare that with my income statement. Again, I’m not 100% sure so please check with others as well I might be missing something.

Same thing with your “NET FINANCIAL COMPREHENSIVE INCOME AFTER TAX (NFI)” I don’t understand what this one refers to .Do you mean “Net Financial Income after tax “? Also, you need to check your formula, for NFE I know it is OI + NFE= CI in original income statement, but I’m not sure for the NFI. I guess it would be same. You need to check that.

I think you need to add a new raw with heading of “Financial Comprehensive Income” and then list your financial CI items underneath it. You will also need to put a formula to calculate your Total financial CI.

Your total O CI + Total F CI is not equal to your other CI in you restated SOCIE. I believe once you fix your Financial Comprehensive Income as I mentioned above you would be also able to fix this one.

Step 4Individual feedback with other

N/A


students


Overall, it seems you have worked very hard on your restated financial statements, though I believe you still need to do some more checking and recalculating for some of your formulas. Your formatting looks nice and neat. I hope you have found my feedback helpful. Good luck with your assignment.

ASS#2 Step 4 Feedback


Feedback to Dayanara Lopez _ _______________________

My commentsStep 3


I was so impressed with your company’s numbers as they were so huge, your company deals with billions of dollars. I was curious about what your company does?

Your SOCIE: Your SOCIE looks good to me as your total CI

and closing balance are all balanced well, though I think you need to check for “Loss on future cash flow hedge taken to equity” you have classified it as operating. From my understanding, this one would be financial CI because anything to do with equity is financial activities. Don’t quote me on that but it is worth to check. Honestly, I‘m not sure about the other figures whether they are financial or operating CI as they are new to me.

Few minor changes to your formatting. If you could bold your headings of operating and financial CI as well the heading “Transactions with owners in their capacity as owners” will set out your SOCIE nice and neatly

http://dayanaralopez.wordpress.com/


Balance Sheet

Income Statement

Commentary and Discussion with Others

Balance Sheet :

I checked that your total OA + total FA is equal to your Total Assets in the original balance sheet.

Also, OL + FL is equal to your Total Liabilities in the original balance sheet.

Total Equity in your restated balance sheet is matching the closing balance in your restated SOCIE.

I can see that you have NFA instead of the NFO which means that your company has more debit than credit. I could see how differently you have worked around your formula ‘NOA+NFA’ what does matter is that it is balanced and that is the main point. You could have used this one as well NFA -Equity= NFO.

You have done a great job with your balance sheet. You have used the correct formula, and everything seems matching correctly.

Income statement:

It was good to see that you have identified your finance income. I have checked all the formulas, it seems to me you have done well with your formulas and calculation with few minor formatting to be fixed. Your allocation of tax was done correctly as well.If you could take out the bold from some of your numbers that will make your income statement look neater.

Step 4Individual feedback with other students

N/A


Overall, I think you have done a great job and effort with your restating financial statements. I think you


just need a few formatting adjustments. All the best with the rest of your assignment.


Feedback From: Ethan Hennessey

Feedback To: Najla Farancy.

My Comments

Step 3 Great use of the working area down the bottom of the spreadsheet. There were no major issues that stood out to me at all, it’s very well presented, and I think you have shown clearly that you understand the task. In your statement of financial position under the heading EQUITY you have entered contributed equity’s data in bold. Only a very small thing but.


Balance SheetIncome StatementCommentary and discussion with others

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


It looks like you have made great use of the units Facebook page, you seem to be a very helpful student and one that takes their work seriously.


Overall ASS#2 Steps 3 & 4Overall your assignment is looking great, it was a pleasure reading through your spreadsheet and your comments on Facebook. Will be great to see how you attack the next steps in the assignment. Really good work keeps it up.


Feedback From: Dayanara Lopez

Feedback To: Nalja Farancy .

My Comments

Step 3 SOCIE- Your restated SOCIE was well prepared and the balances matched with your original SOCIE. The breakdown of your Other CI also matched with the balance of Other CI in your Income Statement. Well done!

Balance Sheet- I think you separated your O and F correctly. I made the checks based on Maria’s lecture and it all matched. Your OA+FA matched with your Total Assets in your financial statement. Same with your OL+FL with your Total Liabilities. Also, the total of your NFO+E=NOA are balanced.

Income Statement- As per Maria’s instruction, you were able to identify your company’s Finance Income. Your O CI+ F CI matched with your SOCIE CI. Great!


Balance SheetIncome StatementCommentary and discussion with others

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



N/A

Overall ASS#2 Steps 3 & 4Overall, your Step 3 looks good. The formatting is very neat, but I just need you to check some of the spelling errors. You are on the right path.


Feedback From: Kyl Dunne

Feedback To: Naja Farancy.

Step 3 – restated spreadsheet and comments.

Looking through your statements there are a few little spelling mistakesand formatting differences throughout which need tidying up, nothing major though. Couple of bold/italics that don’t need to be there. Have a look back through your headings. Other than that, all the links appear correct and the sums work out. Good job.

The layout is also very tidy and easy to work through. I like your setup. Good job.

Documents

najlaaccounitinghome.files.wordpress.com · Web viewAfter asking my lecturer and read the footnote 11. I found that footnote 11 was all about prepaid expense . ... I felt a bit