Accounting

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Accounting

Question A

NIB Health Funds is termed as one of the largest health insurance entities in Australia providing both medical and health cover to more than 1.1 million citizens in Australia and New Zealand (NIB Holdings Limited). The entity adheres to set out financial reporting and accounting standards as provided within the International Financial Reporting Standards (IFRS). This applies to TPG Telecom Limited, which is an Australian entity in the information technology, and telecommunications industry that provides specialized services in business and consumer internet and mobile telephony services (TPG Telecom Limited). The use of the International Financial Reporting Standards (IFRS) is critical for the two entities given that it ensures accuracy and ethical reporting and provision of financial statements to the respective shareholders

From the financial statements of both entities, they adhere to set out Australian Accounting Standards Board as well as the Corporations Act 2001. Furthermore, it is noted within the reports of the importance of compliance with set out accounting policies. They both use conventions provided by the International Financial Reporting Standards (IFRS) and the International Accounting Standards Board (IASB) that give emphasis for the need to provide costs based on the historical cost assumption, provision of comparative information and the use of critical accounting estimates given that the two are profit-oriented entities (International Accounting Standards Board). Furthermore, it is noted in both statements of subsequent events, which have a material effect on the financial statements within the periods or preceding financial dates.

Question B

NIB Health Funds’ financial statements note that it has complied with all expectations of the Australian Accounting Standards Board and the Corporations Act 2001. Compliance with the International Financial Reporting Standards (IFRS) and the International Accounting Standards Board (IASB) provide that the entity ensure it discloses all the changes within the ownership interest held in the organization. The entity notes that it treats all transactions that have non-controlling interests and do not arise in loss of control as part of engagements with the transaction equity owners. In addition, any changes in ownership interest are followed by subsequent adjustments in the carrying amounts of the non-controlling and controlling interest with the aim of reflect the relative interest of shareholders within a subsidiary entity. Differences noted between the adjustments between the consideration amount paid and the adjustments for the non controlling interests  is provided within an equity reserve account for the equity amount attributable to the owners or shareholders of NIB Health. Ceased control of the entity or joint control is re-measured based on fair value of such holdings with appropriate changes in the carrying amounts which are recognizable within the profit loss accounts of the organization.

TPG Telecom has adhered to accounting standards that ensure adequacy in disclosure of all financial information and subsequent activities. Ensuring that there are adequate disclosures of all subsequent events that occurred after the reporting or preparation of financial statements is important given that it ensures that the shareholders are provided with the appropriate information that affects the financial position of the organization or their respective investments in the organization. Subsequent events are defined as transactions or events, which can be termed as additional evidence over the financial conditions that prevailed during a financial period or in the period of preparation of the financial statements. Furthermore, it is inclusive of material financial activities, which did not exist during the balance sheet period and arose after the preparation and reporting of the financial statements.

Works Cited

International Accounting Standards Board. International Financial Reporting Standards (IFRS) 2007: Including International Accounting Standards (IASS) and Interpretations As at 1 January 2007. London, U.K: International Accounting Standards Board, 2007. Print.

NIB Holdings Limited. Annual Report 2014. Sydney: NIB Holdings Limited, 2014. Print.

TPG Telecom Limited. Annual Report: TPG Telecom Limited and its controlled entities 31 July 2014. Sydney: TPG Telecom Limited Print, 2014. Print.