This assignment aims at developing a clear understanding of students on the different sources a company can use to raise its funds. Students will perform a comparative analysis of sources of fund used by two selected companies for a three years period. They will identify the movement in the sources of fund used by the two companies. Students will also need to demonstrate a clear understanding of different classifications of entities for reporting purposes.
Select the latest annual report of two ASX listed companies for the last three years period. Please read the balance sheet carefully and complete the following tasks:
(i) What items have been recorded under owners’ equity section? Clearly explain your understanding of each item recorded under the owner equity section.
(ii) Explain the movement in each item recorded under the owner equity section with the reason
(iii) What items have been recorded under liabilities section? Clearly explain your understanding of each item.
(iv) Explain the movement in each item recorded under liabilities section with reason.
(v) Briefly explain the relative advantages or disadvantages of each sources of fund each of your selected companies is using.
Do your own research and critically examine the concepts of small proprietary company, large proprietary company and reporting entity. What are the implications of being classified as either one of these three types of companies in terms of compliance and reporting requirements?