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Obtaining a Restraining order under - Free Essay Example

Sample details Pages: 4 Words: 1188 Downloads: 4 Date added: 2017/06/26 Category Law Essay Type Cause and effect essay Level High school Tags: Act Essay Did you like this example? Restraining order under S.176(10) A restraining order will only be given by the court when a scheme or an arrangement is proposed to the court under the consideration as accordance to s.176(1)(3) to prohibits the court in granting any further action towards the said company. However such application must be applied to court before any orders or resolution has been passed by the court to any interested party and after procedures which laid down from s.179(1) to s.179(9) has been closely fulfill. The courtà ¢Ã¢â€š ¬Ã¢â€ž ¢s order to restraint further proceedings can define as to the restriction of any further action to be taken against the company[1] for examples: the action of appointment of a receiver under a debenture. Don’t waste time! Our writers will create an original "Obtaining a Restraining order under" essay for you Create order Extension of restrain order under s.176(10A)(a)(b)(c)(d) S.176(10A) of the Act states that the court may grant a restraining order under the powers granted by the Act for a period not more than 90 days. However, the period of time of the said restraining orders is subjected varied as to any good reasons which been provided to the court and the court by its discretion, deems fit, allow if and only if (a) there is a scheme of compromise and tolerance between the company and its creditors or any class of such creditors which consists at least one half of the total creditors; (b) the order of restraining is necessarily to formalize the scheme of compromise for the approval of creditors; (c) statement in the prescribe form as to the affairs of the company made up is not more than 3 days before the lodging of application; (d) court allows a person nominated by the creditors of the application to act as director, if the person is not a director, notwithstanding the provisions of the A ct or the memorandum or the articles of the company, appoints such person to act as director[2]. Under the case of Pelangi Airways Sdn Bhd v Mayban Trustee Bhd[3], the courtà ¢Ã¢â€š ¬Ã¢â€ž ¢s decision suggest that the compliance to the requirements under s.176(10A)(a) to (d) is only required when any application for restraining orders of more than 90 days is made. However, this principle was later rebutted by a latter case. In the case of RE PECD Bhd (No2)[4], applicants applied for a 30 days extension over the original granted restraining order of 60 days as accordance to s.176(10A). One of the creditors opposed and objected the application on the reason that s.176(10A)(c),(d) was not followed as there was a statement of the affairs of the company was not lodge together with the application and there was no creditors nominated to act as a director of the said company. The applicant argued that the subsection of s176(10A)(c) and (d) does not apply to them as their application was n ot exceeding 90 days. The grammatical wordings of à ¢Ã¢â€š ¬Ã‹Å"if and only ifà ¢Ã¢â€š ¬Ã¢â€ž ¢ and the subsections were argued that it is for à ¢Ã¢â€š ¬Ã‹Å"a such longer period which the court may for good reasons grantedà ¢Ã¢â€š ¬Ã¢â€ž ¢ and not à ¢Ã¢â€š ¬Ã‹Å"a period of not more than 90 daysà ¢Ã¢â€š ¬Ã¢â€ž ¢. The court dismiss the application and held that the compliance to s176(10A)(a) to (d) is mandatory as accordance to the real intention of the legal draftsman had intended to[5]. The court also requires a à ¢Ã¢â€š ¬Ã‹Å"good reasonà ¢Ã¢â€š ¬Ã¢â€ž ¢ when the application of extension of restraining order was applied to the court. Following the case of Metroplex Bhd v Morgan Stanley Emerging Markets Inc; RHB Sakura Merchant Bankers Bhd (Intervenes)[6], it was held that good reason includes: (a) bona fide scheme of arrangement with sufficient details for creditors, (b) the scheme must not be bound to fail, (c) the interest of the beneficiaries (creditors) under the sche me must be safeguard. The consequences of the restraining order granted s.176(10B) to (10G). After the above discussion, according to s.176(10A)(d), a creditor can act as a director and he has the power and rights to access the accounts, records and documents of a company. He is also entitled to have information and explanations from any officer of the said company upon inquiring them[7]. After obtaining the order from the court, any kind of deposition over the properties registered under the company is not allowed. This shall include things in action and any acquisition of property of the company but not properties in the normal course of business. If any deposition was made by the company for such kind of property after the grant of order from the court shall be regard as void, provided the court orders otherwise[8]. Any officer who default in such shall be guilty of an offence, which carries punishment of an imprisonment not more than 5 years or a fine not exceeding RM1 million or in certain cases both applies[9]. By relating to case Intrakota Komposit Sdn Bhd Anor v Sogelease Advance (M) Sdn Bhd[10], the applicant applied an application under s.176(10C) for the leave of court for the dispose of companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s asset to another company. The court later on granted the leave and allow the applicants to dispose the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s property to another party, as result freeing the applicants from the liabilities of S.176(10D). As compared to another case, which is Pelangi Airways Sdn Bhd v Mayban Trustee Bhd[11], in this case the Pelangi Airways Sdn Bhd had after the court granting the order of restraint, dispose off certain properties without obtaining the leave of court. Therefore, court rule that Pelangià ¢Ã¢â€š ¬Ã¢â€ž ¢s restraint order was held irrgular and to be set aside. The cases comparison shown us that the court took a serious approach in the compliance of s.176(10C), although the non-compliance of such section will no t automatically trigger the liabilities under s.176(10D), but it will likely to have the restraint order to be set aside or cancel off. When the order made under s.176(10), company in relation to which the order is being made must within 7 days, either (a) lodge an official copy of order to CCM, and (b) publish a notice of the order in a daily newspaper circulating over Malaysia in order for the members and creditors of the company to have knowledge of the restraint order. This can avoid future court proceeding brought on by the members or creditors that claim that they have no knowledge over the said restraint order. Failure of complying such requirements will result in an guilty of an offence which punishable with a fine not more than RM100 thousand[12]. [1] Re Artistic Color Priniting Co (1880) 14 ChD 502. [2] S.176(10A) of the Company Act 1965, https://www.ssm.com.my/acts/fscommand/CompaniesAct.htm, Accessed on 12th of December 2014. [3] [2001] 2 MLJ 237. [4] [2008] 10 CLJ 486. [5] https://www.cljlaw.com/Members/DisplayCase.aspx?CaseId=2837776897SearchId=, Accessed on 12th of December 2014. [6] [2005] 6 MLJ 487. [7] S.176(10B) of the Company Act 1965. [8] S.176(10C) of the Company Act 1965. [9] S.176(10D) of the Company Act 1965. [10] [2004] 8 CLJ 276, https://www.cljlaw.com/Members/DisplayCase.aspx?CaseId=2748713473SearchId=5mmu3, Accessed on 12th of December 2014. [11] [2001] 6 CLJ 129, https://www.cljlaw.com/Members/DisplayCase.aspx?CaseId=2658869761SearchId=6mmu3, Accessed on 12th of December 2014. [12] S.176(10E) of the Company Act 1965.

Amazon s Financial Reporting Model Essay - 2049 Words

The company I selected is Amazon, Inc.com and it’s considered the â€Å"everything store†. It supply’s consumers with low prices from supplying vendors at a cheaper shipping rate included because of the companies contracts with United States Postal Services and UPS. All companies must follow specific orders and guidelines to do business in the United States. The SEC, or Securities and Exchange Commission, is the government entity that is responsible for looking after the economy by keeping corporations and businesses honest. Each company must file their financial reports to the SEC and have a chance of being audited by the PCAOB, or Public Company Accounting Oversight Board. Amazon Inc. com is one of those businesses. Amazon’s financial reporting model has assumptions and principles, there are individuals responsible for overseeing the accounting professions and they must file an annual report as well as a 10-K and 10-Q report, and many disclosures that are available to the public. 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Political Nature of Accounting Standard - MyAssignmenthelp.com

Question: Discuss about the Political Nature of Accounting Standard. Answer: Introduction The business corporations need to develop and disclose all the relevant financial and non-financial information to the end-users for promoting transparency in the business operations. The development and preparation of financial reports by a business corporation require the adoption of specific accounting policies and procedures as directed by the IASB (International Accounting Standards Board). The accounting policies and procedures are developed by the IASB on the basis of various accounting theories such as normative and positive theory of accounting. The accounting theories has lead to the development of a conceptual accounting framework that has stated the four basis qualitative characteristics to be possesses by financial information (Marley and Pedersen, 2015). These qualitative characteristics are relevancy, reliability, comparability and understandability that are required to be possessed by financial information for meeting the needs and expectations of the end-users. The a ccounting policies help the businesses to develop a specific accounting strategy for developing high-quality financial reports. In this context, the present report is aimed at analyzing and examining the specific accounting policies and estimates of an ASX listed firm, that is, Wesfarmers limited. The compliance the financial reports of the company as per the standard accounting policies is evaluated in the report along with the comparison of its accounting strategy with its rival companies, that is, Woolworths Limited. Identify Key Accounting Policies The accounting policies adopted by Wesfarmers in development of its financial reports are in accordance with the Corporations Act 2001 and Australian Accounting Standards Board (AASB). The financial statements of the company are developed as per the historical cost basis except for investment held by associates, financial instruments and available for sale investment that are measured at the fair value. The financial figures in the general purpose financial statements are presented in Australian dollar by rounding off to their nearest million values. The company develops its general purpose financial statements as per the principle of consolidation according to Companies Act (Wolk, Dodd and Rozycki, 2012). The principle of consolidation requires all business entities to integrate the financial information of all their subsidiaries as a single economic entity. The acquisition of subsidiaries is accounted through the use of acquisition method of accounting that involves identifying and measuring the fair value of assets, liabilities and non-controlling interest at the date of acquisition. The company has also adopted significant accounting policies as per the AASB rules for monitoring and controlling the risk involved in its business operations. For example, the company have adopted AASB 7 standard for controlling the risk exposure relating to the financial transactions involving transferring of assets (Wesfarmers: Annual Report, 2016). The risk management policy of the company is actively involved in managing and controlling the risk related to market exposure, foreign exchange, credit rating and liquidity risk. The company manages the liquidity risk through introducing flexibility in its capital structure by forecasting the ratio of debt and equity (Kenny, 2009). The company manages the market risk exposure through the use of sensitivity analysis that helps it in predicting the movements of foreign currencies. The company also uses hedging for addressing the foreign currency risk and therefore minimizing its foreign currency risks (Wesfarmers: Annual Report, 2016). Assess Accounting Flexibility The accounting mangers have authority to introduce some specific changes in the standard accounting policies and procedures for achieving certain corporate objectives and goals. The fact can be supported from the findings of positive theory of accounting which states that accounting managers selects the specific accounting policies that helps in maximizing the value of firm. As per the theory, the accounting methods selected by a firm should reflect its best financial performance and as such some discretion is provided to the management for introducing flexibility in the accounting framework. Thus, the accounting regulations implemented by IASB should not eliminate the managerial flexibility and there should be left considerable scope for accounting managers to influence the financial statements. As such, it can be inferred from the analysis of financial reports of Wesfarmers, that the mangers have adopted certain judgments and estimates in the standard accounting policies. For example, the carrying value of assets and liabilities are estimated on the basis of future situations that can impact the materiality of the financial statements in the future reporting period of the company. In addition to this, the recoverable amount of non-current assets during impairment testing is esteemed on the basis of the future cash inflows of assets. The useful lives of the fixed assets of the company such as property, plant and equipment are estimated through the application of judgment of management in support with the internal consultation obtained from experts. Also, the net realizable value of inventories is estimated by the management on the basis their sales price in the normal course of business. Therefore, the estimates and judgments made by the management during the adoption of spe cific accounting policies may pose a materialistic risk in the financial statements developed by the company. However, the flexibility provided to the management should not distort the financial performance of the company for maximizing the personal benefits of the managers but should be only done for achieving the corporate goals and objectives (Wesfarmers: Annual Report, 2016). Evaluate Accounting Strategy The accounting strategy is developed on the basis of specific accounting policies implemented by a firm for the preparation of its general purpose financial statements. The accounting strategies are developed on the basis of corporate mission and values in order to develop the financial performance of a company as per its strategic goals and objectives. The Wesfarmers accounting policies are developed as per the industry norms in order to attain a competitive edge over the competitors. The Wesfarmers Limited is a supermarket giant of Australia and therefore need to implement competitive accounting strategies for outperforming the competitors. The main competitor of the company in Australian retail market is Woolworths Limited. Both the companies develop their financial reports as per the Corporations Act and AASB standards. However, there exist some significant difference between the accounting policies and procedures adopted by the both the companies. The carrying value of assets an d liabilities in Wesfarmers are estimated on the basis of future vents but it incorporates the use of hedging for estimating the fair value of assets and liabilities (Wesfarmers: Annual Report, 2016). The Woolworths Limited, on the other hand, does not implement the use of hedge accounting for recognizing the estimated carrying value of assets and liabilities for the next reporting period. The capital structure maintained by Wesfarmers can also be regarded to be better as compared to Woolworths (Woolworths: Annual Report, 2016). This is because Wesfarmers have maintained a higher level of equity as compared to debt in its capital structure while Woolworths have a high level of debt liabilities in comparison to equity. Thus, it can be said that Wesfarmers possess good investment quality as compared to Woolworths because it does not have higher financial obligations and therefore there is less risk for the investors. The Wesfarmers have also maintained a simple income statement as compared to Woolworths that possess complex structure. The income statement of Woolworths is rather complex that makes it difficult to be understood by the end-users with numerous sub-sections. However, bo th the companies are showing positive financial performance with the increase in dividends provided to the shareholders. The growth strategy pursued by both the companies is significantly different from each other with Wesfarmers increasing its cash flows by selling the asset base. On the contrary, Woolworths Limited is increasing its cash flows through investing in new ventures. Thus, it can be said that management of Wesfarmers have introduced flexibility in the accounting policies to maintain a competitive edge over its industry peers (Sheridan, 2016). In addition to this, the management also exercises discretion in disclosing the information related to incentives facing managers. The Wesfarmers Limited have adopted a remuneration committee in order to provide recommendations to the Board in deciding over the matters the remuneration structure to be adopted for its key management personnel. The incentive schemes of the company are based on achievement of certain performance targets. The company provides annual incentives to its KMP on the basis of achievement of strategic objectives whereas the long-term incentives are provided on the basis of maximizing the shareholder value. Therefore, the management has adopted the specific incentive policies that are in accordance with its corporate goals and objectives. The management holds discretion in deciding the incentive policy but has maintained that the incentive schemes does not lead to occurrence of nay fraudulent activities such as manipulation of financial information by the KMP fo r maximizing their incentives (Albrecht, 2010). The management has aligned the incentives received by the KMP with the performance targets to avoid the occurrence of any fraudulent activities in order to maximize personal gains by the KMP. The change in the accounting policies are carried out by the management for achieving certain accounting objectives. For example, the change in the accounting policies related to measurement of its financial instruments, managing incentive plans of managers and norms for attaining competitive advantage are carried out by the management as per the business operations of the company (Wesfarmers: Annual Report, 2016). Analysis of the disclosures made by the selected company On the basis of the review of the notes to accounts below the financial statements of the company it can be said that disclosures provided are reliable, relevant, comparable and understandable. So it can be said that disclosures made by the company meets the requirements of the accounting standards and shareholders of the company (Mintz, 2013). The financial and non financial information provided in the notes to accounts have been included as per the defined accounting policies taken by the company to draft the financial statements. It has been seen that there have not any footnotes under financial statements that will guide the accounting standards used to prepare the financial statements (Henderson et al., 2015). As the footnotes have not been provided under the financial statements, there has been violation of understandable principle of conceptual accounting framework. As per the understandable principle of the conceptual framework, annual report must be prepared in such a way th at it can be easily understood by the users of the annual report. Footnotes help the users to check which accounting standard has been used to calculate the value of different items in the financial statements. For example, IAS 16 or AASB 116 has been used to calculate the value of property, plant and equipment (Gray and Manson, 2007). The notes to financial statements are detailed information on how each accounting standards has been implements by the company and there are specific guidelines described under Generally Accepted Accounting Principles (GAAP) to prepare each notes to accounts. GAAP contains the defined set of accounting principles that need to be followed by the business entities for preparation of the financial statements and notes to financial statements (Bragg, 2010). The current performance of the Wesfarmers is very strong and notes to accounts have explained the performance of the company in the same manner as the financial statements of the company. For example, income earned from various CGUs of the company are combined and shown under the notes to accounts in very proper way so that it can be easily identified which unit has contributed more as compare to other. Notes to accounts are such that they must provide the real financial performance of the company. Any information has been missed in t he financial statements than it must be included in notes to accounts so that each and every financial data can be included in annual report (Wesfarmers: Annual Report, 2016). Wesfarmers has used the Australian GAAP to prepare the financial statements and notes to accounts. Australian GAAPs have been drafted after considering the IAS accounting standards. The IAS accounting standards have been drafted by the international accounting body and they are defined in such manner that requirement of each class of companies can be fulfilled together with the requirement of the users of the annual report. So it can be said that GAAP reflects the perfect pictures of the financial statement and also provide the base for the company where they can show financial data that are regarded as the key measures to success (Horngren et al., 2012). Also it must be noted that no rules is so perfect that there cant be any error. The Australian GAAP has although drafted from the IAS standards but there are some issues that need to be considered for revision (Wesfarmers: Annual Report, 2016). Every company has to disclose the information regarding their operating segments as profits from each segments has to be reviewed for analysis purpose. In case any operating segment is providing loss regularly than proper steps can be taken to reform the operating segment or close it down to shift the assets to the operating segment that is giving enough revenue. In the annual report of the Wesfarmers, there has been proper disclosure of the financial data from the operating segments. All these disclosures are made as according to the AASB standards (Wesfarmers: Annual Report, 2016). The major operating segments of the Wesfarmers are retail, department stores, industries and other operating segments. Retail operating segment is presented as the Coles and it is biggest unit in the Wesfarmers. There is sufficient disclosure regarding the operating segment like revenue earned through each operating segment and profit made after expenses incurred in respective segments. Complete financia l analysis can be conducted through financial information provided in the annual report (Wesfarmers: Annual Report, 2016). Potential Red flags in the annual report Although there have sufficient discourses in the annual report of the Wesfarmers but still some issues may pertain while preparing the annual report. This part of the assignment will define various issues that are included in the annual report and can be regarded as the potential red flag. While preparing the annual report various accounting judgments and assumptions have been taken that has impacted the material characteristics of the financial data (Mumba, 2013). The assumptions and judgments have been taken in the annual report that requires the need to provide sufficient disclosures regarding each financial item. It has been reviewed from the annual report that accounting transactions involved in the financial instruments have impacted the profitability of the company a lot. There has been increase in inventory a lot which is not satisfied with the small increase in the sales value. It can be judge from the income statement and the balance of the company (Bamberg and Spremann, 20 12). So there is requirement to provide how the inventory has increased a lot in the notes to accounts. Reasons must be sufficient enough to clarify why such increment has been done (Wesfarmers: Annual Report, 2016). It has been seen that there was unusual increase in net income as compare to cash flows from the operating activity because most of the sales are done on the basis of credit sales and there was enough balance available in accounts receivables (Horngren et al., 2012). In order to finance the operations company mainly dependent on the current assets and retained earnings left over in previous years. So it can be said that company has not used RD partnerships, SPEs or the sale of receivables to finance the operations. There has been no large assets write offs by the company that has impacted the value of fixed assets (Hussey and Ong, 2017). There are some adjustments related to the tax adjustments in the last fourth quarter of the annual reporting period. Auditor has provided the qualified reports with no changes to the annual report. There many related party transactions and it has been clearly provided under notes to accounts (Wesfarmers: Annual Report, 2016). Compliant with the Conceptual Framework The analysis of Wesfarmers annual report has revealed that it has effectively complied with the conceptual accounting framework principles in development of its financial reports. The normative theory of accounting has argued that financial information should possess the qualitative characteristic of relevancy, reliability and comparability in order to meet the objective of financial reporting. The normative theory of accounting has lead to the development of conceptual accounting framework to provide guidance to the business in developing high-quality financial reports that possess all the qualitative characteristics. However, the accounting policies and estimates used by the company are significantly influenced by the accounting standard-setting environment (Hoffman, 2016). The accounting policies developed by accounting board of various countries are in accordance with the political environment. There is significant different between the accounting policies of the board of various countries due to political context. The country-specific issues such as tax structure may impact the accounting procedures of Wesfarmers while it operates in different foreign countries. For example, Wesfarmers have made voluntary disclosures regarding the policies adopted by it for disclosing the tax structure. The company has voluntarily adopted a tax transparency code to decide over the matters relating to its tax structure (Wesfarmers: Annual Report, 2016). This is done by the company to comply with the conceptual accounting framework principles while operating in different countries. The company is making voluntarily disclosures for achieving its corporate goals and objectives of diversifying its business operations in different geographical units (Mirza, and Ankarath, 2012). Conclusion Thus, it can be said from the overall discussion that accounting policies and strategies plays a significant role in developing quality financial reports. The businesses should adopt the specific accounting policies that are in accordance with conceptual accounting framework principles in order to meet the needs and requirements of end-users. The analysis of accounting policies of Wesfarmers has indicated that the company has maintained high-quality in its financial reports by disclosing all the relevant information as per the conceptual accounting framework principles. The management of the company has also incorporated some discretion while deciding over the matters related to incentive policies and competitive policies. The flexibility in the accounting framework is required by businesses to achieve their strategic goals and objectives. However, the Board of Directors must ensure that the discretion power provided to the management should not distort the financial performance in a ny way. References Albrecht, D. 2010. Economic Consequences and the Political Nature of Accounting Standard Setting. [Online]. Available at: https://profalbrecht.wordpress.com/2010/01/06/economic-consequences-and-the-political-nature-of-accounting-standard-setting/ [Accessed on: 25 September, 2017]. Bamberg, G. and Spremann, K. 2012. Agency Theory, Information, and Incentives. Springer Science Business Media. Bragg, S. 2010. Wiley GAAP: Interpretation and Application of Generally Accepted Accounting Principles 2011. John Wiley Sons. Gray, I. and Manson, S. 2007. The Audit Process: Principles, Practice and Cases. Cengage Learning EMEA. Henderson, S. et al. 2015. Issues in Financial Accounting. Pearson Higher Education AU. Hoffman, C.W. 2016. Revising the Conceptual Framework of the International Standards: IASB Proposals Met with Support and Skepticism. World Journal of Business and Management 2 (1), pp. 1-32. Horngren, C. et al. 2012. Financial Accounting. Pearson Higher Education AU. Hussey, R. and Ong, A. 2017. Corporate Financial Reporting. Springer. Kenny, G. 2009. Diversification Strategy: How to Grow a Business by Diversifying Successfully. Kogan Page Publishers. Knight, J. 2004. Internationalization Remodeled: Definition, Approaches, and Rationales. Journal of Studies in International Education 8 (5), pp. 5-29. Marley, S. and Pedersen, J. 2015. Accounting for Business: An Introduction. ed, 2. Pearson Higher Education AU. Mintz, S. 2013. Accounting for the Public Interest: Perspectives on Accountability, Professionalism and Role in Society. Springer Science Business Media. Mirza, A. and Ankarath, N. 2012. Wiley International Trends in Financial Reporting under IFRS: Including Comparisons with US GAAP, China GAAP, and India Accounting Standards. John Wiley Sons. Mumba, C. 2013. Understanding Accounting and Finance: Theory and Practice. USA: Trafford Publishing. Pietra, R., McLeay, S and Ronen, J. 2013. Accounting and Regulation: New Insights on Governance, Markets and Institutions. Springer Science Business Media. Sheridan, T. 2016. Managerial Fraud: Executive Impression Management, Beyond Red Flags. Routledge. Wesfarmers: Annual Report. 2015. [Online]. Available at: https://www.wesfarmers.com.au/docs/default-source/reports/2015-annual-report.pdf?sfvrsn=4 [Accessed on: 26 September, 2017]. Wesfarmers: Annual Report. 2016. [Online]. Available at: https://www.wesfarmers.com.au/docs/default-source/reports/2016-annual-report.pdf?sfvrsn=4 [Accessed on: 26 September, 2017]. Wolk, H., Dodd, J. and Rozycki. J. 2012. Accounting Theory: Conceptual Issues in a Political and Economic Environment. SAGE. Woolworths: Annual Report. 2016. [Online]. Available at: https://www.woolworthsholdings.co.za/downloads/2016/WHL-Integrated-Report-2016.pdf [Accessed on: 26 September, 2017].