Accounting and financial management - MyAssignmenthelp.com

Question: Discuss about the Accounting and financial management. Answer: Accounting items from annual report of AMP Limited Account receivables from the annual report of the company, it is identified that the account receivable for the year ended 31st December 2016 was amounted to $ 1,975 million as compared to $ 2,067 million for the year ended 31st December 2015. The companys receivable are mainly from two sources, that is from the investments and from the premiums of life insurance contract (Mathuva 2015). The receivables are measured at the fair values through the profit and loss. Further, the re-insurance and the other recoveries discounted to the present value. Any receivable apart from these two sources are measured at the nominal values. Account payable - from the annual report of the company, it is identified that the account payable for the year ended 31st December 2016 was recorded for $ 1,952 million as compared to $ 2,031 million for the year ended 31st December 2015 (Hoskin, Fizzell and Cherry 2014). The payables of the company are accounted for at nominal amount for the payables. With respect to the short term nature for most of the payables, nominal values of the payables are approximately same with the fair value. Importance of accounting items in annual report Account receivable the receivables under the balance sheet represent the amount of money that the customer owe for the services or goods that already provided by the company. However, as the money is expected to be received in future, it is shown as receivables. The receivables form an important part of the current asset of the company that help in measuring the efficiency of the company with regard to payment of its current obligation (Weygandt, Kimmel and Kieso 2015). Further, the accounts receivable represents whether the company is efficient in collecting their dues or not. Further, the receivables assist in forecasting the bad debts of the company Account payable the amount of accounts payable represents the short-term obligations that the business owes to any outside creditors. Payable forms an important part of the current obligation. Therefore, the amount of account receivable assists the investors to understand whether the company is efficient in paying the obligation with the available current asset of the company or not. Further, if the management is not clear regarding how much amount is payable and to whom is payable (Hoskin, Fizzell and Cherry 2014). Moreover, if the payment is missed it may lead to interest charges on payment or late fees on the payment. Therefore, payables are important item under the balance sheet for making various decisions. Social impact of accounting items Accounts receivables the account receivable has various effect with regard to the society. The details of receivables with the names of the debtors assist the company to assess the debtor with regard to the payment features as if the debtor fail to make the payment, the debtor company will have bad reputation in the society as the people will feel that the company is not efficient to pay their dues (Agha 2014). Accounts payable if the company is not efficient in making payment for their dues or if the amounts of payables are very high in the balance sheet of the company, it indicates that the company is not efficient in paying their dues (Kai et al. 2017). Therefore, it will have an adverse effect socially as the people will lose their faith in the company and further, the potential investors will not consider the company for investing their money. Reflection on the annual report of AMP Limited When I was going through the annual report for the year ended 31st December 2016, I found that the annual report of AMP Limited includes the directors report, the remuneration report of the directors, corporate sustainability report and the financial report. Further, the report includes the disclosure notes to the financial statement, directors declaration and the report of independent directors. The financial report of the company includes consolidated statement of income, consolidated comprehensive income statement, and consolidated financial position statement, changes in equity statement and statement of cash flows. The company adopted the significant accounting policies while prepared their financial statements and the details regarding that are disclosed through the disclosure notes. Further, when the accounting policy is related to more than one note or where no note is provided for any particular item, it is clearly mentioned in the report. I further found that the audit of t he financial statement for the year ended 31st December 2016 was carried out by Ernst and Young and as per their opinion, the financial report of AMP Limited represent the true and fair view of the company are complied with the Corporation Regulation Act 2001 and Australian Accounting Standards. Reference Agha, H., 2014. Impact of working capital management on Profitability.European Scientific Journal, ESJ,10(1). Hoskin, R.E., Fizzell, M.R. and Cherry, D.C., 2014.Financial Accounting: a user perspective. Wiley Global Education. Hoskin, R.E., Fizzell, M.R. and Cherry, D.C., 2014.Financial Accounting: a user perspective. Wiley Global Education. Kai, M.A., Rui, M.I.A.O., YANG, W.C., Zhou, P.E.N.G., Bowen, S.U.N. and HU, N.Y., 2017. A management method of accounts receivable based on credit rating for rail equipment manufacturing industry. InProceedings of the 23rd International Conference on Industrial Engineering and Engineering Management 2016(pp. 227-231). Atlantis Press, Paris. Mathuva, D., 2015. The Influence of working capital management components on corporate profitability. Weygandt, J.J., Kimmel, P.D. and Kieso, D.E., 2015.Financial Managerial Accounting. John Wiley Sons.