Comparison Of Two Business Types: Woolworth Essay

Question:

Discuss about the Comparison of Two Business Types for Woolworth.

Answer:

Introduction

The report intends to present the comparison of two different types of the business based on the annual report. The two sectors have been chosen based on Retail Business and Manufacturing business headquartered in Australia. The choice of the retail company has been made with Woolworth Limited and the manufacturing sector has been identified with Boral Limited. The various comparison elements hsas been considered with the nature of the business, transaction records, preparation of financial reports, financial reports formats and extend of disclosure. The second section of the report has been seen to be related to the various types of comparison based on the various types of the disclosures which has been stated based on the accounting standards.

Retail Business

The various parameters of the retail business have been identified with Woolworths Limited.

Nature of Business

Woolworths Limited has been identified as a major Australian retail company and second largest in terms of the revenue after Wesfarmers Ltd. The main divisions of the company have been identified in terms of Supermarkets, Home Improvement products, liquor and discount stores (Woolworthsgroup.com.au. 2017).

Transaction Records

The main nature of the transactions has been seen to be based on the revenue from the sale of goods, operating profit, carrying amount of the goods and disposals of the goods. The main forms of the transactions are seen to be associated to the selling of the retail products.

Preparation of Financial Reports

The preparation of the financial report has been seen to be based on AASB 101 presentation of the financial statements. The various types of the other considerations of the financial report have been seen in terms of AASB 107 statement of cash flows. The financial instruments are further seen to be amended based on AASB 9 financial instruments. Woolworth’s Limited has been further identified to recognize the new accounting standards based on AASB 15 revenue from contracts with customers (Wow2016ar.qreports.com.au. 2017).

Financial Report Format

The financial reports are prepared based on discussions for significant accounting policies, critical accounting estimates and judgements, individually significant items from continuing operations, segment disclosure from the continuing operations. The fifth section of the report accounts for the revenue and expenses from continuing operations, financing costs from continuing operations, trade and other receivables, inventories, and other financial assets. The financial report has further included property, plant, equipment, intangible assets, impairment of non-financial assets.

Extend of Disclosure

The various types of the disclosures are seen to be based on the Group’s reassessment from note 25 of AASB 9 financial instruments. Some of the other extents of the disclosures are further seen to be AASB 2015-2. Woolworth Limited is seen to comply with the disclosure based on the AASB 101. Some of the other disclosures are seen to comply with “AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107” (Wow2016ar.qreports.com.au. 2017).

Manufacturing Business

The various parameters of the retail business have been identified with Boral Limited.

Nature of Business

Boral Limited has been seen to be completing 70 since its incorporation as ‘Bitumen and Oil Refineries’. The company has been seen to grow and evolve across several industries ranging from building products, construction materials, gas supply and oil refining. The main manufacturing operations of the company are seen to be carried out across Australia. Boral Limited has been observed to mainly comprise of the spin-off assets, comprising building and construction materials. The business of Boral has been also spread across United States and Asia (Boral.com.au. 2017).

Transaction Records

The main aspect of the reporting has been identified with construction materials & cement, building products, and manufacturing operations in USA. The company’s transaction records has been able to identify thee total revenue, operating profit and segmental assets. The external revenues of the company have been further identified with Australia, Asia and USA. The various types of the transactions of Boral Limited have been further identified in terms of the net profit on sale of assets, net foreign exchange gain and other income.

Preparation of Financial Reports

The main aspects of the preparation of the financial reports are seen to be based on AASB and Corporations Act 2001. It has been further recognized that the consolidation of the financial reports are seen to comply with the standards which are adopted by IFRS and IASB. Boral Limited has been further identified to make the new amendments based on AASB related to the changes in the accounting policies. The new accounting standards based on AASB 3 financial statements. Some other considerations of the financial statements have been further seen to be based on AASB 15 revenue from contracts with customers and AASB 16 leases (Annualreports.com. 2017).

Financial Report Format

The format financial report has been seen to be based on business is based on the several sections. The significant order of the various sections has been seen in terms of the business performance, operating assets, liabilities, capital and financial structure. The financial report sections have further included taxation, group structure, employee benefits and various types of other notes. The latter part of the report has included the disclosures associated to statutory statements.

Extend of Disclosure

The disclosure of the company has been made in sustainability report with carbon disclosure project. The company has clearly mentioned about lifecycle analysis and environmental product disclosures. Some of the other disclosure made by the company has been identified in terms of integrity and quality of Boral’s financial statements. The continuous disclosure made by the company has been further considered based on the disclosure laws and the ASX listing rule requirements as per the continuous disclosure policy adopted by the board.

Comparison of Retail Business with Manufacturing Report

Nature of Business

Based on the several consideration made in the report the comparison of the nature of the business has been clearly seen to be based manufacturing and retail operations. The main difference in the nature of the business has been further seen to be associated to the continuous endeavour for focusing on increased production and in case of manufacturing business and in case of retail the nature of the business is focus on increasing the sales of company.

Transaction Records

The transaction recording has been seen to be the main difference among both the business types. In case of the retail business the transactions are mainly related to revenue from the sale of goods, operating profit, carrying amount of the goods and disposals of the goods. While in case of the manufacturing business the transactions are seen to be mainly recorded based on construction materials & cement, building products, and manufacturing operations in USA (Annualreports.com. 2017).

Preparation of Financial Reports

The most notable difference in this aspect has been based on the consideration of only AASB standards in case of Woolworths Limited whereas Boral limited maintains their financial reports based on both AASB and Corporations Act 2001. It has been further recognized that the consolidation of the financial reports are seen to comply with the standards which are adopted by IFRS and IASB while this was not seen to be the case for Woolworths limited.

Financial Report Format

The main difference of the financial report has been based on including segment disclosure from the continuing operations. The some section of the report accounts for the revenue and expenses from continuing operations, financing costs from continuing operations, trade and other receivables, inventories, and other financial assets. In case of Boral inventories has been not been taken into account. The main financial components have been further seen to be based on the employee benefits and various types of other notes (Annualreports.com. 2017).

Extend of Disclosure

The disclosure of Woolworths Limited has been seen to be based on the Group’s reassessment from note 25 of AASB 9 financial instruments. Some of the other extents of the disclosures are further seen to be AASB 2015-2. Woolworth Limited is seen to comply with the disclosure based on the AASB 101. On the other hand the disclosures of Boral Limited are seen to be based on the sustainability report with carbon disclosure project. The company has clearly mentioned about lifecycle analysis and environmental product disclosures. Some of the other disclosure made by the company has been identified in terms of integrity and quality of Boral’s financial statements (Annualreports.com. 2017).

Conclusion

The various types of the differences in the disclosure of the companies are seen to be based on the nature of business, financial transactions, reporting format and the disclosure made in the financial reports. It has been further assessed that the main difference are due to the differences in the following of the accounting standards. Hence it can be further seen that the different types of the considerations made in the report has been further made as per the segment disclosure from the continuing operations, while in case of the construction business the main considerations are seen to be based on the employee benefits and various types of other notes.

Reference List

Annualreports.com. (2017). [online] Available at: [Accessed 24 May 2017].

Boral.com.au. (2017). Boral History. [online] Available at: [Accessed 24 May 2017].

Woolworthsgroup.com.au. (2017). About Us - Woolworths Group. [online] Available at: [Accessed 24 May 2017].

Wow2016ar.qreports.com.au. (2017). [online] Available at: [Accessed 24 May 2017].

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