Reference no: EM132474974 , Length: 2500 Words

BA214 Corporate Accounting Assignment, Bachelor of Business - Melbourne Institute of Technology, Australia

Unit Learning Outcomes -

a. Explain and apply the regulatory framework that applies to the financial accounting for corporations.

b. Account for the financing company operations - issuing of shares, debentures, share options, and the forfeiture and re-issue of shares.

c. Generate financial statements and disclosures as required by the accounting standards.

Assessment Task Description - Star Pty Ltd (SPL) is a large proprietary limited company, a company limited by shares, exploring possibility of listing on the Australian Securities Exchange (ASX) to raise equity capital with a view to expanding existing operations, developing new businesses or acquiring another company. Board of directors of SPL strongly believes that taking on debt requires the company's managers to have a reasonable expectation of steady cash flow to make regular interest repayments, and there is a risk that investors may feel the company ishighly geared. Therefore, the Board does not want to raise capital by issuing debt instruments. Chairman of SPL has called for a detailed report from the Chief Financial Officer in connection with raising capital by issuingshares by a listed company.

Required - Assume you are the Chief Financial Officer (CFO) ofSPL. Write a detailed report to the Chairman by:

1. Examining the various ways in which an ASX listed company may issue and subsequently increase its share capital;

2. Analysing Chapter 7 of listed rules of ASX, issued in respect of share issues; and

3. Reviewing a listed company's annual financial statements and notes to financial statements as to how that particular company has raised and increased its share capital.

Report should incorporate the following:

1. Examine the current arrangements for the regulation of company accounting practices with reference to ASX.

2. Explain the nature of a share distinguishing between an ordinary share and a preference share.

3. What restrictions exist under the Corporation Act 2001 on the conversion of ordinary shares to preference shares?

4. Explain what can happen if a share issue is underwritten or oversubscribed.

5. Explain the procedure involved in share forfeiture in accordance with Corporation Act 2001.

6. Explain the various ways in which a listed company may increase its share capital in keeping with Chapter 7 of listed rules of ASX.

7. Discuss the nature of a right issue, private placement of shares, share option and share buyback.

8. Analyse and report how the selected/allocated ASX listed company raised equity capital and its current position.

This assignment must be written/structured in the form of a 'business report'. That is, it must have a/an;

(a) Executive summary (between 100 to 150 words),

(b) Introduction thatsuccinctly summarizes this assignment's topic and its key issues, controversies, etc. (no more than 200 words), and

(c) Body that addresses all the requirements - see above 1-8(no more 2000 words),

(d) Conclusion that sums up the mains issues of this assignment (no more than 200 words), and

(e) Reference list containing all cited works.

(f) Proper English Grammar, appearance, format, etc.

At least 3 recognized journal article should be cited.