Financial Accounting and Reporting Controlled Entities Firm

Question: Describe about the Financial Accounting and Reporting for Controlled Entities Firm. Answer: 1: In Australia, Westpac is considered as one of the overall four chief banking firms, having controlled entities, branches and subsidiaries across the country, the U.S., Asia, Pacific Region and New Zealand (Westpac Annual Report 2015). In the annual report of the firm for the year 2015, information regarding joint ventures, subsidiaries, investments and associates are found under the section subsidiaries. Supplementary The particular firm is composed 5 key subsidiaries St. George Banking Group, Westpac Retail and Business Banking (WRBB), Westpac New Zealand, Westpac Institutional Bank (WIB) and BT Financial Group (BTFG) (Westpac Annual Report 2015). It has been found that the WRBB mainly deals with consumer service and transactional banking to the SMEs (Small Medium Enterprises), trade finance, property finance management and commercial banking (Westpac Annual Report 2015). St. George Banking Group that involves Bank SA, St. George, RAMS brands and Bank of Melbourne, is liable for commercial and retail banking, online deposits, monetary services that specializes in mortgages, apparatus funding and automotive investment (Westpac Annual Report 2015). The organizations which are considered as the elements of BTFG brands include BT Select, Asgard, Securitor, Advance Asset Management, Ascalon, the Advice and Licensee Select. It has been found that BTFG primarily highlights on the allocation and improvement of investments, retreat goods, life insurance, superannuation, lenders and general mortgage insurance to its customers (Westpac Annual Report 2015). On the other hand, WIB offers monetary services to companies, government and organizational consumers along with relations to New Zealand and Australia. It also involves subsidiaries and branches that are situated in the U.K., Asia and the U.S. (Westpac Annual Report 2015). Westpac New Zealand offers insurance and wealth goods to marketable, banking services, institutional and business consumers in New Zealand (Westpac Annual Report 2015). The other separations that Westpac Group has include Westpac Pacific that is regulating in 3 Island Nations of Pacific (Westpac Annual Report 2015). Associates, Chief Investments and Joint Ventures Westpac Group does not have capability to control other units, however, it has important impact on fiscal and operating strategies of those units and these known as associates for the particular group (Westpac Annual Report 2015). The method of equity is utilized for investment recognition in associates. BTIM accounts for about 60.8% of issued stocks and it became the groups associate when it loses its control on 23rd June in the year 2015. During this period, the funding is equity accounted as the group holds only 31.0% of the total stocks. The firm had also been in a joint venture with the ATM alliance (global). In the year 2015, Westpac acquired Lloyds Bank of Australia, this is considered as one of the key investments in the year (Westpac Annual Report 2015). 2: According to AASB 10, the consolidated fiscal declaration is a set of monetary statement for Westpac Group that is under power of one of the units. This highlights the monetary situation and presentation of the firm as a single unit. According to the 4(a) paragraph of AASB 10, the parent unit needs to construct the consolidated fiscal declarations, which consolidate funding in subsidiaries as per the customary (Leo et al. 2015). There are several causes due to which the parent unit requires to construct fiscal declarations especially when the subsidiary acts as a distinct legal unit. The information gathered from fiscal declaration is considered as accurate to the investors i.e. who are concerned about the monetary declarations of the group and not just the single units prior to make any decisions regarding investment. The access to the fiscal declarations has made it simpler for the investors to done proportional investigation between units. This statement also guides to evade the double entry in subsidiary and parent accounts during intra-group transactions. The assets are reported under group management along with claims on these. It has been found that some advantages and risks are related with the management of a unit. Thus, it can be said that preparation of fiscal declarations helps to assess both the advantages and risks (Leo et al. 2015). As per AASB 127, disclosure is needed during presentation of consolidated fiscal declarations for controlled units. On the other hand, AASB 12 highlights on interest disclosure of other units. The aim behind this is to provide opportunity to the investors to evaluate the particular risks that are related to interests of other units. The other objective is to scrutinize the impacts on cash flows of the firm, monetary situation and fiscal presentation (Leo et al. 2015). In post global financial crisis, several firms became conscious regarding lack of transparency during the presentation of fiscal declaration. It has been found that various firms failed to operate due to lack of financial confession. Thus, many investors end up with investing in companies that generated loss. Therefore, as per AASB 12, a unit should expose its financial conditions along with important assumptions and judgments that helps to identify the interests nature in other unit (as per 2(a) paragraph) and as per 7th paragraph, in the specified subsidiaries (Leo et al. 2015).