Skip to content

HA2032 Corporate and Financial Accounting on A2m milk and Bellamy limited


Corporate or financial accounting means the type of accounting the company has to follow. It will be different for every country as per the corporate laws of the country. The company have to follow all the rules and regulation while drafting annual reports of the company. The guidelines of the format had been described under the laws and the time of that preparation is also mentioned. If the company fails to prepare the report then they were liable to be punished or with the fine.


The below assignment is completed with the A2m milk and the Bellamy limited. Both the company are the FMCG Company. The annual reports taken for the consideration is of 2017, 20 18 and 2019. The equity and the liability part of the annual report had been studied to find out the source of funding nomad the reason behind the change of the figures from one year to another. Financial ratios are analysed for both of the organisations in this report. This report provides good idea of the annual report terms of both the organisations.

Part A


  • Items recorded under the owners’ equity section 


Bellamy limited Items recorded under the owner’s equity section is 

Issued capital: the capital issued to the public either through IPO or through the after issue, or buyback will be included in this

Reserves: the change in any part of the company other than the operation are included in the reserves, it includes the foreign exchange reserves, revaluation reserves and other.

Retained profits: retained profits will include the part of the profits company had retained for the plans. 

Non controlling interest: it is the part of the equity which is not held by the Bellamy limited and does not have the right to use it (Bellamy limited, 2019). 

A2M milk items under the equity section:

Share capital: the share capital is the number of the shares issued by the company to the pub lice, employees or another member, either by IPO, or buyback will be included.

Retained earnings: this will include the saving of the profits for future management. As per the law, the company has to retained fix % of the profits as restrained earnings

Reserves: reserves will be the fluctuation inactivates under than operating, like hedging instrument (A2M,2019).


  •  Movement in each item recorded under the owner equity section with the reason 


Bellamy Limited Schedule of Equity Share

The company is having a change in the share capital pattern from 2017 to 2019. The company had issued a share in 2016 to the existing shareholders.  As per the annual report of 2019, it was revealed that the company had issued 9,738,250 shares to the investors in 2017 for$ 46,257000. 3,190,042 shares were issued to the subsidiaries company and 708,467shares were under ESOP. At the end of 2019, the company had the 113,368,297 no of shares worth $120, 870000. The shares in 2018 were 113,316,104 worth 120,870 (Bellamy limited, 2019).

On the part of the balance sheet, the issued capital will be the same for all years. Reserves were fluctuated due to the change in foreign exchange and due to the profit and loss for the hedging instruments. The company had not paid any dividend in the current year. 

A2M milk

As per the review of the company balance sheet company not had issued any share capital in the current year to the public. But had given the option of the ESOP to the employees. 

Out of option raised the 3000998 shares were exercised of the value of $1890000 which were 4,231,000 were exercised in 2018 the value of the exercise was 2666000. The company also issue partly paid share worth $1080 in 2019. The cost of the issue was $41 in 2019 while $52 in 2018.

The company had paid a dividend in the current year as well as the last year 

Reserves will include the employee equity-settled payment reserves, fair value reservation reserve and foreign currency translation reserve.



  • Items have been recorded under the liabilities section 


Bellamy limited

Liability section is divided under two heads current liability or noncurrent liability

Current liability will include the change in the liabilities due to the operation of the business, it includes trade and payables, changes in the inventory, income tax liability and other 

While in current liability will include employee benefits of the company

A2M Milk

As the same, it is also divided infer the two heads 

Current liabilities had included the change in trade payables of the operations and other contract liabilities of the customer 

While no current liabilities will include the p [arable other than the operations which are the employee’s entitlements 



  • The movement in each item recorded under liabilities section with reason 


Bellamy limited

The reason for the change is as follows:

Trade and payables: it will include the trade payables, as the suppliers whom the company have to pay for the stock they had purchased

Borrowings: borrowings will include the benefits of the credit card facilities of the company; it will include the secured loan of the company, from the bank. The total secured loan of the company is from either bank the bank facility or the guarantees given. As per the accounting standards, the borrowings are shown at the fair value of the consideration (Bellamy limited, 2019). 

Derivative financial instruments: it will include the transition of the hedging, and they are recorded as the fair value on each subsequent re [porting date. The company recorded the net profit and loss in the instrument under the reserves of the company

Income tax: the income tax will be the liability of the tax of the cure net year which will be paid in the next financial year

Employee benefits: this will be the benefits given to the employs, but the employees not entertain the benefits yet

Provision: the provision will include the minimum annual provision. The reason for the change in minimum value.

Employee benefits: employee benefits will include the contingent liabilities of the employees for which the company had made provision. 

A2M milk

The A2m milk had included the following liability

Trade payables: it will include the party to whom the company have to pay for the supplies. 

Accruals: it had the liabilities company have to pay in the current year but nit paid in the current year, and dwell bow due in the current year.

Employee benefits: it will include the benefits given to the employees and not yet received. It will be recognised on the fair value and change of is the reason is in the fear value and number of the option.

Explain the relative advantages or disadvantages of each source of the fund each of your selected companies is using 

Both the company had the capital raised from either from the issue of the capital or through the bank or financial institutions

The advantage is as   follows:

Share Capital: the coma pony does not pay any fixed rate of the interest in the share capital, hence it will be beneficial to the company, but the company have to pay a dividend at the end of the year which involves the part of the profits. 

Employee stock option: this option is given to the employees to make them retain in the company, in this option the employees can exercise the issue on the issue price on the date of /option given. They can also vest their right if they want

Bank: it is the most secure type of funding. The bank will take a fixed rate of interest but they have fixed maturity periods.

Part b

Concept of small proprietary companies, large proprietary companies and reporting entity.

Proprietary companies are those that are registered under section118, 60180,1362B. if any nature of the companies isis registered under these above mentioned is known as proprietary companies. The proprietary companies are limited by shares, not more than 50 shareholders, and no disclosure is done by a proprietary company in front of the public. These are some condition to become a proprietary company (Hiller, 2013).

Small proprietary companies

Small proprietary companies are the companies that follow all the above-mentioned condition and some additional condition that is 

The small proprietary companies are considered small if they earn gross revenue not more or less $10 million in a financial year. 

The small proprietary companies are to be under small proprietary if the companies assets turnover is less than $5 million in a financial year.

The small proprietary should consist of not more than 50 non-employees shareholders at the end of the year or financial year.

Hence, if any company is fulfilling a minimum 2 of the following condition they are considered as the small proprietary company as per section 113 (May 2013).

Large proprietary companies 

Large proprietary companies are the companies that are fulfilling above mentioned objective that is mentioned in proprietorship clauses  and some additional condition also applied to accept the companies as a large proprietary company the condition are 

The large proprietary companies are to considered to be large if they earn gross revenue of $10million or more than $10million in the financial year.

The large proprietary companies are considered to be large proprietary under section 113 if their assets turnover is $ 5 million or more than that in the financial year (May 2013).

The large proprietary company should consist of 50 employees or more than that margin in the financial year.

Hence if all the condition is fulfilled by any proprietary companies the company is considered under a large proprietary company and above clauses should be followed by the company every financial year.

Reporting entity companies

Reporting entity companies are the companies that are dependent on the general purpose financial report to develop the understanding of the financial position and performance of the company or the firm or the business entity, the reporting entity also use the understanding to make necessary decision making for the financial aspect of the company. The general users f this portal is the shareholders, members, employees, and potential investors . under this condition all the Australian standard  are to be implemented and proposed while understanding the financial report and all the condition that are mentioned in the Australian standards report and conclude the report after covering all the relevant clauses that are related to the particular financial report that is share price , taxation report and another public outcomes that is to followed by the company while building any decision making and framing policies (Kang and Gray, 2013).

The implication of the terms, compliance and reporting requirement in all the above mentioned three types of companies 

Small proprietary company

Institutional framework

As per the institutional framework, the small proprietary companies should register themselves under the head proprietorship clauses. The small entity company should not have the rights to disclose any report or share under public report broadcasting and they have to follow all the riles that the framework amends to follows, if any violation occurs in future the laws suggest he punishment as well.The rule violation will cause the closedown of the company, some fine amount should be discharge and the required certificate that is commencement certificate should be incorporated under the proprietorship act. These are all some framework that is suggested by the government of the country (Miglani,, 2015.

Accounting standard  

Small entity companies should follow the AASB-series standards that are to allotted by the Australian standard of the country for performing any financial transaction and preparing a financial report. The AASB-series includes the health discussion if in any case required, the small entity companies should also consult the public for processing. The head that comes under AASB- series are Australian securities and commission act 1989 of corporation law (Miglani,, 2015).

Auditing standard

The auditing standard that is followed under the corporation laws is the auditing and assurance standards board. This standard helps the proprietor to develop some professional code and conduct for professionalism framework and maintaining standards in the company and provide assistance to carry financial report ethically and professionally. Hence the auditing body also prescribed the violation condition, so that the person think before doing any evil act.

Large proprietary companies 

Accounting standards and auditing standard

The large entity should maintain the gross revenue as mentioned under the proprietary clauses or section. The accounting standard suggests some norms as mentioned under the corporation laws the laws 3expalined that the proprietary business does not consider as the public company. So that they have no right to disclose their investors and shares of the company they take help of the public consultation process for better functioning and report preparation. The Australian accounting standard provides certain guidelines that are to be followed by the large entity companies, otherwise, they will suffer complication in the working and the development of accounting standards raise the standard of the financial senses too and helps the company professional to implement those standards to sustain the quality and working in the organization. 

The auditing and assurance standard helps the large proprietary companies to develop ethical processing in the company to carry out financial norms with high standards in auditing policies. The auditing policies also levied rules and restriction for effective functioning (Rahman, 2013)

Reporting entity companies 

Accounting standard and auditing standard

Reporting entity company should also follows the relevant standard to maintain the ethical environment in the organization and to prevent company from heavy losses the reporting entity company prefer the GPFR portal or a assistance that helps them to develop understanding of the financial nature and behaviour that needs to maintained the effective financial position and to take relevant and accurate decision making after studying the GPFR reports and prepare the company report as per the study done in the GPFR portal and make changes and implementation accordingly (Gay and Simnett,, 2012).


The study of all the above mentioned  clauses reveals that every company whether it is A2M milk companies and Bellamy limited of Australia  should follow all the rules and regulation that is amended by the Australian standards under the accounting heads for carry out their financial position and reporting effectively because if they do not implement all the clauses  they do not know the nature of their business. For maintaining quality standards and to distribute equal shares to discharge financial responsibility and to implement high standard and ethical working the company needs to follow the guidelines that are amended by the Australian government to carry out financial planning and functioning effectively. Hence for gathering effective and professional financial essence whether it is in the small, large or reporting entity, the company needs to follow the standards for basic formalities, financial years terms and condition, and to maintain consistency in the business.  


A2M, 2019, Annual report of A2M milk[online] A2M available at:[access on 29 September 2019] 

Bellamy limited, 2019, About investors and share of the company[online] Bellamy, limited available at:[access on 29 September 2019]

Bellamy limited, 2019, Annual report [online] Bellamy limited, available at[access on 29 September 2019]

Gay, G. and Simnett, R., 2012. Auditing and assurance services in Australia. McGraw-Hill Education Australia.

Hiller, J.S., 2013. The benefit corporation and corporate social responsibility. Journal of Business Ethics, 118(2), pp.287-301.

Kang, H. and Gray, S.J., 2013. Segment reporting practices in Australia: Has IFRS 8 made a difference?. Australian Accounting Review, 23(3), pp.232-243.

May, G.O., 2013. Financial accounting. Read Books Ltd.

Miglani, S., Ahmed, K. and Henry, D., 2015. Voluntary corporate governance structure and financial distress: Evidence from Australia. Journal of Contemporary Accounting & Economics, 11(1), pp.18-30.

Rahman, A.R., 2013. The Australian Accounting Standards Review Board (RLE Accounting): The Establishment of its Participative Review Process. Routledge.