Key Concepts and Questions

As step 2 of the assignment required me to read my company's annual report, I dutifully sat down and was keyed to start and identify my key concepts and questions and then I started reading my company's annual report...

So after a couple of attempts and much hair pulling, I have identified the following key concepts, which I found interesting and areas that seemed important to the company. I have also compiled a short list of questions.

Key Concepts

As I read the report I noticed that there was an emphasis on the growth that the company has achieved. There was a statement at the beginning of the report that they would not report on likely developments due to 'the directors believe it would likely result in unreasonable prejudice to the Group.' My company has not discussed challenges that it is facing but the following news article "Will TPG wipe out BigAir Group with Wireless Broadband" I feel highlights the challenges which it is facing.

My company's current liabilities are exceeding the current assets by $1.05 million. Whilst they have made note of this in the report, they have only briefly touched on the reason for this and a solution. 'Management believe that the Group has adequate resources to continue in operational existence for the foreseeable future. Subsequent to 30 June 2013, the Group plans to enter a 3 year debt facility.'

My company appears to have a large focus on growing the company through acquisitions. This financial year they have acquired 2 companies; Allegro Networks and Link Innovations. Both of these acquisitions were made using the company's operation cash flow allowing them to remain debt free. They have announced that they are in a share share agreement to acquire Intelligent IP Communications Pty Ltd, but due to the current liabilities exceeding current assets at present they are entering a 3 year loan to fund this acquisition.

In my annual report there are 15 pages of summarised accounting policies that the company uses. I found this very helpful in trying to understand what each component was and how they are calculated.

Questions

Q1: What are amortised costs?

Q2: Accounting standards issued but not yet effective and have not been adopted early by the Group. Has anyone else's company advised of changes which will occur in their future reporting and their impact?

Q3: FVTPL stands for 'fair value through profit or loss', what is meant by this?