This narrative is to document the process to record equity in the financial statements. Gibson Energy ULC currently is not a publicly traded corporation and is a wholly owned subsidiary of Gibson Energy Holding ULC who is an indirect wholly owned subsidiary of R/C Guitar Cooperatief U.A., a Dutch co-op owned by investment funds affiliated with Riverstone Holdings LLC. As a result, the risks associated with recording share activity is low due to limited transactions and the process to record Share Capital is covered under the sub-process ‘Journal Entries’ documented in the Corporate Reporting Process Narrative. This narrative is focussed on Contributed Surplus, which currently is an Equity Incentive Plan (Stock based compensation).
Significant Accounts Impacted
Balance Sheet
Statement of Income
Staff Involved in Process
Staff Name Position Location/Business Unit
Brendan Kelly Corporate Controller
Rick Taylor Chief Financial Officer
Stew Hanlon Chief Executive Officer
Dave Irvine VP Human Resources
Robert Tichio Director
Computer Applications and End User Reports Involved in the Process
Application:
AX
Spreadsheets:
Location and name (drive path) Owner
Black Scholes calculation
Description of the Process
Contributed Surplus
Contributed Surplus = Employee Stock Options.
Background
Gibson’s started the incentive plan Q3 2009. Guidelines were set out in an Equity Incentive Plan Document (draft dated May 4, 2009).
o Shares Subject to Plan
o Granting of Options and Stock Appreciation Rights and Sale of Common shares
o Terms of Options and Stock Appreciation Rights
o Exercise of Options and Stock Appreciation Rights
o Restricted Stock Award...
... middle of paper ...
...d by the VP and Corporate Controller. Control
There is a memo outlining the accounting treatment of the stock options that has been sent to the SVP of Finance, copying the CFO, external auditor, and the Tax Manager. This memo summarizes the accounting requirements and disclosure requirements for the Company’s stock option plan adopted in Q3, 2009. It also identifies the model used for valuation of the options and where the parameters are derived from.
Fraud Considerations
Currently there is no market to trade the shares and the fraud risk is low.
Summary of Key Controls
(Control Matrix will be inserted here)
Stock Options granted are properly authorized – Approval by BOD on guidelines, approval of grant, approval of vesting.
Stock Options are properly recorded – Completeness, Measurement, Valuation, (information on activity, and valuation)
The company I have chosen to research for my final paper is Home Depot. Home Depot’s principal assets, debt and stock information as of January 30, 2001 are as follows: (amounts in millions, except stock)
stock is overvalued. A case could be made to hold the stock if it is already
The purpose of this report is to indicate the financial position of British Petroleum as compared to its competitors. British Petroleum is the world’s seven super major valuable oil and Gas Company and is the constituent of FTSE 100. The company operates through 17800 service stations all over the world and produces about 3.2 billion barrels per day. The company conducts in operations in almost 80 countries. By market capitalisation the company is ranked at sixth position and has been ranked as fifth in terms of revenue generation in the oil and gas industry. (British Petroleum , 2006). This report analyses the financial position of British Petroleum by analysing its current performance to its last year performance and by analysing the performance
The two companies that our team selected were Lester and Shang-wa electronics. We will review cash flows for each company and attempt to identify how much cash was generated by operating, investing and financing activities. Then we will identify some significant interval events the effected the company’s cash position and explain both company’s apparent strategies. We will review some objectives from week two and discuss some additional insights and questions that may have arisen. Finally, even though it was not required we will attempt to describe the optimal solution assuming both Lester and Shang-wa can come to an agreement.
The public company, JB Hi-Fi, is a reporting entity which is defined in SAC 1, as those that are expected to have users who depend on the entity’s general purpose financial reports for information that will be useful for making and evaluating decisions about the allocations of scarce resources. SAC 1 provides three main indicators to identify whether JB Hi-Fi Limited is a reporting entity. Firstly, the separation of management
Financial Accounting Standards Board. (1985). Statement of Financial Accounting Standards No. 86. Norwalk. Retrieved April 7, 2014, from http://www.fasb.org/cs/BlobServer?blobkey=id&blobnocache=true&blobwhere=1175820922177&blobheader=application%2Fpdf&blobheadername2=Content-Length&blobheadername1=Content-Disposition&blobheadervalue2=189998&blobheadervalue1=filename%3Dfas86.pdf&blobcol=url
Financial statements are a vital factor of any business organization; they show where a company’s money came from, where it went, and where it is now, according to Securities and Exchange Commission website (2008). In addition, four main financial statements consist of the balance sheet, income statement, cash flow statement, and statement of shareholders’ equity. These four financial statements will be evaluated from Nike Inc. and more in depth information will be included from information on the previous paper which will be link to the working capital strategies. Furthermore, a detail working capital recommendation to senior management will be included and the impact of Nike Inc. revenue increase of their working capital.
It outlines the interconnection of a company’s financial and non-financial elements and aims to combine them and show value creation and maintenance. It identifies resources and their effective and responsible usage. It intends to create a dialogue between the shareholders and other stakeholders and provides them with detailed information.
Private and public accounting has long been discussed and disputed in regards to financial reporting. Since the Financial Accounting Standards Board (FASB) was created in 1973, accountants have called for different accounting regulations for private and public accounting sectors, as private companies do not have the resources to meet the complex requirements of public companies. Private companies currently are not required by law to issue annual or quarterly financial statements (James, 2012). Private companies do, however, have the option to apply the U.S. Generally Accepted Accounting Principles (GAAP), cash basis, or accrual accounting to their financial statements (James, 2012).
The stock option is a stock compensation plan to give key employees the option to purchase company’s common stock at a specified exercise price after a specified vesting period. The exercise price is the market price at the grant date. The vesting period is often the two or four years, and the option can be exercised in 5 or 10 years. The intrinsic value of the option occurs when the market value of company’s stock increase during the time until the option is exercised. Certainly, if the market price decrease in the exercisable period, the employee can choose not to exercise the option and buy the stock.
A consolidated financial statement can be defined as the financial statements of a parent and its subsidiaries combined to form a single economic entity (AASB 10, 2011). The entity, which acquires the other entity, is known as the parent and the entity, which has been acquired, is known as the subsidiary. Consolidation financial reports arise when one entity purchases another entity, to then form a group.
AAF001-6 FINANCIAL ANALYSIS ASSESSMENT 2 INDIVIDUAL REPORT MANAGEMENT ACCOUNTING FOR “ASDA” Written and Submitted by: NAME – Saikat Panja Student ID - 1223846 SUBMISSION DATE: Monday 23RD JANUARY 2015
Debt and equity methods are important decisions when deciding what to do with an instrument like stock options. All three methods, debt, equity, or a combination, are helpful in keeping the books correct and fair until the employee exercises their option. The best method in my mind is the combination of methods. It best shows were the money will go on average before the option is decided on. However the other two methods are also important considering the pros and cons of each decision. No clear answer, however, will ever be known as long as accounting exists.
The capital maintenance concept used results in differences between the relevance and faithful representation of the data that appears in the balance sheet and income statement. The difference between financial capital maintenance and physical is the treatment of unrealized holding gains and losses. Financial capital maintenance does not allow for unrealized holding gains and losses. Only realized gains and losses are included in income because they “are considered a return on capital” (Schroeder et al., 2013). This means, “income is measured only after the investment is recovered” (Gamble, 1981). Physical capital maintenance “consider[s unrealized holding gains and losses] as returns of capital and do[es] not include them income.” (Schroeder et al., 2013). Instead, they are treated as adjustments to equity and included in other comprehensive income. Therefore, with physical capital maintenance “an increase in an entity’s wealth as...
ABC LTD COMPREHENSIVE INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2012 NOTE 2012 Revenue 2 828,500 Cost of sales 3 (460,000) Gross profit 368,500 Other income 4 2,500 Operating expenses 5 361000 Profit before income tax 10000 Income tax expense (30%) 3,000 Profit for the year 7000 Other comprehensive income change in revaulation surplus 38500 Other comprehensive income for the year, net of tax 38500 Total comprehensive income for the year 45500 ABC LTD STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 JUNE 2012 NOTES 2012 ASSETS Current assets Cash and cash equivalents 6 100500 Trade and other receivables 7 45,200 Inventories 8 87700 Other current assets 9 7000