This is my favourite blog because Danii is super organised and I love the way she presents her assessment steps. It is easy to follow and I used it as a guide for my own assessments format as I was a bit overwhelmed. She does not write too much that is becomes boring and everything she writes is relevant and engaging. Melbourne IT sounds like an interesting company to be studying and I am looking forward to following Danii’s journey. I am sure I will revisit Danii’s blog throughout this unit to use it as a guide for my own.
It is clear Amanda has done significant research about her company. Her blog is also one that is the furthest along in the assessments that I have looked at. Her blog flows on from section to section and is easy to read/relate to. I can clearly identify which step she is addressing under each heading. Amanda has found heaps of articles and videos about her company (which makes me a little worried I have not done enough research). I couldn’t find an about me section (which could be a result of my lack of IT skills), so if this is not present on her blog it would be a great addition.
My favourite feature of Tahleetha’s blog is the menu bar across the top which makes it easy to navigate to her step 3 and step 5. Tahleetha uses in text links which I think is fantastic – this is not something I have learned to do yet myself but now I will be looking into how to do it. I noticed that Tahleetha seemed to use the income statement and the balance sheet as key concepts to work on. I have also done this in my step 3 and I was not sure if I was on the right track so it was great to read that Tahleetha has also done this. I learned from Tahleetha’s blog about the order of liquidity which means that whichever assets can be liquidated the quickest is listed first on the balance sheet. Clearly, from reading Tahleetha’s blog we all have something we can learn from eachother.
Annual report: Click the below links to access Power Assets annual reports: 2015 2016 2017 2018
KCQ’s: Following the contents page is a table of “performance highlights”. This table contains the earnings per share and earnings per dividend. The earnings per share is down 8% from 2018 to 2019 and there has been no change in the dividends per share. I must be interpreting this wrong – Why would these to items be considered performance highlights when they show no increase at all? However, following on from these figures is some impressive numbers which emphasis the magnitude of this company – 18+ million customers, 111,500km of gas/oil pipeline and 397,800km of power network. I am also surprised to find that largest portion of the company’s profit contribution by reportable business segment is in the United Kingdom at 53% followed by Australia at 19%. This makes me wonder why I have not heard of this company before. When I initially started to look into my company I recall reading that this company invests in a utility provider in South Australia so could that possibly be why? Further, from what I have been reading my understanding so far is that Power Assets invest in other utility providers so possibly it is not the name “Power Assets” that I would be familiar with but the name of the provider they invest in.
Power Assets lists “Maintain a strong balance sheet as a foundation for agility” as one of their long term development strategies. I look forward to looking at their balance sheet to see if I can make up my own mind about how strong it is.
At this point I also reflect on what Martin said about a company’s annual reports being a tool for which a company markets and I wonder if I am being “fooled” or “deceived” by this report I am reading. It is beautiful presented and I imagine the company employs people with particular skills in design to direct the readers eye to favorable information and glance over unfavorable information. I have a feeling that I need to “stay sharp” while reading this report.
In the chairman’s statement, I gain more understanding of the decrease in profits between 2017 and 2018, and I am relieved to know it does mean what I thought and that I am not just way to far out of depth for this course. The decrease has been attributed to a “one of gain on disposal of properties” in 2017. Would this mean the company has also had a massive decrease in capital in 2017? I will be interest to see which financial report this may be visible in.
I have recently learned that the establishment and operating of a board of directors is an effective way to reduce and eliminate agency costs. This concept is brought to my attention by the introduction of the Board of Directors in the booklet. I am also studying Business Finance this semester and realised I actually learned about this in that unit not this unit. I am also studying Principals of Economics and am finding it surprising how much these three units interconnect. I am not sure if this is something Martin would like me to discuss as it is about another unit, but then consider that one of the most important outcomes of this unit is that I learn how to learn, so even if I am learning about another unit I am sure he will be happy. Agency costs are those cost incurred because there is a conflict of interest between the agent and the principal (company managers and the shareholders). These costs can be things such as lavish dinners or company jets. Therefore having a board of directors who represent the shareholder can ensure that the shareholders interests are the main priority of the company. So while I am reading the profiles I am thinking I would be happy with this board of directors as they all appear responsible and educated.
I read about which financial statements are included in the report. I am anxious as I understand that their statements can be called all different names. I relate this to the industry I work in. I work at Ray White Singleton. In Ray White franchises we call the Receptionist, the Receptionist. We call the Property Manager, the Property Manager – it is pretty straight forward. However, at a competitors agency I have seen the Receptionist named the director of First Impressions and the Property Manager named the Asset Portfolio Manager. I always wonder why they do this, I would imagine it only makes it harder to find the person you are trying to talk to. Likewise with these statement, do different companies name them different things just to make the harder to find (maybe if they contain unfavorable information) or do they name them differently to make them sound fancier or more professional?
Either way it seems like it just creates more work for the persons reading the report to find what they are looking for – just like the fancy names for real estate job positions. I am glad to read that the statements included in my report are the consolidated statement of financial position (balance sheet), the consolidated statement of comprehensive income (income statement – I hope!), the consolidated statement of changes in equity (statement of changes in equity – easy to identify), the consolidated cash flow statement (statement of cashflow – easy to identify). I am relived that I can find each of the four statements pretty easily.
When I look at the profit and loss statement the first thing I take note of is the “as at” date which is the 31 December 2018. When I read through the profit and loss stament I need to use my calculator to follow the math and understand how they are arriving at the operating profit figure. I note this is calculated by adding the revenue and “other net income” together and subtracting the “direct costs” and “other operating costs”. Comparing the 2018 figures to the 2017 figures I notice the biggest difference is in the “Other net income”, this must be the category under which the “one of gain on disposal of properties” in 2017 is accounted for. I go to the footnotes to check it out and find that this category includes “Gain on disposal of property, plant and equipment and lease hold land”. In 2017 $922 million was recorded and in 2018 $0 was recorded. That is a huge difference and the profit and loss statement act as evidence to the chairman’s statement that other than the disposal of this mentioned property 2018 was a better year in terms of revenue
I understand that the income statement displays how the activities of the company effect the share price of the company. When I look at the income statement I am stumped at first. However I thought these “activities” would be more clear or easy to understand. I was expecting things such as installing 10,000km of powerlines across South Australia and the a figure of how much additional profit (still not sure if that is the correct term to use) this investment lead to. But instead I was faced with terms such as cost of hedging which I need to research further. My understanding is that the main outcome of the income statement is the bottom line. In my experience the bottom line is the evaluation you are left with after you weigh up all the option/pros and cons, the bottom line is the key pearl of wisdom on which you can make a decision. In my workplace we talk about the bottom line as our profits less our overheads. I wonder if the bottom line Martin talk about is the same or different. The bottom line of Power Assets income statement is labelled “Total comprehensive income for the year attributable to equity shareholders of the company”. I try to simplify this for myself to make it easier to understand – Income for shareholders. Does this mean the dividends paid to shareholders? Well the figure for 2018 is far less than the figure for 2017, $6,523 million and $9,801 million respectively.
Next I look at the Balance Sheet for Power Assets and note and as at date, also the 31 December 2018. From Martin’s teachings I have formed the idea in my mind that the balance sheet is a “screenshot” of the company’s assets, liabilities and equity because it is an insight on ONE day of the year. Similar to how if you screenshot anything on your phone it only shows you what you were looking at on that day. I notice the biggest assets are “interest in joint ventures” and “interest in associates” I think this must refer to the percentage of other companies which Power Assets holds. There is a huge difference in the “Bank deposits and cash” between 2017 and 2018, $5,229 million and $25,407 million. Why would they have so much less cash in 2018? Have they invested $20,000 million cash? I read in the achievements at the beginning of the document that they “acquired” an Australian utility company this year and that 100% of their debt was in AUD currency. Could they have spent all that money on this new company?
The changes in equity statement looks very daunting. I read through it and almost every item looks foreign to me. The only thing I can seem to identify is that the total matches the total on the balance sheet so there must be some relationship here I need to figure out.
By the time I get to the cash flow statement all the statements are starting to look the same and mush together and I think this statement looks like the balance sheet. Upon further inspection I remember what I thought when I read Martin’s explanation of the cashflow statement. I imagined it to be similar to a bank statement because it states and opening balance, transactions throughout the period and then a closing balance. Both the opening and closing balances are listed at the bottom of the page, maybe for easy comparison. I think this is one of the easier statements to understand.
My understanding of the footnotes is that they are designed to support the financial reports and allow the financial reports to stay concise. However, I wonder to myself who would actually have the time to read to booklet cover to cover? Clearly it is only meant for skimming and finding the needed information.
One of the challenges I identified that Power Assets continually faces year after year is the ever-increasing expectations of stakeholders. Stakeholders expect Power Assets to be more transparent each year and provide evidence that Power Assets are addressing their concerns including environmental sustainability, customer service and health and safety. Power Assets aim to provide stakeholders with open lines of communication to keep them engaged and eliminate this challenge.
I was very anxious about reading Power Assets financial reports. It seemed like a huge task considering the booklet is 163 pages long. It reminds me of reading an insurance PDS – no one ever actually reads it. I was even more nervous about formulating my own ideas and questions surrounding these statement, however once I started my fingers typed at full speed for hours.
My assigned firm is Power Assets. Who is Power Assets and what do they do? Hopefully I am about to answer those questions.
As you may have guessed from the name Power Assets are a utility company. On their website Power Assets describe themselves as “a global investor in energy and utility-related businesses with investments in electricity generation, transmission and distribution; renewable energy; energy from waste; gas distribution and oil transmission”.
This global company exist in a wide range of international utility markets including Australia, Hong Kong, Canada, Thailand, China and the US.
Power Assets are a Hong Kong company and are listed on the Stock Exchange of Hong Kong.
In Australia alone, Power Assets have over 800,000 customers. To find out more, please watch the following video.
Hi, Please see below a draft copy of my Assignment 1 Steps 1 & 2. I am hoping I am on the right track with this and any feedback, advice or direction will be greatly appreciated. Thank you,
Step 1: Introduction and Chapter 1 KCQs
The first thing I always do when I open a study guide or other reading material is scroll all the way to the bottom of the document and see how many pages total there is -“Wow, this is a lot just for an introduction” I thought to myself. I always check the number of pages so I can estimate how much time I need to allocate reading. I work full time and often try to squeeze reading into my lunch break. I started my degree (Bachelor of Property) last semester and was now wondering if my first three units were “beginner” units compared to what I face this semester.
The first thing I read was the two quotes. I was initially confused when I saw quotes, not something I would expect in an accounting Study Guide. I automatically assumed it would be mostly quantitative information. The quotes did however spark my interest immediately. I love hearing other people’s words of wisdom because I think we can all gain something from others experiences.
In the first few paragraphs I connected with a few statements including that some student are only doing this unit because it is a compulsory unit in their degree. I am studying this degree because I currently work in Real Estate and wish to become a Licensed Valuer in the future. I currently assist a Licensed Valuer at our agency and follow the process from start to finish. I struggle to see where Accounting is included in that process. However I hope that this unit will help me with personal matters such as tax returns.
When I read that I will be assigned a listed company, I wonder what “listed” means? I know the saying “No questions is a dumb question” but I wonder if this is a dumb question and if that is something I should know. I’m guessing it means listed on the stock market, well I am hoping that is what it means.
Next I read the section about PeerWise and instantly did not like the concept. This is probably because I feel anxious about what others think of my questions. Will my questions not be as articulated as others questions? Will my questions be anonymous? What if no one answers or rates my questions because they are poor? I am likely to “fall down the rabbit hole” because I have an addictive personality?
I feel even worse when I read the section about Interaction with Others and Interact or Perish. I found it hard last term to build rapport with other students while studying online. Instead of having classroom chit chat like usual, the conversations only ever discussed work which meant it felt like we were only conversing for our own gain. I prefer the lone ranger approach.
I really appreciate the comments that say each section of the study guide takes 40 minutes each to read because as mentioned above I also work full time and find it useful to allocate specific time frames to tasks in my weekly planner to be able to fit them in amongst other jobs. 10,000 words per week seems like a lot of reading, however, I much prefer to read material written by the teacher rather than straight from the text book. I find the content is more relevant to what we are learning this way.
When I read the line that says “We find within days, minutes or even seconds after completing an exam and demonstrating so much ‘knowledge’ of the subject area, that we can no longer even remember it.” I think to myself that I have experienced that many times. I can remember coming out of HSC exams and other students discussing answers and their solutions and I all of a sudden can not remember anything. Clearly, I was not learning effectively. However, I had not considered there is other ways of learning, but when I do consider it, it is exciting. Number 6 way to learn stands out the most for me. While I would have answered with one of the first 3 ways when asked the question “What do you think learning is?” I think that number 6 is the most powerful and most true. I try to think about something I learned last semester and if anything I learned has changed me. In all honest, I struggle to think of anything! Could this be because I was only absorbing the information to regurgitate it? Did I not truly learn anything last semester? Maybe that is underlying lesson to be learned in this unit?
While reading Communicating Effectively Online I am new to the concept of “nettique”. I did not realise there are some basic rules for online communication – I wonder how many times I have broken these rules. I also wonder if this is an “old person idea” meaning this is something say baby boomers would adhere to, not millennials like myself. I am worried about the blog, the most web page design experience I have is Myspace back in 2008.
Next, I open the Chapter 1 Study Guide, already knowing this is approximately 10,000 words and 15 pages. I would usually feel pained about beginning this much reading, however I am looking forward to being introduced to more new concepts. As I read the first paragraph I am thinking to myself “I have used MYOB and Xero before, hopefully it is as simple as that” but I know it is not going to be. I think “accounting” must go beyond, well, accounts.
I notice there is a huge emphasis on reality and realities. This must be important, but I am not sure why yet. The Study Guide continually mentions economic and business realities – I wish there was an example of this. I try to think about a business reality at my workplace. Could a business reality be the number of homes we sell per annum? That would be quantitative data though and I think a reality would be qualitative. Maybe a better example would be customer satisfaction?
When I read about what business is, I am surprised. The Study Guide talks about business in a thoughtful and kind way, saying value is about things that matter to us and what we care about. I would have expected the Study Guide to say business is about making money and money is what matters in business.
The next section that provokes thought in me is the businesses are everywhere section. Why is Martin mentioning so many business? Is there a hidden message in here or does he just want to emphasis this concept? Are we expected to just skim through this list or read every business? I only skimmed as I got tired of reading it.
“All these businesses which I saw on my short walk around Yeppoon would keep accounts” – What does this mean? What does accounts mean? Does this mean bank accounts? Or does this mean customer accounts, like when you can have a 30 day account with a supplier? I can not think of any other type of account it might mean. I am worried I do not understand the absolute basics of this unit already.
As I continue to read on I wonder what my boss, Ross, knows about our business, Ray White Singleton based on the insights provided from our accountants. When he goes to the accountant does she tell him “you should be doing this, or stop doing this because the magical accounts have told me so”? If the accountant is advising Ross on his business practices, he certainly is not bringing that advice back into the office. Well at least not as far as I can see, but maybe I can not see it because I do not understand it.
When it mentions that accounting can hinder business I wrestle with this statement. Wouldn’t it be better to know what is going on that not know? If you don’t know, aren’t you just burying your head in the sand? I try to think of a situation where it could hinder our business. The only time I could think of is when we make mistakes such as receipting funds to the general account instead of the trust account.
I really enjoy reading about the QWERTY keyboard and typewriter. When I read this section I instantly wanted to tell someone this new information, I love sharing facts like these. And it does make me wonder why we don’t have two types of keyboards. Teach children to type on the new versions and older generations can continue to use the QWERTY keyboard if too stubborn to relearn. This also made me think I really need to learn to touch type. I have tried in the past and given up, it would be a great skill to acquire. I wonder if it would only take me 8 hours? Or would it take me longer because I already know how to type and would have to re wire my fingers and brain.
My next thought is about the “books”. My mum is a self employed cleaner and has a few jobs that are “not on the books”. My understanding of this statement is that these jobs are cash in hand and are not declared as taxable income. It does seem strange however that they are referred to as not on the books when there is not any books anymore anyway. I suppose it is just more of a saying now that a reality.
When reading about equity I find it easiest to compare this to my home loan. I think of equity as the difference between what our home is worth and what our mortgage is. I think I understand equity. Next the concepts of assets, liability, revenue and expenses are introduced. I think of this in terms of an investment property – the asset would be the home, the liability would be the mortgage, the equity would be the difference between the mortgage and the home value, the revenue would be the rental income and the expenses would be the upkeep and maintenance of the home. But as I read further I start to think maybe my example is not a good example as it does not relate to business. Instead I try to think of this from a business perspective with my workplace. We often refer to our “overheads” which includes items such as electricity bills and wages. I am thinking overheads would be expenses. Assets could be our company cars or our building. Would revenue be our sales commissions and rental management fees?
The final thought I have before exiting the Study Guide is about the use of the word “destroy” where it mentions a firm can destroy value because expenses reduce the value of the interest of our equity investors in a firm. I think destroy is too strong of a word, sometimes your must spend money to make money. For example, you must buy company cars for your staff to get to appointments to make money. Unless I am missing the intended meaning of this concept.
At the end of reading both the Introduction and Chapter 1 I am feel nervous but also excited about what this unit has to offer.
Hello, Well this has not been as easy as I had hoped – I though my 2008 Myspace experience might help me with this blogging but it has failed me. I have started over twice and am still not feeling very confident.
The main purpose of me writing this entry (if that is what you would call it, like a diary entry I suppose) is to see how this post will appear on my blog.
Up until this point I was optimistic about ACCT11059. I have started PeerWise and have had some success in writing and answering questions.
I have also began ASS#1 which I was hesitant about when I first read I needed to give something of myself. I was mostly concerned that I would not have enough questions pop up into my mind while reading through the Study Guide, however I have found the opposite problem – too many questions. My other concern is I might end up giving too much of myself, non one wants that.
Anyway, I am off to see how this post displays on my new blog. Wish me luck.
Make it Account 