In 1960 the socio-economic condition of Maldives was a promising one.Need to have a central organization to import necessary goods to raise the standards of living and development become apparent. In 1964, Maldivian government has set-up a state-funded business with one motto to strengthen national food security. The company was named Athireemaafannu Trading Agency (ATA) and its main task was to import and purchase essential food items in bulk to be distributed nationally via ATA's own retail outlets and local leaders. ATA bought supplies for the government and sold its imports at low mark-up to the public.
ATA was the initial phase of STO and it became the catalyst for change in the Maldives. With proving track record of contribution to national development, ATA rises to become the State Trading Organization (STO) on 9th June 1979. Maldives government provides all trading and commercial activity to STO. The demand of the national was growing with growth of the nation. STO stick to its key mission and expanded its imports. STO firstly stress upon increasing the number of commodity items and subsequently diversify to modern construction materials, consumer goods and home appliances.
With the passage of time, Economy of Maldives picks up speed, due to increasing commercial activity basically in agriculture, fisheries, tourism and construction industries. STO diversified and took up alternative enterprises to earn foreign exchange and broaden the revenue sources of the nation.
STO group along with its subsidiaries, associates and joint ventures is a national leader in business. STO has focused its interest in cooking gas, petroleum, medical supplies and pharmaceuticals, construction materials, electronics, home appliances, insurance and supermarket products. The country has spread geographically in terms of operations and developments are going on in Maldives and Singapore.
STO is now focusing on spreading its wings in the tourism sector. Upcoming projects are designed to make sure STO a big player in hospitality industry and give foreign exchange in near future.
Many accounting standards are important for a company to follow. In this analysis, we are stressing upon four accounting standards. They are:
- IAS 1 (Presentation of financial statement)
- IAS 12 (Accounting for Government Grant)
- IAS 16 (Property Plant & Equipment)
- IAS 38 (Intangible Assets)
The financial statements of STO for the year ended 31st December 2014 provides relevant adjustments and disclosures required while preparing the financial statements, accounting for property plant & equipment, accounting for income tax, accounting for intangible assets.
Other than accounting standards, the company follows accounting concepts such as materiality, accrual and going concern concepts. Furthermore, the order of information and formatting used in the statement were in compliance with relevant international accounting standards.
So, it can be concluded that STO has fulfilled all the necessary requirements of international accounting standards.