BA214 Corporate Accounting Assignment

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Reference no: EM132600743

BA214 Corporate Accounting - Melbourne Institute of Technology

Learning Outcome 1: Explain and apply the regulatory framework that applies to the financial accounting for corporations

Learning Outcome 2: Account for the financing company operations - issuing of shares, debentures, share options, and the forfeiture and re-issue of shares

Assessment Task Description

Moray Pty Ltd (MPL) is a large proprietary limited company exploring possibility of listing on the Australian Securities Exchange (ASX) to raise equity capital with a view to expanding existing operations, developing new businesses and new overseas markets. Board of directors of MPL strongly believes that taking on debt requires the company's managers to have a reasonable expectation of steady cash flow to make regular interest repayments, and there is a risk that investors may feel the company is too highly geared. Therefore, the Board does not want to raise capital by issuing debt instruments. They are considering whether to issue ordinary or preference shares on Initial Public Offering (IPO). Chairman of MPL has called for a detailed report from company accountant in this regard.

Required:

Assume you are the accountant of the MPL and write a detailed report to the Chairman.

In this task, you are required to examine the various ways in which an ASX listed company may initially issue and subsequently increase its share capital analysing "A Guide to Listing & the IPO Process in Australia" and "Chapter 7 of listed rules of ASX", issued in respect of share issues.

Report should incorporate the following:

1. Describe briefly listing requirements, IPO process and disclosure requirements in Australia.

2. Explain the nature of a share distinguishing between an ordinary share and a preference share.

3. Explain what happen if a share issue is underwritten or oversubscribed.

4. Explain the procedure involved in share forfeiture in accordance with Corporation Act 2001 administered by ASIC.

5. Explain the various ways in which a listed company may increase its share capital subsequently in keeping with Chapter 7 of listed rules of ASX.

6. Discuss the nature of a right issue, private placement of shares, share option and share buyback.

7. Your recommendation.

Attachment:- Corporate Accounting.rar

Reference no: EM132600743

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