Accounting Analysis of the 2011 Annual Report for Bank of...

Accounting Analysis of the 2011 Annual Report for Bank of...

Table of Contents

1. Executive Summary 2

2. Overview 2

3. Description of key accounting policies and standards 2 3.1 Loans and advances at amortised cost (Asset) 2 3.2 Deposits and borrowing (Liability) 2 3.3 Employee benefits (Expense) 2

4. Flexibility of Management in Selecting the Key Accounting Policies 3 4.1 Loan and Advances at Amortized Cost 3 4.1.1 Flexibility Analysis 3 4.1.2 Accounting policies analysis 3 4.2 Deposits and Borrowing 4 4.2.1 Flexibility Analysis 4 4.2.2 Accounting Policies Analysis 4 4.3 Employee Benefits 4 4.3.1 Flexibility Analysis 4 4.3.2 Accounting policy analysis 4

5. Quality of Disclosure Made in BOQ Accounts 5 5.1 Business Strategy and Economic Consequences 5 5.2 Notes to the ... Show more content on Helpwriting.net ...Theoretically, investors require a discount on bonds because the market interest rate at the time of issue is higher than the coupon payments on the bond. Therefore, by amortizing the discount at the market interest rate, accounting statement of Bank of Queensland will exactly reveal the economic reality of the bond issue and its true cost of debt.

4.2Deposits and Borrowing

4.2.1 Flexibility Analysis

Due to the characteristics of banking industry, there is a high flexibility for management in these two liabilities. It is noticeable that deposits and borrowing accounted for about 97% of total liabilities on the balance sheet. Occupying 69% of total deposits, managers pay more attention to Retail Banking Services because of itsattractiveness to customers compared to other types of deposits.

4.2.2 Accounting Policies Analysis

This policy states that securitization set–up costs relating to on–balance sheet assets are included with securitization borrowings, and amortization is recorded as interest expense. Initially, excluding off–balance sheet costs makes the liability much smaller and enlarges their net assets. Likewise, interest on debt is a tax–deductible expense and creates a tax shield benefiting Bank of Queensland. The major function for this policy is to save cash flows for BOQ.

4.3 Employee Benefits

4.3.1 Flexibility Analysis

Employee expenses mainly consist of share based payments and employee benefits. All of

... Get more on HelpWriting.net ...