Accounting Analysis on Cabcharge Company Essay Example
CSF 1- Stable Service Fee Margin that is greater that 9 per cent (Key Revenue Generator)
For this first critical success factor, the accounting policy under consideration is the total turnovers in regards to the amount of revenues being recognized by the company at any given moment. Cabcharge fundamental revenue structure is greatly involved with a full payment cost structure. However, in regards to its flexibility, it can be ascertained that the aforementioned structure is not fairly reported within the entire annual report of the company. In regards to the profitability levels between the company and such other competition services like the use of MasterCard and Visa to pay for cab services is fairly higher. A closer analysis into the annual report postulates that the company does not represent revenues in conformity to the Australian Accounting Standards rather the item is recognized to be the immediate values of the taxi hire charges that is paid through Cabcharge Payment System plus any of the company’s account service fees and revenues from distinguishable sources for that matter. Significantly, under this success factor, the margins on a contactless payment are perceived in a different manner. This can be depicted in regards to the distinctiveness of revenue cross and the amount of subsidization affected in the course of paying with the Cabcharge visa-vie the credit cards.
CSF2: Diversification & Growth of Revenues Streams via Acquisitions
The key accounting policy that can be used to postulate this model of growth for Cabcharge operations rests with the Consolidation Accounting that is focused on AASB 10. It should also be noted that this basis of consolidation is compliant not only with AASB but also International Financial Reporting Standards (IFRSs). Notably, under this accounting policy, it is established that the financial statements of the company’s immediate subsidiaries are included within the consolidated financial statements for the period between the control commenced and when it ended. The firm’s immediate associates are entities for which the entire group has massive influence but not control over. Significant influence should be placed between 20 and 50 percent of the entire voting powers within the subsidiary.
In regards to the flexibility of this critical success factor, it can be fairly ascertained that there are imminent distortions time and again within the controlled taxi operational network that is reflected through to the Group entity. In consequence, the firm has been engaged in numerous acquisitions for purposes of bringing about the growth and diversification of operations.
CSF 3: Vertical Integration of Supply Chain Yielding Cost Savings/Asset Sharing
Under this critical success factor, the accounting policy at hand rests with Segment Reporting fairly stipulated within AASB 17. It has been established that the company does not rely on this fundamental aspect of reporting given that the Group, its associates and subsidiaries operate distinctively but only come for common consolidation of their financial statements within any given operational year. Thus, in regards to the flexibility of the accounting policy, it’s almost uncertain to determine whether some segments of the reporting like payments have acted in a way that subsidizes other segments like taxi networks.
Inadequate Disclosure of Quality
First, from the analysis above, it can be certainly posited that the company’s annual reporting standards have failed to provide disclosure quality on such important areas as operational segments and associated entities within the overall operations. Subsequently, for effective analysis of the myriad of accounting standards and policies there need to be a greater level of separation on taxi network and taxi processing fees mixes in order to allow for the assessment of possible changes for each of the aforementioned key revenue operational areas.
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