I choose Lynas corporation ltd as my company

Lynas Cooperation Disclosures

Introduction

Lynas Corporation, Ltd. operates as an Australian rare earth mining company. The company exports its products globally and exists as a listed firm in the Australian Securities Exchange. This section presents the Lynas Corporation, Ltd. disclosures assessed and ranked basing its 2016 annual report reviews.

Analysis

Ranking /3

1. Nature and regulation of companies

  • The report clearly demonstrates Linus Cooperation, Ltd as a company limited by shares and incorporated in Australia (p. 53).

  • The Interest of Directors in capital shares and related options (p. 45).

  • Shares provided to employees (p.51)

2. Financing

(Debt, Equity)

  • Statement of Financial Position clearly separates current and non-current liabilities, with notes providing additional detail for most liabilities (p. 50).

  • 4 components of equity clearly shown, and notes for each component providing further detail / breakdown

3. Company operations and financial statements

  • Statement of Comprehensive Income presented as a single statement, detailing profit and other comprehensive income (P. 47).

  • Dividends paid clearly detailed in Statement of Changes in Equity (p. 68) (additional detail in notes)

  • Sales from goods / services shown separately to other revenue (47)

  • Accounting policies clearly shown in Note 1 (p. 61) (GPFS, prepared in accordance with Australian Accounting Standards, comply with IFRS, use historical cost) (P. 47).

  • Unclear whether expenses are classified by nature or function; note disclosure for only 1 type of expense

4. Financial statements

The four financial statements presented in accordance with AASB and Corporation Act 2001 (P. 46-50).

Statement of financial position clearly classified assets and liabilities as current and non- current.( p. 66)

Additional and essential notes on financial statements (50)

5. Accounting for income tax

  • Income tax expense clearly shown in the Statement of Comprehensive income , with additional detail in note 8 (p. 68).

  • Deferred tax asset shown as a non-current asset in Statement of profit and loss, but no mention of deferred tax liabilities in statement or notes (p. 74)

6. Business combinations

  • Enumerated significant company activities ( p. 57)

  • Significant changes and events in business segments presented. ( p. 67)

  • The business acquisition provisionally recognised at its fair value with additional information provided. (p. 81)

  • Acquisition expense detailed in development expenditure. ( p. 65)

7. Consolidation

  • The consolidated entity reports of three operating segments clearly presented. (p. 88)

  • Consolidation statements prepared in accordance with the AASB and the Corporation Act 2001 (P. 46).

Nature and Regulation of Companies

Lynas Corporation emphasizes on the need of strengthening its four financial statement system. These statements include the statements of profits and loss, changes in the equity of the firm, financial position and cash flow statements. Lynas Corporation discloses the four statements at the end of every transaction period. Also, these statements form the greatest part of the company reporting system. The statement of financial position shows the company assets, liabilities and equity. Also, this statement classifies all the company assets and liabilities following their nature or in the order of company liquidity. Regarding nature, the two fall into either current or non-current.

Financing

Lynas Cooperation devices a plethora of mechanisms to ensure its sustainability regarding debts and equity. Apart from the company annual operational supernormal profits, Lynas Cooperation uses debts to finance its operations. These debts come in form of borrowings where the Group’s detailed facilities of physical debt borrowing are established within the Note 24 Borrowings.

These securities comprise of Mt Kellett convertible bonds and JARE loan facility. The Note 24 Borrowings and Note 37 Subsequent Events stipulate on the company’s operational standards. Currently, Lynas Cooperation has amended agreements on its long-term debt structure alongside its debt providers. The company uses the JARE loan finance and improve its operations. The two credit facilities will extend to 2018.

There are effective mechanisms put in place by the company management to demonstrate how repayment adjustment occur to benefit Linas Cooperation. The company draws its credits from different organizations including Australian banking institutions. Lynas Cooperation builds a strong relationship with its creditors and debtors to ensure efficiency in operations as a strategy towards achieving its goals.

Company operations and financial statements

Lynas Cooperation has some operations and financial statements prepared for the need to facilitate its operations. The company financial report preparation used a historical cost convention with the exemption of some inventory constituents measured at derivatives, net realizable value, and the specified assets available for sale. However, the company presents some non-current assets on a revalued amount.

Lynas Cooperation takes a led role in some activities that generate supernormal profits to the company apart from mining and selling rare earth products. This information comes from different consolidated financial statement including cash flows statement for the contextual year in comparison to its processor. The company also carries out amortization of developments. Lynas cooperation amortizes its costs from the start of commercial production.

Other operations involve the exploration and evaluation of the company expenditure accumulated in the order of every identifiable area of interest. These activities are extensive including conducting research and analyzing historical investigation information. The company also gathers exploration data by using geochemical, topographical, and geophysical studies as well as indulging in trenching, exploratory drilling, and efficient sampling. After drilling, the processing stage examines and determines the grade and volume of all mineral resources before conducting finance and marketing studies.

Financial statements

The financial statement of Lynas Cooperation on 30tfh June 2015 comprised of the firm and its subsidiaries summed up as “Group.” The group assists in mining of the targeted minerals in Malaysia and Australia. The registered company address is level 1, seven on Tully Road, East Perth WA 6004, Australia. Preparation of financial report used the going concern assumption while considering factors affecting the firm’s operation.

Factors influencing the financial position of Lynas Cooperation ranged from constant low prices of Rare Erath products during the first quarter of the FY16 and the assertion that this negative trend could continue impacting the company. Recently, the company announced to consider the restructuring of its debt facilities with the adherence of the company financial report to International Financial Reporting Standards and Interpretations (“IFRS”). These regulations are issued by the International Accounting Standards Board (“IASB”). The company, Board of Directors, approved its financial report on September 21, 2015.

Accounting for Tax

Lynas Cooperation accounts for all taxes incurred in the course of its operation as a strategy towards ensuring the achievement of its objectives. Deferred and current tax form the income tax expenses of the company. The company recognizes expenses of income tax as a loss or a profit component to the level of relating it to the items directly acknowledged in either equity or other forms of comprehensive income. The current company tax refers to the expected tax payable on the taxable income by the use of rates enacted during the date of reporting as well as any adjustment to the tax paid in the preceding years.

Lynas Cooperation tax arises from different sources including goods and services tax, Sales tax and value added tax. The company recognizes deferred tax is by the use of a balance sheet method involving provision for temporary differences gained from the assets carrying amounts as well as the liabilities incurred in the process of financial reporting aims and book value for the purpose of taxation. The company reviews deferred tax assets at every reporting date.

Business Combinations

Lynas Cooperation engages in a plethora of studies to understand the best types of businesses that can operate alongside or in collaboration with the extrusion of rare earth products. More research is tailored towards understanding the accounting treatment for the overall company performance. Lynas Cooperation combined with its entirely owned Australian resident entities established a tax-consolidated group who became active form July 1, 2002 and are hence taxed as a single business firm.

This decision helps the company to minimize on its expenditures associated with tax such as current liabilities, assets as well as deferred tax assets resulting from unutilised tax losses and influential tax credits of the members of the tax-consolidated groups. More entities are continuously entering a tax consolidation company with Lynas Cooperation to minimize the group’s expenditures.

Consolidation

The company has an effective strategy that entails consolidation of some operational activities by the use of its Consolidation financial statements (CFS). This technique is effective at combining the individual entities incurred in the company operations to demonstrate its financial status as a single economic entity. The company has, therefore, a critical role to play in ensuring that all its CFS are well prepared by compiling, like items of assets, line by line, equity, income, liabilities, and expenses. Lastly, Lynas Cooperation has to adjust these different combined figures for intragroup transactions among different entities in a given group.

Works Cited

Linas Cooperation Limited (2015). 2015 Annual Report and Appendix 4g.