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ACCT11059 Accounting Learning and online communicationMy Company is Laura Ashley Home Furnishing and FashionAfter finding my company on Friday of week 1, I was perhaps a little disappointed at first why would I want to look at a women’s fashion and home furniture company. But after some reflection I realised that I had missed the point of this exercise, it shouldn’t matter what business we research as it is for research purposes. Even when as graduating students who is going to turn down a job offer because they aren’t interested in what the company does or produces. So after some intensive research I have found out quite a bit about the company that is Laura Ashley Home Furnishing and Fashion.Insert picture Laura Ashley plc is a British textile design company based in the United Kingdom but is controlled by Malayan United Industries (MUI Group) of Malaysia. It was founded by the name sake of the company Laura Ashley (B 1925 – D 1985), and her husband Bernard in 1950’s. Laura Ashley was a Welsh fashion designer, she started printing tea towels, table mats and napkins that her husband (who was an engineer) printed on a machine that he had designed and built himself. After designing and printing Victorian headscarves because they were not available at the time, she received her big break when fashion icon of the time Audrey Hepburn wore one of her head scarves in the movie Roman Holiday, from then on they became popular around the world. The company went public after her death in 1985 and had at the time had 34 times the number of investors for the shares that were available. This was also around the time they started their home furnishing range. The company almost collapsed in 1998, but Malaysian company MUI Group bought a 40% stake and it has until recently returned to profit.Insert pictureThe Chairman’s Statement is quite easy to read through, giving a brief over view of everything that has taken place in the company for the year that has passed and hopes they have for the year to come. Some of the main points of interest I found were that, the company is separated into the UK retail division which contributes 93% of group revenue from 160 stores down from 167 in 2017. This year they will open 2 new store but close 5. The international operations contributing 7% from 213 franchised stores. In 2018 the UK business which is split into four main categories, they are Home Accessories 34%, Furniture 29%, Decorating 20%, and Fashion 17%. I find this interesting that fashion now only contributes to 17% of the total revenue of a company that started as a clothes design company. Here is the Laura Ashley website so that you can look at what they have to offer: 1 Steps 3-6I am still enjoying this novel of yours Martin. It has started off setting the scene for what is to come in the introduction on accounting. Now as we move through we are getting down to the nuts and bolts so to speak, the rules of the game of accounting. I know a fair few different rules associated with work, driving a car and playing different sports. My obsession with golf means I know quite a lot of the rules of that game, there are a very large number of rules some are plain ridiculous but they are the rules so when playing you must abide by them.Rules in games as with rules in life in general are sometimes confusing and complicated, I am also sure to start with accounting will be no different. But after time spent through learning and understanding the rules of this game they will become very familiar to me as some already are. So who makes up all these different rules for accounting, after reading some of them I’m fairly sure it’s not the tea lady. Now this was confusing to start with the acronyms were flying everywhere for a while but I think I have them under control now. Accounting standards in Australia are set by the (AASB), now the (AASB) adopts with a few changes (IFRS) standards which are developed by the (IASB) who are based in London UK now that is a mouth full. With over 140 countries around the world using these rules there must be some sort of ‘police force’ to keep an eye on all the goings on of all these different organisations, in Australia accounting firms must answer to the (ASIC)Thankfully even though all accounting standards are legally binding for all companies the rules of the game don’t apply to everyone. I would not be very happy to go to my local café for a coffee only to find they were closed because they had to do their accounts and try to conform to (GAAP) and all the rules they have. There would be some very disappointed people me included.Apparently in accounting you can’t have a rule for everything. Why not I said, surely the people who come up with these rules (AASB) can make them ridged how hard can it be, here is a set of rules follow them. As I said earlier I play golf and they have some strange rules, If I was to hit one of my shots out of bounds I must play my next shot from where I just hit the ball and incur a penalty as well, I can’t just go up to where I think it went out and play another shot this is against the rules of golf and it is also one rule for one game. I now know why there are shades of grey in these rules that accounts use. If there are 2.2 million businesses actively trading in Australia admittedly quite a lot would come under the same rules, all bakers might have their own rules for example. But if each one of these 2.2 million businesses had just 2 different rules what a problem accounts would have trying to find the right rules all the time.Another one of these rules I have been unknowingly participating in is accrual accounting. I have paid electricity, phone and internet bills for many years not really thinking about the accrual accounting rules that take place. Even on our travels to Brisbane to see our daughter we are using accrual accounting when like you we put money on our go cards to ride the buses and trains, and our e-toll pass that is in our car for paying the various tolls we travel through. Imagine the logistical nightmare of trying to have houses with pay as you go electricity.Thankfully as a new student part of the rules of the game highlight the quality of information a company provides in the financial statements it provides in its annual reports. My firm Laura Ashley’s Annual report was very easy to read through starting from the chairman’s statement through to the accounting policies and footnotes related to the financial statements at the end, it was set out to be easily read. Another rule that appeals to me is that firms have to provide information that is relevant about itself, so I should be able to make an informed decision about any company I read about. At the end of week 1 our companies became available for us to look at, once we had found them we had to retrieve the four Financial Statements from the annual report. A balance sheet, income statement, statements in changes in equity and statements in cash flow.Why do we need so many different pieces of paper to tell us if a company has had a good year or a bad year, where would it leave us if a company just said we had a good year and made this much money. For one lots of accountants would be out of work and how would we know if they were providing relevant information about itself. Now the balance sheet tells me that on the 30th June 2018 and only on that day Laura Ashley had ?124.6 Million in total assets, ?88.2 Million in total Liabilities and finally ?36.4 Million in Equity. Hang on a minute this is something I’ve read this somewhere, assets liabilities and equity. That’s it chapter one the accounting equation, although a little different but still the same result: Assets – Liabilities = Equity. Finally it is starting to make sense I’m liking it.I still have a long way to go in reading this novel, however the more I read the more things are beginning to fall into place. While entering the group statement of comprehensive income another two words from chapter one come up, Revenue which is an increase in assets and Expenses which is a decrease in assets. No wonder this novel is set out the way it is, each step and task ties into the previous one making my learning experience all the easier to comprehend. In the last few weeks we have learnt about some rules of the game, the people who make these rules and finally we were introduced to financial statements. All good novels have a hook embedded somewhere in the first few chapters, this will get you thinking about what is to come in your novel I think I’ve found mine. ................
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