'Statutory Disclosure Analysis of Annual Report\r'

'Below Is the analysis of annual report of consumer proceeds (Hub Seen) and instruction company ( sunlight) in compliance to the pecuniary reporting stock(a). FRR 107 avowal of cash Flows Sunday is apply direct method duration Hub Seen is victimisation confirmatory method in presenting their Cash Flow Statements in the individual Annual Reports. Direct Method is favored since this method shows the cash defrayment and receipts which atomic number 18 this Information be useful to the users of the financial statement In screaming in store(predicate) cash flow.Thus Sunday is using method that more relevance to the user objet dart Hub Seen is using method that little relevance for the users. FRR 121 The cause of Changes in Foreign Exchange Rates two Sunday and Hub Seen ar exposed to the foreign transmute difference. For Sunday, it is arises from operation of its subsidiary that located outside Malaysia. season Hub Seen foreign capital difference Is mostly due to th e purchases that denominated In other currencies from Its functional currency.But Hub Seen did not prosecute with any formal hedgerow activities since the transaction is at an acceptable level where as, Sunday is applying natural hedging which is to reduce its risk in foreign currency by borrowing in the country they invested so that they can match he borrowing cost to the revenue earned. Therefore, the foreign exchange risk is reduced. So this information Is useful for the users since the Information Is relevant to predict the future In safeguarding their Investment In the respective companies.FRR 118 Revenue Both companies recognized its revenue fit in to the approved standard to the extent that it is probable stinting utilitys flow to the companies. Similar revenues that recognized by both(prenominal) companies are sale of goods, dividend, interest and rental income. The regardful is that, Sunday have more source of income which is gross revenue of repertories under develo pment, land and property Inventories; sale of services, rights and sport; club subscription fees and time share revenue.It Is useful to the users of financial statement when they necessitate to reap decision in which industry to invest in or when they want to diversified their portfolios. FRR 119 Employee Benefits Both companies are compliance to the standard in disclosing the defined voice plan and concise term employee benefits to the users. But Sunday have other employee benefit that Is share based earnings that allows the employees to admit share of Sunday at net of presently attributable transaction cost.Sunday is volunteering in providing such benefit to the employees. So this kind of benefit may mitigate the motivation of the employees in discharging their duties exceed expectation. Thus, this motivation go away lead Sunday in higher cognitive operation which is this relevant information is useful to the users in predicting future performance of the company. FRR 1 24 Related Party Disclosures Key precaution personnel are considered related party to the company.Therefore, the companies acquire to disclose the total compensation stipendiary to them. Hub Seen only if provided short term employee benefit and defined contribution plan to their key guidance personnel while Sunday also providing share based payment in addition to the other two types of compensation. This shows that Sunday are more concern with the compensation give to their key personnel since the key personnel are involving in decision making of the company which confine the company future performance.Therefore, by providing extra compensation compared to other company like Hub Seen, the key management personnel will be happy and actuate n discharging their duties diligently and with due care. FRR 124 Inventories Both companies state their inventories at lower of cost and net realizable value. Net realizable value is the estimated selling expenditure in the ordinary cour se of business less the estimated costs of completion and the estimated costs necessary to make the sale. But Sunday is using weighted mean(a) method while Hub Seen is using first in first out method (FIFO) in find their cost.For Hub Seen, using this method will show the highest service compared to weighted average method (WA) and last in first UT method (LIFO) because of the nature of inflation. even though higher reported gross net profit is seem to be favorable to the investor, still this will resulted in higher tax to be paid by Hub Seen. Maybe one of the reason Hub Seen adopt FIFO instead of other method is that, they are engaging in selling perishable item which is not suitable to use LIFO since the remaining inventories will be obsolete and thus, invaluable.\r\n'