Sunteți pe pagina 1din 26

1.

1
Profits declined considerable in 2010 and 2011 after a good
performance in 2009. The reasons were mixed but controllable. In
2009, revenues were up and expenditure was low. In 2010,
expenses were pretty much the same but revenues dropped,
creating less profits. In 2011, revenues were up but so were the
expenses.
Expendi
Income
$1,724.

ture
$1,501.8

Tax

Profit

2011

92
$1,520.

5
$1,302.1

$222.95

$141.25

2010

36
$1,706.

1
$1,344.2

$218.25

$153.10

2009

52

$362.30

$234.03

Main areas for profit have been rooms division sales and food and
beverage sales. Main areas for loss have been more than expected
expenditure by housekeeping and kitchen. Profits and losses are
also closely linked to the quality of our Standard Operating
Procedures. Poor procedures that are inefficient lead to more labour
costs and higher expenditure figure at the end of the financial year.

1.2
Profits and loss are linked to each decision made on every single day
throughout the financial year within the organization. No one person
or operation can lead to surprising losses. They are a chain reaction,
one decision leading to the other catastrophe. Although Crimson is
not in loss, the profits are not as much as they could be considering
the fact that we have done better at same scales in the past.

Profit
Tax
2009
2010

Expenditure

2011

Income
0%

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Reasons for less than expected profits at Crimson are due to several
factors across an array of hierarchical issues and personnel. A few of
these are:

Poor employee interaction


High internal workplace politics
Weak SOPs
Unregulated working hours and Roster management
Poor Inventory management
High food costs
Poor service leading to higher discounts
Higher interest rates from banks
Lack of employee induction and training

1.3
Crimsons new Corporate Marketing Plan is all about attracting new
customers and retaining them through excellent service standards.
Inform-Attract-Deliver-Retain is the new strategy under which they
plan to re-launch their hotel brand to promote growth within midsegment market. This entails companies, which are looking for
medium-priced accommodation option for their employees and
clients. Critical dates for the new plan are set in accordance with the
fact that it will take around 8 months to make the plan fully
functional and achievable:
Step

Timeframe

Charting the Plan

1 Month

Approval

2 Weeks

Finance Allocation

2 Weeks

Budgeting

1 Month

Marketing

2 Months

Launch

1 Month

First Result Cycle

2 Months

Primary resources that would be required for the corporate


marketing plan will be:
1.
2.
3.
4.

Finances from liquid funds/loans


Assets from already existing register
Human resources
Equipment, facilities and supplies

1.4
Cash flow is the dominant tool to analyse the performance of a
company. Cash flow is the movement of money into or out of a
business, project, or financial product. It is usually measured during
a specified, finite period of time. Measurement of cash flow can be
used for calculating other parameters that give information on a
company's value and situation. Cash flow can be used, for example,
for calculating parameters:

To determine a project's rate of return or value.


To determine problems with a business's liquidity.
As an alternative measure of a business's profits when it is
believed that accrual accounting concepts do not represent

economic realities.
Cash flow can be used to evaluate the 'quality' of income
generated by accrual accounting. When net income is
composed of large non-cash items it is considered low

quality.
To evaluate the risks within a financial product.

In case of Crimson, analysing the cash of flow over last three years,
we observe the following:
2011

2010

2009

$435.84

$402.45

$493.56

$30.53

$85.40

-$45.36

$466.37

$487.85

-$748.95

-$649.90

$448.20
$1,105.74

Cash Operating Profit


Cash Activities
Net Cash
Cash Invested

It clearly shows that the money management has improved over the
last few years and long-term investments have been more closely
monitored to be invested in. purchase of fixed assets has increased
and so has the sale of fixed assets. Interest received has also seen a
substantial rise in last two years while the long-term deposits placed
with subsidiaries have reduced.

1.5
Tax is a legal duty towards our government, which in turn, manages
our communities for us and makes our environment a better place
to live. Statutory requirements depend a great deal on the nature
and type of business we operate. The nature of our business
determines many of the statutory requirements we need to meet.
The structure of the business
For example, we need to consider:

Whether our business will be a company, partnership, sole

trader, or trust. Each has different requirements


Business registration requirements. If we're not trading under

our own name, we need to register our business name


Australian Business Number (ABN) registration. All businesses

must have an ABN


Goods and Services Tax (GST) registration.

Employing staf

If we intend employing staff, we may need to consider:

Pay As We Go (PAYG) withholding tax


Payroll tax
The Superannuation Guarantee (SG)
Awards or agreements
Workers compensation (WorkCover).

Location
Depending on where we locate, we probably should consider local
government regulations dealing with:

Development applications
Building permits
Height restrictions
Parking requirements
Landscaping.

Our industry
Different industries often require different licenses. For example, a
restaurant requires a food operator's license, whereas a building
company requires a building license. The licenses and permits
required vary according to the type of business and the local
government in which the business operates.
This subject goes on to cover:

Sources of statutory requirements for different types of


businesses

The help we can get with statutory requirements from


SmartLicence other sources of assistance.

1.6
Using software to assist in keeping our finances in order is a great
way to stay on track. Most financial software will allow we to keep
track of income, expenses, and even our investments. Some even

have the option to automatically download or connect to our


financial institutions via the Internet, which can simply the process
even further.
1. Quicken Premier 2009
Intuit's Quicken software has been a staple for many people for
years, and the 2009 edition continues to deliver the goods. Quicken
allows we to easily track every aspect of our finances, from income,
expenses, real estate, and our investments. As an added bonus, we
can also directly connect to our bank or brokerage account through
the web so that we don't have to worry about importing or manually
entering data for most transactions. If we're a Turbo Tax user, we'll
also enjoy the simplicity of importing our data from Quicken right
into our tax return in Turbo Tax.

2. Microsoft Money
Microsoft Money Plus Premium makes it easy to begin planning for
our future, whether it is saving for college, getting out of debt, or
building our retirement nest egg. Microsoft Money Plus Premium
2009 takes investment management to a new level with enhanced
features that allow we to track our investments in great detail as
well as having quick access to research tools. It is important to note
that Microsoft Money is being discontinued as of 2009. We can still
use existing software, but there will be no more updates going
forward.

3. Mvelopes Personal Budgeting System


Unlike Quicken or MS Money, Mvelopes is an online software tool.
The real benefit to this type of system is that we can access our
information from any computer that has Internet access. Mvelopes
is also different in that it focuses on budgeting. Money and Quicken
have a broad coverage of financial tools, but Mvelopes lacks the

more advanced investing and reporting features. But if we are


looking for software that can help we get that budget started and
keep track of where our money goes, this is a great alternative.

4. Mint.com
If we're looking for a good free money management option, look no
further than Mint.com. Mint is an entirely online application that
allows we to manage and track our expenses from any computer. In
addition, Mint seamlessly integrates with most existing bank
accounts to easily import our data. If we're always on the go, Mint
even has a mobile phone application that can help we keep tabs on
our spending wherever we are. A few more have been compared
below:

2.1
Resource allocation is the distribution of resources usually financial
- among competing groups of people or programs. Resource

management and hence, careful and planned allocation is vital to


reduce waste, maximize efficiency and making required resources
readily available to the managers. Achieving such target would put
the company in a very strong position wherein all the managers
have access to all the resources they require and such resources are
being used at multiple levels across multiple departments making
full use of time and efforts. This will give Crimson a strong
competitive advantage and reduce its costs further and ensure
higher product and service quality. In order to achieve this, it is
important for the resources manager to know and understand what
resources are required, where can these be arranged from, what
resource is meant for more than one purposes, who need what
resource, when and how frequently; and, the respective budgeting
for such resources. Following will be the resources required by
Crimson for the new plan:

Manpower (Engineering and Maintenance)


Human Resource (Operations)
Financing
Stakeholder Communication Personnel
Marketing Resources
Media Resources
IT Resources

2.2
Additional Cost Estimation Plan:
Item

Cost

Budgeting

$2,000

Marketing

$25,000

Equipment

$32,000

Communication

$4,000

IT

$10,000

Finance

$3,000

HR

$12,000

Media Resources

$5,000

Contingency Reserves

$18,000

2.3
Revenue

2011

2010

2009

2012

$580.13

$488.98

$460.08

$658.45

$1,093.37

$919.96

$1,073.95

$1,240.97

$0.00

$64.35

$85.54

$0.00

$1,673.50

$1,473.29

$1,619.57

$1,899.42

$29.89

$36.83

$69.50

$33.33

Profit on Sale of Assets

$0.00

$0.30

$4.09

$0.00

Profit on Sale of Current Investments

$0.05

$0.00

$0.04

$0.06

$11.68

$3.33

$0.00

$13.02

$9.80

$6.61

$13.32

$10.93

Total Other Income

$51.42

$47.07

$86.95

$57.33

Total Annual Income

$1,724.92

$1,520.36

$1,706.52

$1,956.76

$1,264.40

$1,101.44

$1,164.77

$1,390.84

Depreciation/Amortization

$108.46

$104.14

$94.46

$119.31

Interest

$139.99

$104.99

$95.40

$153.99

Income
Food and Beverage
Rooms, Restaurant, Banquets
Other Operating Income
Total Income
Other Income
Dividend Income

Exchange Gain
Miscellaneous Income

Expenses
Operating and General Expense

Other
Total Other Expenses
Profit Before Tax
Tax
Net Profit After Tax

-$10.88

-$8.46

-$10.41

-$11.97

$1,501.97

$1,302.11

$1,344.22

$1,652.17

$222.95

$218.25

$362.30

$304.59

$81.70

$65.15

$128.27

$90.27

$141.25

$153.10

$234.03

$214.32

3.1
Informing any other employee is a process wherein the responsible
party must decide the level at which it is to be done. I would
personally inform the managers and supervisors through a proper
formal training session. A brief session for about an hour that
contains scope for a detailed presentation, Q&A session and general
discussions among the members. Rather than informally educating
everyone and running the risk of them asking repeatedly or making

mistakes, I would conduct a formal training session wherein all the


desire

information

about

budgeting,

finances

and

financial

responsibility can be disseminated and it could be ensured that it


has been delivered and understood at both ends.

3.2
Funds do not exist within the company in the form of cash. Most
fraudulent intentions come into effect through finance department,
which handles and monitors all the transactions. It is thus important
to have sufficient internal controls and checks to immediately
highlight the responsible fraudster. It is not possible to prevent
people from doing things. It is however, possible to have systems
wherein any unwanted behavior becomes highlighted before bigger
damage is on its way. Thus excellent bookkeeping and internal
controls and checks are the only way through in this case. To have
an efficient and fraud-proof system of bookkeeping we need to:
1.
2.
3.
4.
5.

Have one accounting and bookkeeping system in the company


Have an internal auditor
Ensure the ethical knowledge of our accountants is up-to-date
Regular monitoring and cross-verification of transactions
Weekly, monthly and daily reports to track any unusual
transaction

3.3
Looking at the figures, it is quite apparent that the finances side of
Crimson is unstable at times. As compared to 2009, income has not
seen a substantial increase while the expenses have been rising all
along. Interest payments have increased in magnitude. Net profit
before tax has fallen substantially:
2009

362.30

2011

141.25

This is a major decrease and the reasons must be uncovered. On the


other side, sale of Food and Beverage has increased over the last
two years and so has the income from sale of rooms.

3.4
Revising the present budget for managing contingencies is a great
step, as it will help Crimson to deal with the crisis-oriented situation
with ease and efficiency and get back to normal at the earliest
notice. To do this, it is important that Crimson starts to include a
contingency budget within its main planning and organizing activity
at the beginning and the end of each year. Risk management is the
process of identifying and proactively responding to project risks.
Generally (but not always) we will look for ways to eliminate risks or
to minimize the impact of a risk if it occurs.
However, what if we're unsuccessful in preventing some risks? In
that case, the risk will actually occur and cause some type of
problem for our project. If the risk occurs, there may be some
monetary impact on our project.
A risk contingency budget can be established to prepare in advance
for the possibility that some risks will not be managed successfully.
The risk contingency budget will contain funds that can be tapped
so that our project doesn't go over budget.
The question is--how do we know how much money to place into the
risk contingency budget account? We can use Expected Monetary
Value (EVM) as a technique to quantify the risk into budget terms.
The risk contingency budget works well when there are a number of
risks involved. The more risks the team identifies, the more the
overall budget risk is spread out between the risks. The EVM
technique provides a formula for determining the right amount of
budget to apply to the risk contingency budget.

3.5
Our ability to tell the complete story of what happened to all client
funds from the date of receipt to the date of the final disposition is a
pivotal requirement of our job.
We need to maintain a good audit trail that ties together all the
records that relate to a financial transaction. We may record the
same information several times in various journals and ledgers to
accomplish this function.
An audit trail is a number of documents that make it possible to
trace what happened to trust or general funds that the practice has
handled. It should start when we receive funds on behalf of a client
and continue until we issue the final cheque and the balance that
we owe the client is zero.
The following documents provide a paper trail for most transactions
that we will record:

The initial receipt of funds;


The initial deposit slip or copy of a bank receipt, which shows
the date of the deposit, the amount of the deposit, the
name/file reference of the client on whose behalf the money is
received, the source of funds and the date stamp showing the

date the money was deposited and received by the bank;


The bank statement which shows the date the bank has

credited the deposit;


The cheque stub/cheque requisition, which shows when the

withdrawal was made and to whom;


The cheque which shows the date it was drawn, the amount,
the payee, the purpose of the cheque, the order of negotiation

from the endorsements on the back of the cheque;


The bank statement which shows the date the bank account

was charged with the cheque;


Any file documentation that would explain and support the
deposit or the authority for how the clients funds should be
distributed, such as a closing statement of account, a court
order or a signed authorization by the client for the
disbursements of the funds.

Each deposit and disbursement should adequately provide a


complete description of the transactions to which it relates.

3.6
Compliance with the legislation is a vital step we need to take
alongside every other step we take. We want to be a legally
operating company at all times and thus we need to have systems
in place which are flexible and evolving enough to keep us up-todate with the legislation and statutory requirements:
There are two compliance management models that you can use to
ensure this:

The ten commandments model: publish the set of rules, and

punish people who transgress them


The quality management model: publish an intermediate
set of policies and procedures which comply with the rules,
and ensure that people follow the policies and procedures

The 'ten commandments' model works well where there is a simple


set of rules that everyone can understand. It breaks down
completely where there is a complex set of rules (such as ISO9001,
or the Privacy Act), which need interpretation, or are just too large
to memorize or access.
The quality management model is widely used, and is actually

specified by regimes such as AQTF, ISO9001, and the Financial


Services Reform Act. However, each of these regimes looks at the
model in the context of the implementation of a single set of rules
(AQTF, ISO9001, etc.). The problem facing most organizations now is
that they have to cope with more than one set of rules.
Many organizations have ISO9001 certification, and in fact we'll
assume for the rest of this article that the organizations we're
dealing with either have ISO9001 certification, or intend to get it, or
have something equivalent.
On top of that, all organizations have to comply with the law. The
Privacy Act is just the latest in a long line of legislation aimed at the
actions of organizations. The Trade Practices Act has been around
for a while, and is every bit as binding (and if anything, more
complex) than the Privacy Act. There are numerous pieces of
legislation covering the operation of companies.
Many industries have their own codes of practice or other sets of
rules. Registered Training Organizations have to comply with AQTF
standards. Companies that manufacture medical goods have to
comply with TGA's GMP code.
In short, every organization in the country has to comply with
multiple, overlapping, sets of codes, requirements and laws. On a
regular basis, the quality manager (or compliance manager,
company secretary, etc.) carries out a 'scan' of the current
legislation, standards, etc. There are two things to look for during
this scan:

Additional codes, etc., that need to be added


New versions, changes, rulings, for existing codes

4.1
There is a set of legal requirements when it comes to publishing

annualized financial and non-financial reports. These regulatory and


statutory requirements must be adhered to when disclosing
company information at the end of financial year.
Annual Report Compliance Checklist
Letter of Submission
Application for extension of time
Charter
Aims and objectives
Access
Management and structure
Summary review of operations
Funds
granted
to
nongovernment
community
organisations
Legal Change, Economic or other factors
Management and activities
Research and development
Human resources
Consultants
Equal Employment Opportunity
Disability Plans
Land Disposal
Promotion
Consumer Response
Payment of Accounts
Time for Payment of Accounts
Risk management and insurance activities
Internal audit and risk management policy attestation
Disclosure of Controlled Entities
Disclosure of Subsidiaries
Multicultural Policies and Services Program (formerly
EAPS)
Agreements with the Community Relations Commission
Occupational Health and Safety
Waste
Budgets
Financial Statements
Identification of audited financial statements
Inclusion of unaudited financial statements
Additional matters for inclusion in annual reports
Investment performance
Liability management performance
Exemptions
Performance and numbers of executive officers
Government Information (Public Access) Act 2009
Public Interest Disclosures
Implementation of Price Determination

Credit card certification


Requirements arising from employment arrangements
Form of annual reports generally
Submission of annual report to appropriate minister
Presentation of annual report to Parliament
Annual reports size presentation to Parliament
Printing requirements
Public availability of annual reports

4.2
Comparing the financial performance of past years with the current
one is a base benchmark of performance analysis and makes
obvious sense. We need to know how we did over a period of 365
days the same time last year and how did we do it in the current
one. Monitoring and measuring figures and comparing them with
the historic ones reveal patterns and trends that are useful to make
decisions that will have a profound impact on the future of the
company. Companies traditionally judge their quarterly financial
performance by comparing their latest quarter with the same
quarter of the previous year. They refer to this as year-over-year
(YTY) change. Sometimes companies also point out how the current
quarters results compare to the previous quarter, what is termed as
sequential change. Comparing results of the fast three years, it is
apparent that few changes are required to keep the business on a
profitable track. Looking at the financials, it could be suggested that
Crimson should:
1.
2.
3.
4.
5.
6.

Have more precise SOPs in place


Report discrepancies more frequently
Keep employees informed, educated and motivated
Stick to stricter timelines and objectives
Reduce costs and improve efficiency of operations
Price the rooms strategically within the market to make better
profits

4.3

Financial viability is about being able to generate sufficient income


to meet operating payments, debt commitments and, where
applicable, to allow growth while maintaining service levels.
Assessment of financial viability is an integrated process involving a
review of a companys audited financial statements, Financial
Performance Reports, business plan and other information that
supports financial analysis.
The initial focus of the financial viability assessment is a companys
audited financial statements for the previous financial year. The
results are assessed with the budget and financial projections in the
business plan. The trends in actual results over a three-year period
are then assessed and projected forward over one to three years
(depending on the registration class of the company).
To place these results into a broader context, the companys
business plan is used in order to understand their future plans as
well as their perspective on the business, growth (where applicable)
and risks.
The business plan will provide insights into the companys resource
management, growth plans (where applicable), capital structure and
liquidity. The business plan provides the roadmap to guide the
company towards its long-term goals. The financial plan is a vehicle
to allow the company to realize its long-term goals.
To ensure financial viability of the business, Crimson should:

Assess its profitability and cash flow more frequently


Assess its short term liquidity
Assess its Capital Structure
Perform an overall financial assessment with expert help
regularly

Liquidity including current ratio and cash flow assessments


Solvency including debt to assets assessment, debt to equity

assessment
Economic Dependency

for

example,

reliance

upon

government funded training, or reliance on a particular cohort

of students (e.g. overseas students)


Revenue, profit and cash flow
Commercial risk
Audit opinion
Contingencies
Compliance with all of its statutory obligations (for example:

GST, taxation, superannuation, Companies Code)


Compliance with accounting standards
Accounting policies impact of the organizations accounting

policies on its financial risk.


Independent reviews of

underlying assumptions
Business planning including forecast income streams and

forecast expenditure
Assets and liabilities
Financial statements audited by an independent qualified

auditor
Financial records for the previous 12 months, including profit

and loss, balance sheets


Cash flow and bank accounts
Short term budgets and forecasts, including assumptions
Information on current and projected student enrolments,

including assumptions
Tax records
Information about current debts and debtors, credits and

creditors, loans and repayment


Plans, and information on any legal disputes
Inter-company dealings, transfers, ownerships and loans
Contingent liabilities
Ultimate ownership details
Post reporting activities (includes activities that relate to the

financial

projections

including

period after accounts have been audited that would have a


material impact on the organizations operations, viability or
ownership).

4.4
The current environment for financial management is a complex
one:

Financial management responsibility is often dispersed


Many financial constraints
Trade-offs and rationing
Many stakeholders claiming rights of influence
Cost reduction pressures
IT to drive down transaction cost and streamline back office

functions
Increasingly there are political risks as well as business risks.

If the aim is to improve business performance by better financial


management, Crimson needs to ensure it is:

Drawing a clearer connection between strategic direction,

Business Agreement targets, business objectives and finance


Giving management at all levels absolute clarity about their
budgets and the outputs and outcomes to be delivered with
the funding, with appropriate rewards and recognition for

successful delivery
Ensuring managers

set

and

track

progress

against

manageable, but stretching, number of key performance


indicators (including unit costs) that enable them to identify
and evaluate the cost of their outputs and be motivated to

achieve continuous improvement


Creating a business environment in which managers are
committed at all levels to improve their cost performance and
take

account

of

finance

when

taking

decisions.

The

department wants managers to be assisted in this task by a


unified finance community that provides a highly competent,
professional service.

The desired end result of these changes is a fully integrated


departmental

planning,

budgeting,

performance

management

system, with a clear line of sight between the money, the plans and
the delivery of operational and strategic priorities throughout the
business. Leadership, People, Processes, Stakeholders, and Results
five elements that need to be aligned and managed to maintain a
viable financial business.

5.1
The term financial viability refers to the short-, middle- and longterm ability of an organization to pay its bills, secure reliable and
diverse sources of income and balance income and expenses.
An organization, which continuously fulfills all these requirements, is
often in publications called financially sustainable. It has achieved
financial sustainability.

5.2

Asset

Liability

In financial accounting, assets are economic


resources. Anything tangible or intangible that
is capable of being owned or controlled to
produce value and that is held to have positive
economic value is considered an asset. Simply
stated, assets represent value of ownership that
can be converted into cash (although cash itself
is also considered an asset)
In financial accounting, a liability is defined as
an obligation of an entity arising from past
transactions or events, the settlement of which
may result in the transfer or use of assets,
provision of services or other yielding of
economic benefits in the future. A liability is
defined by the following characteristics:
Any type of borrowing from persons or banks for
improving a business or personal income that is
payable during short or long time;
A duty or responsibility to others that entails
settlement by future transfer or use of assets,

provision of services, or other transaction


yielding an economic benefit, at a specified or
determinable date, on occurrence of a specified
event, or on demand;
A duty or responsibility that obligates the entity
to another, leaving it little or no discretion to
avoid settlement; and,
A transaction or event obligating the entity
that has already occurred.

Equity

A stock or any other security


representing an ownership interest.

On a company's balance sheet,


the amount of the funds contributed by
the owners (the stockholders) plus the
retained earnings (or losses). Also
referred to as "shareholders' equity".

In the context of margin trading, the


value of securities in a margin account
minus what has been borrowed from the
brokerage.

In the context of real estate, the


difference between the current market
value of the property and the amount the
owner still owes on the mortgage. It is
the amount that the owner would receive
after selling a property and paying off the
mortgage.

Income

Expense

5. In terms of investment strategies,


equity (stocks) is one of the principal
asset classes. The other two are fixedincome (bonds) and cash/cashequivalents. These are used in asset
allocation planning to structure a desired
risk and return profile for an investor's
portfolio.
The amount of money or its equivalent received
during a period of time in exchange for labor or
services, from the sale of goods or property, or
as profit from financial investments.
In accounting, expense has a very specific
meaning. It is an outflow of cash or other
valuable assets from a person or company to
another person or company. This outflow of
cash is generally one side of a trade for
products or services that have equal or better
current or future value to the buyer than to the

seller. Technically, an expense is an event in


which an asset is used up or a liability is
incurred. In terms of the accounting equation,
expenses reduce owners' equity.
Pay as you go (PAYG) installments
PAYG installments are a system for paying
amounts towards the expected tax liability on
your business and investment income for the
financial year.

Pay as you go
(PAYG)

Goods and
services tax
(GST)

Fringe benefit
tax

Business
activity
statement
(BAS)

Pay as you go (PAYG) withholding


PAYG withholding requires an entity to withhold
an amount if it makes certain listed payments,
including salary, wages, commission, bonuses
or allowances to an employee, directors' fees,
payments for a supply (goods or services) to
another business that has not quoted an ABN,
and certain dividend, interest and royalty
payments.
GST is a broad-based tax of 10% on the sale of
most goods, services and anything else
consumed in Australia.
FBT is a tax payable by employers who provide
fringe benefits to their employees or associates
of their employees. For example, a fringe
benefit is generally provided when an employer:
Allows an employee to use a work car for
private purposes
Gives an employee a cheap loan
Pays an employee's private health
insurance costs.
Businesses registered for GST use this single
form to report their business tax entitlements
and obligations, including GST, PAYG
installments, PAYG withholding and FBT
installments. You can offset tax payable against
tax credits to arrive at a net amount. The BAS
replaces several business tax forms.

Superannuatio A prescribed minimum level of superannuation


required under the Superannuation Guarantee
n guarantee
(Administration) Act 1992 that an employer
scheme
must contribute for employees. The employer
can avoid paying the Superannuation
Guarantee Charge if sufficient superannuation
contributions are made to a complying

superannuation fund or RSA.

Work Cover

5.3

WorkCover covers most workers injured within


Australia - employed workers injured overseas
or interstate in the course of their work. It
covers all work activities including lunch breaks.
Apart from some rare exceptions, coverage is
given irrespective of who caused the injury.

Bilateral or
regional trade
agreements

Bilateral Trade Agreements are between on two


nations at a time. They are fairly easy to
negotiate, and give those two nations favored
trading status between each other.

International
Commercial
Terms
(INCOTERMS)

The Incoterms rules or


International
Commercial terms are a series of pre-defined
commercial
terms
published
by
the
International Chamber of Commerce (ICC)
widely used in international commercial
transactions. A series of three-letter trade terms
related to common sales practices, the
Incoterms rules are intended primarily to clearly
communicate the tasks, costs and risks
associated with the transportation and delivery
of goods. The Incoterms rules are accepted by
governments, legal authorities and practitioners
worldwide for the interpretation of most
commonly used terms in international trade.
They are intended to reduce or remove
altogether uncertainties arising from different
interpretation of the rules in different countries.
First published in 1936, the Incoterms rules
have been periodically updated, with the eighth
versionIncoterms
2010having
been
published on January 1, 2011. "Incoterms" is a
registered trademark of the ICC.

Trade
Practices Act

The Competition and Consumer Act 2010 is


an act of the Parliament of Australia. On 1
January 2011 the Competition and Consumer
Act 2010 replaced the Trade Practices Act 1974.
The act provides for protection of consumers
and prevents some restrictive trade practices of
companies. It is the key competition law in
Australia. It is administered by the Australian
Competition and Consumer Commission and
also gives some rights for private action.
The Warsaw Convention is an international
convention, which regulates liability for
international carriage of persons, luggage or
goods performed by aircraft for reward.

Warsaw
Convention

Originally signed in 1929 in Warsaw (hence the


name), it was amended in 1955 at The Hague
and in 1971 in Guatemala City.

World Trade
Organization
determination
s
Australian
Accounting
Standard

The Australian Accounting Standards Board


(AASB) is an independent accounting standardsetter based in Melbourne, Australia.
The Board comprises 14 members including the

Board (AASB)

Chairman. The Chairman is appointed by


the Minister for Superannuation and Corporate
Law and
members,
from
a
variety
of
backgrounds, are appointed by the Financial
Reporting Council (FRC).
The AASB is committed to developing, in the
public interest, a single set of high quality,
understandable accounting standards that
require transparent and comparable information
in general purpose financial statements.