Accounting Treatment of British American Tobacco Ltd

Accounting Treatment of British American Tobacco Ltd

  • Submitted By: EssayMaster
  • Date Submitted: 09/02/2008 1:12 AM
  • Category: Business
  • Words: 668
  • Page: 3
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Tutorial 2: Accounting Treatment of British American Tobacco Ltd

Case Study:
British American Tobacco Ltd


Based on a case study, this report highlights the nature and circumstances surrounding British American Tobacco Ltd (BAT Ltd); a company whose business is believed to engage in the production and global export of quality tobacco.

As the name suggest, and pursuant to section 148(2) of the Corporations Act, BAT Ltd is a public company limited by shares and is thus referred to as a limited company.

It is likely BAT Ltd would be listed on the Australian Stock Exchange (ASX) and its structure is likely to consist of two main organs; the separate legal entity that is the artificial company itself and the general meeting of its shareholders (members), all of whom share common information needs concerning the allocation of resources. BAT Ltd is also likely to comprise of a management team appointed by the board of directors responsible for the day-today operations. This creates a separation of management from the economic interest of the company.

Accordingly, having inherited the characteristics of a reporting entity as mentioned above and further outlined in the Statement of Accounting Concept 1(SAC1), BAT Ltd would be required, pursuant to section 314 of the Corporations Act, to produce general purpose financial reports (GPFR).

In sum, BAT Ltd is a limited company listed on the ASX and holds investor and community interest but whose economic interest is separate from its management. Therefore, BAT Ltd is a reporting entity governed by a number of regulatory frameworks including, but not limited to, the Corporations Act, ASX Listing Rules and AASB Standards, all of which incorporate the ethical standards requirement expected of the industry.


It is said that during the spring month of 2002, BAT Ltd was involved in a lawsuit which was brought against the company by the plaintiff, Ms McCabe, who had accused BAT Ltd of...

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