Ltt Aquaculture Essay
1. Describe the nature of the business of LTT Aquaculture SdnBhd..
The nature of business for LTT Aquaculture SdnBhd is rearing fresh water fish.
2. Identify 6 resources of the business considered as assets from an accounting point of view. Explain why these resources are considered as assets of the business.
a) Empurau fish (1.5kg and above) - This is considered as current asset as they are selling this to generate profit
b) Brood stock (8 kg) - This is considered as non-current asset as it helps to generate more resources
c) Farm - This is considered as property, plant & equipment
d) Special effect concrete pond system - This is …show more content…
The potential buyers have shown their interest in buying the empuraus and export it to Taiwan. Currently, they are still at the preliminary stage where they are stating their intention to export empuraus and there is no transaction yet being done by both parties. Thus, during this preliminary stage, the export potential can be considered as an anticipated asset of the business. The export potential can be considered as an asset once the discussion has been finalised and a transaction has been done based on the agreement made by both parties.
As there is also an offer of a joint venture, the Taiwanese will be considered as a potential investor to the LTT Aquaculture Sdn Bhd. Investors are normally worried about the risks that they are going to faced and the returns they will get from the companies they invested in. They will need accounting information that will help them to make decision whether or not to invest. Among of the accounting information needed are:
(i) The pool of resources currently that the company has and whether it is sufficient to cover the companies operation. The investors will also want to know how the pool of resources will generates more resources or returns for the company.
(ii) The investors will want to see the cash inflow and outflow of the business in