Advanced Financed Accounting

Component – 1
Topic 1-Collect the data of particular head office which is having
minimum three branches and present in branch accounting format.

Domino’s Pizza is an American multinational pizza restaurant chain,

known for its pizza delivery and carryout services. Founded in 1960 by
Tom Monaghan and his brother James, the company initially started as a
small pizzeria in Ypsilanti, Michigan. It has since grown into one of the
largest pizza chains in the world, with thousands of locations across the
globe.
Balance B/d: Opening balance of the Balance B/d: Opening balance of
the branch account (e.g., cash on hand, inventory value, and outstanding
customer balances).
Stock: Value of inventory at the beginning of the accounting period (e.g.,
dough, cheese, toppings, packaging).
Debtors: Amount owed to the branch by customers who purchased on
credit.
Goods Received from HO: Value of goods received from the head office
(e.g., supplies, ingredients).
Bank A/c: Cash deposited in the branch’s bank account.
Salaries and Wages: Expenses incurred for employee salaries and wages,
including delivery drivers.
Rent: Rent paid for the branch premises.
Utilities: Expenses for electricity, water, and other utilities.
Marketing & Advertising: Expenses incurred for marketing and
advertising campaigns.
Delivery Expenses: Expenses related to delivery operations, such as fuel
costs and driver wages.
Maintenance & Repairs: Expenses for maintenance and repairs of
equipment.
Sundry Expenses: Other miscellaneous expenses incurred by the branch.
Profit & Loss A/c: Transfer of profit or loss to the head office’s profit and
loss account.
Dine-in Sales: Revenue generated from customers dining in at the
restaurant (if applicable).
Takeaway Sales: Revenue generated from takeaway orders.
Delivery Sales: Revenue generated from delivery orders.
Online Orders: Revenue generated from online orders placed through the
Domino’s website or app.
Collection from Debtors: Cash received from customers who had
purchased on credit.
Goods Returned to HO: Value of goods returned to the head office from
the branch.
Balance C/d: Closing balance of the branch account (e.g., cash on hand,
inventory value, and outstanding customer balances).branch account (e.g.,
cash on hand, inventory value, and outstanding customer balances).
Stock: Value of inventory at the beginning of the accounting period (e.g.,
dough, cheese, toppings, packaging).
Debtors: Amount owed to the branch by customers who purchased on
credit.
Goods Received from HO: Value of goods received from the head office
(e.g., supplies, ingredients).
Bank A/c: Cash deposited in the branch’s bank account.
Salaries and Wages: Expenses incurred for employee salaries and wages,
including delivery drivers.
Rent: Rent paid for the branch premises.
Utilities: Expenses for electricity, water, and other utilities.
Marketing & Advertising: Expenses incurred for marketing and
advertising campaigns.
Delivery Expenses: Expenses related to delivery operations, such as fuel
costs and driver wages.
Maintenance & Repairs: Expenses for maintenance and repairs of
equipment.
Sundry Expenses: Other miscellaneous expenses incurred by the branch.
Profit & Loss A/c: Transfer of profit or loss to the head office’s profit and
loss account.
Dine-in Sales: Revenue generated from customers dining in at the
restaurant (if applicable).
Takeaway Sales: Revenue generated from takeaway orders.
 Delivery Sales: Revenue generated from delivery orders.
Online Orders: Revenue generated from online orders placed through the
Domino’s website or app.
Collection from Debtors: Cash received from customers who had
purchased on credit.
Goods Returned to HO: Value of goods returned to the head office from
the branch.
Balance C/d: Closing balance of the branch account (e.g., cash on hand,
inventory value, and outstanding customer balances).

Topic – 2. Design a step by step of fire insurance companies follows it’s

operational activities to give the compensation when a particular incident
happened.

ICICI Lombard General Insurance is a leading provider of insurance services in

India, offering a wide range of products, including fire insurance. The process
for handling claims and providing compensation in the event of a fire incident
typically follows a structured series of operational activities. Below is a step-by-
step guide to how fire insurance companies like ICICI Lombard handle claims
and compensation following a fire incident:

Step 1: Policy Purchase and Coverage Understanding

Client Action: The customer buys a fire insurance policy from ICICI Lombard,
either online or offline.
Coverage: The policyholder reviews and understands the coverage offered,
including buildings, machinery, stock, and other assets. The policy will specify
exclusions and terms under which claims are accepted.
Step 2: Intimation of Loss (Claim Filing)
Client Action: After a fire incident occurs, the policyholder immediately notifies
ICICI Lombard of the loss. The notification can be made through multiple
channels:
Phone (toll-free helpline)
Website or mobile app
Email or customer support
Authorized agent or broker
Timeline: Insurance companies typically require the loss to be reported within a
specified period (e.g., 24 hours or within 7 days, depending on policy terms).
Step 3: Claim Acknowledgment
ICICI Lombard Action: Upon receiving the claim notification, ICICI Lombard
acknowledges receipt of the claim and assigns a claim number to track the
process.
Communication: The insurer communicates the next steps to the policyholder
and requests any necessary documentation or additional information.
Step 4: Investigation and Documentation Collection
Client Action: The policyholder provides relevant documents such as:
Proof of ownership of damaged property (e.g., invoices, receipts)
Fire department report (if applicable)
Photographs of the damaged property
Witness statements or affidavits (if needed)
Any other supporting documents, such as repair estimates or salvage
information
ICICI Lombard Action: The insurer may assign an adjuster or surveyor to
investigate the damage. This involves:
Visiting the site of the fire damage
Verifying the extent of the loss
Determining whether the fire loss falls within the coverage terms and conditions
Investigating the cause of the fire, ensuring it’s not due to any policy exclusions
(e.g., arson or negligence)
Step 5: Assessment and Verification
ICICI Lombard Action: The insurance adjuster assesses the value of the
damage, including:
The cost of repairing or replacing the damaged property
Any loss of income (for business interruption claims, if covered)
Depreciation of assets, if applicable
Reviewing the policy limits and deductibles
Verification: The insurer checks the authenticity of the claim and verifies the
documents submitted.
Step 6: Claim Approval or Rejection
ICICI Lombard Action: After completing the investigation and verification, the
insurer will make a decision:
Approval: If the claim meets all the policy terms and conditions, ICICI
Lombard will approve the compensation.
Rejection: If the fire damage is due to an exclusion or other reasons, the claim
may be rejected or partially settled.
Notification: ICICI Lombard communicates the decision to the policyholder in
writing, along with the compensation amount (if applicable) and the reasons for
rejection (if any).
Step 7: Claim Settlement
ICICI Lombard Action: If the claim is approved, the insurer calculates the
compensation amount based on:
The sum insured (policy coverage limit)
The depreciation of assets (if applicable)
Deductibles or excess
Any additional costs covered by the policy (e.g., firefighting expenses,
temporary accommodation, business interruption)
Payment: The insurer processes the payment, which could be a lump sum or in
installments, depending on the policy and the extent of damage.
Disbursement: The amount is transferred to the policyholder’s bank account or
paid as per the policy terms.
Step 8: Claim Closure
ICICI Lombard Action: After the payment is made and all documentation is
finalized, the claim is closed.
Final Communication: ICICI Lombard sends a closure letter or email to the
policyholder, confirming the settlement and explaining the final compensation
details.
Step 9: Customer Feedback and Service
Client Action: The policyholder may provide feedback regarding the claims
process, which can help ICICI Lombard improve its services.

Topic - 3. Describe the formalities of purchasing company when it’s acquire the
business of Vendor company.

When a company (the “purchasing company”) acquires the business of a vendor

company (the “vendor company”), several formalities and procedures need to
be followed to ensure a legal, financial, and operational transfer of assets and
liabilities. Below is a description of the typical formalities involved in the
acquisition process:

1. Initial Agreement and Due Diligence

Agreement of Intent (Letter of Intent or LOI): The purchasing company and the
vendor company may first sign a Letter of Intent (LOI) or Memorandum of
Understanding (MOU) that outlines the broad terms of the acquisition,
including the purchase price, scope of the business to be acquired, and any
special conditions.
Due Diligence: The purchasing company conducts a thorough due diligence
process. This involves reviewing the vendor company’s financial records,
contracts, intellectual property, assets, liabilities, legal compliance, employees,
and other operational aspects. The purpose of this process is to verify the value
of the business and uncover any potential risks or liabilities that might affect the
deal.

2. Valuation and Negotiation

Business Valuation: Based on the due diligence findings, the purchasing
company will determine the fair value of the vendor company. This might
involve financial analysis, comparison with market standards, and expert
valuations of assets (like real estate, equipment, or intellectual property).
Negotiation of Terms: Both parties negotiate the final terms of the transaction,
including the purchase price, payment terms (e.g., lump sum, installments, or
stock-for-cash deals), and any contingencies (such as performance targets or
earn-outs).
3. Signing the Acquisition Agreement
Acquisition Agreement: Once all terms are agreed upon, the purchasing
company and the vendor company will draft and sign a formal acquisition
agreement. This legally binding contract outlines the specific details of the
acquisition, including:
Purchase price and payment structure
Assets and liabilities being transferred
Any conditions for the completion of the transaction (e.g., regulatory approvals,
third-party consents)
Terms related to employee transfers, if applicable
Non-compete clauses or confidentiality agreements
Warranties and representations made by both parties
4. Regulatory Approvals
Competition Law/Antitrust Approval: Depending on the size and nature of the
acquisition, the purchasing company may need to seek approval from
competition authorities or antitrust regulators to ensure that the acquisition does
not create a monopoly or significantly reduce competition in the market.
Industry-Specific Approvals: In some industries (such as banking, insurance,
telecommunications), the transaction may need to be approved by specific
regulatory bodies.
Shareholder Approval: If the purchasing company is publicly traded, its
shareholders may need to approve the acquisition through a general meeting.
5. Asset Transfer and Legal Formalities
Transfer of Assets and Liabilities: The formal transfer of the business assets,
including tangible assets (real estate, machinery, inventory) and intangible
assets (brand name, patents, contracts), occurs according to the terms outlined in
the acquisition agreement. The liabilities (e.g., debts, obligations) may also
transfer to the purchasing company, depending on the structure of the deal (asset
purchase vs. Share purchase).

Legal Documentation: All necessary legal documentation for the transfer of

assets is prepared, such as deeds of transfer, intellectual property assignments,
and other contractual amendments.
Notifying Third Parties: The purchasing company notifies relevant third parties
of the change in ownership, including suppliers, customers, creditors, and
service providers. This is important for maintaining continuity in business
relationships.
6. Employee and HR Matters
Employee Transfer: If the acquisition involves the transfer of employees, the
purchasing company must follow employment laws regarding employee rights,
benefits, and continuity of service. This may include offering employment
contracts, ensuring benefits are transferred, or negotiating new terms.
Pension and Benefit Plans: The handling of pension schemes, employee stock
options, and other benefits must be negotiated and managed according to legal
and regulatory requirements.
7. Payment and Financial Transactions
Payment: The purchasing company makes the agreed-upon payment (as
specified in the acquisition agreement), which may be done in cash, shares, or a
combination of both. Financial Adjustments: Any adjustments to the purchase
price based on working capital, debt, or other factors are finalized.
8. Post-Acquisition Integration
Integration Planning: After the acquisition, the purchasing company begins the
process of integrating the vendor company into its operations. This may involve
aligning business practices, systems, processes, and cultures.
Branding and Marketing: If necessary, the purchasing company will rebrand or
integrate the vendor company’s products or services into its existing brand
portfolio.
Managing Customer and Supplier Relations: The purchasing company works to
manage customer and supplier relationships to ensure continuity and address
any concerns arising from the change in ownership.
9. Post-Acquisition Compliance and Reporting
Compliance with Regulations: The purchasing company ensures that all
regulatory and legal requirements are met following the acquisition, including
updated filings with corporate registries, tax authorities, and industry
regulators.Ongoing Reporting: The purchasing company may need to report the
details of the acquisition in its financial statements or to relevant stakeholders
(investors, government bodies, etc.).
10.Closing the Transaction
inalizing the Transaction: Once all legal and regulatory requirements are met,
and the transfer of assets and payment has been completed, the transaction is
officially closed.