Recent Question/Assignment

Objective of the report -1000 words due 20 september 2019
The objective of this report is to understand the measurement of assets and liabilities according to relevant accounting standards in Australian business practices.
Your discussion should be aligned with the Australian Conceptual Framework and other relevant AASBs to support your comments. An entity needs to determine the valuation and measurement of assets and liabilities in order to provide more relevant and reliable information for users to understand its business practices.
However, the valuation and measurement of assets and liabilities requires professional judgements to be made concerning the nature and extent of uncertainty and estimations. Accounting to paragraph 86 of the Conceptual Framework, Reliability of Measurement requires that
“The second criterion for the recognition of an item is that it possesses a cost or value that can be measured with reliability. In many cases, cost or value must be estimated. The use of reasonable estimates is an essential part of the preparation of financial statements and does not undermine their reliability.”
In addition, paragraph 99 of the Conceptual Framework identifies that “Measurement is the process of determining the monetary amounts at which the elements of the financial statements are to be recognised and carried in the balance sheet and income statement.” In this report, you are required to select a 2017/2018 or 2018/2019 annual report of an Australian company listed in the ASX (Australian Stock Exchange).
You should provide your comments on the following questions: 4
1) Explain why the measurement of assets and liabilities is crucial to the chosen company. (6 marks)
2) Identify the essential measurement (including initial measurement or subsequent measurement) of assets or liabilities adopted by the chosen company, such as inventories, PPE (Property, Plant, and Equipment), intangible assets, leased assets, investment, financial assets, financial liabilities, provisions, employee benefit or revenue received in advance. You should comment on at least two assets and two liabilities. Provide your explanation. (8 marks)
3) In your opinion, assess whether the measurement of assets and liabilities adopted by the chosen company (that are addressed in item 2) are relevant to its business practices or meet the qualitative characteristics set by the AASB Conceptual Framework and relevant AASBs. (12 marks)
The report should demonstrate effective communication, logical presentation, appropriate referencing and integrated evaluation. (4 marks)
You can find the paragraphs of Australian Conceptual Framework and a list of AASBs that are useful to support your discussion in this report, which are available from the AASB website: http://www.aasb.gov.au/Pronouncements/Conceptual-framework.aspx and http://www.aasb.gov.au/Pronouncements/Current-standards.aspx. In particular, you may refer to the following or other AASBs in your report.
• AASB Conceptual Framework: Framework for the Presentation and Preparation of Financial Statements • AASB 3 Business Combinations • AASB 9 Financial Instruments • AASB 13 Fair Value Measurement • AASB 15 Revenue from Contracts with Customers • AASB 16 Leases • AASB 101 Presentation of Financial Statements • AASB 102 Inventories 5 • AASB 116 Property, Plant and Equipment • AASB 119 Employee Benefits • AASB 137 Provisions, Contingent Liabilities and Contingent Assets • AASB 138 Intangible Assets You may find other references are useful as well, for example: Measurement Bases for Financial Accounting – Measurement on Initial Recognition, Prepared by staff of the Canadian Accounting Standards Board, 19 May 2006, (source: https://www.aasb.gov.au/admin/file/content105/c9/IASB_Canadian_MM_paper.pdf) Assessment criteria:
The quality of the report will be assessed based on the following four areas: 1) Demonstrate and identify the measurement of assets and liabilities applied. 2) Use paragraphs from related Australian Accounting Standards as guidelines to support your discussion. 3) Provide evidence from the annual report or other sources to illustrate the concept(s) or principle(s) discussed. 4) Demonstrate effective communication, referencing, logical presentation and integrated evaluation.

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