1. in 200 words Summarise the information found in this note. 2. Earnings management: Explain what earnings...
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1. in 200 words Summarise the information found in this note.
2. Earnings management: Explain what earnings management is. During an economic crisis, how might management try to manage earnings? Is it ethical for a company to manage their earnings?
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B1. Receivables 2018 SM 2019 SM Measured at amortised cost Current Trade receivables 140.6 1190 Allowance for expected credit losses (17.0) (13.5) 123.6 105.5 Prepayments 17.8 149 Accrued revenue 20.1 20.4 Other receivables 7.5 5.7 1690 1465 Non-current Other receivables and prepayments 5.0 3.9 5.0 3.9 Ageing of trade receivables Current 82.5 62.9 30-60 days 22.9 144 60-90 days 6.5 109 90 days + 28.7 30.8 140.6 1190 Movement in allowance for expected credit losses Balance at beginning of year 13.5 13.6 Impact of AASB 9 Provision for the year 1.7 5.5 3.7 Amounts written off during the year as uncollectable (3.7) (3.8) 17.0 13.5 Trade and other receivables are initially recognised at fair value and subsequently are carried at amortised cost, using the effective interest rate method, less an allowance for expected credit losses (allowance for doubtful debts). No interest is charged on trade receivables. The Group's policy requires customers to pay the Group in accordance with agreed payment terms. All credit and recovery risk associated with trade receivables has been provided for in the consolidated statement of financial position. Trade receivables have been aged according to their original due date in the above ageing analysis. The Group applies a simplified approach in calculating expected credit losses using a provision matrix based on its historical credit loss experience and adjusting for any known forward looking specific to the debtors and the economic environment. Further discussion of the credit risk associated with trade receivables is included in Note C4. B1. Receivables 2018 SM 2019 SM Measured at amortised cost Current Trade receivables 140.6 1190 Allowance for expected credit losses (17.0) (13.5) 123.6 105.5 Prepayments 17.8 149 Accrued revenue 20.1 20.4 Other receivables 7.5 5.7 1690 1465 Non-current Other receivables and prepayments 5.0 3.9 5.0 3.9 Ageing of trade receivables Current 82.5 62.9 30-60 days 22.9 144 60-90 days 6.5 109 90 days + 28.7 30.8 140.6 1190 Movement in allowance for expected credit losses Balance at beginning of year 13.5 13.6 Impact of AASB 9 Provision for the year 1.7 5.5 3.7 Amounts written off during the year as uncollectable (3.7) (3.8) 17.0 13.5 Trade and other receivables are initially recognised at fair value and subsequently are carried at amortised cost, using the effective interest rate method, less an allowance for expected credit losses (allowance for doubtful debts). No interest is charged on trade receivables. The Group's policy requires customers to pay the Group in accordance with agreed payment terms. All credit and recovery risk associated with trade receivables has been provided for in the consolidated statement of financial position. Trade receivables have been aged according to their original due date in the above ageing analysis. The Group applies a simplified approach in calculating expected credit losses using a provision matrix based on its historical credit loss experience and adjusting for any known forward looking specific to the debtors and the economic environment. Further discussion of the credit risk associated with trade receivables is included in Note C4.
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Earnings management is a strategy used by the management of a company to deliberately manipulate the companys earnings so that the figures match a pre... View the full answer
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Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
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