The different accounting policies are chosen by Coles(2020) and the Ampol (Caltex Australian)(2020) are reported and analysed. The accounting policies cover the following items: 1) AASB 116 Property, Plant and Equipment; 2) AASB 138 Intangible Assets; 3) AASB 136 Impairment of Assets and CGUs, and 4)

AASB 137 Provision, Contingent Assets, and Contingent Liabilities. Please read these accounting standards taking particular note of the required disclosures.

You should do the following for each of your companies for each of the above accounting standards:

1. Summarise disclosures requirements in each accounting standard in your own words. Read through the paragraphs for disclosures carefully first before summarising it. Don’t copy and paste the paragraphs.
2. Compare the required disclosures in the standard and the disclosed information in the annual reports. Match the disclosures from the annual reports with the disclosure requirement. Use a table to clearly show the wording from the annual report and the relevant part of the standard.
3. Describe any inconsistencies between the disclosures in the annual reports and what is specified in the standard (Hint: you can search the annual report for key words such as plant, AASB 116 etc.]
4. Compare of the disclosures between the two allocated companies using the identified disclosures in part b). Describe the similarities and differences in how the accounting policies are applied and explain the causes that could possibly lead to the differences and similarities.

[Hint: the basic requirements for the assessment is summarising the disclosure requirements from the standards and describing how each company applied the standard. A higher grade is rewarded for detailed investigation of the disclosure section in the accounting standards and how well you communicate this in your own words for similarities and differences.]

1. Accounting policies of property, plant and equipment

Read the disclosure section carefully in AASB 116 and report what your allocated companies disclosed about their property, plant and equipment. Consider the measurement bases applied, depreciation methods used, estimation of useful life or depreciate rate, the movement of carrying amounts of PPE, cost model or revaluation model, and treatments of revaluation, etc. Please note, the disclosure of impairment and CGU should be reported in section 2.3.

2. Accounting policies of intangibles

Read the disclosure section carefully in AASB 138 and report what your allocated companies disclosed about their different classes of intangible assets. Consider the accounting treatment for each class of intangible assets, the estimation of amortisation of intangible assets, the movements of carrying amounts of intangible assets, the different models applied for measurement, and accounting treatment for research and development, etc.

3. Accounting policies of impairment and CGUs

Read the disclosure section carefully in AASB 136 and report what your allocated companies disclosed about impairments and CGUs. Consider the recognition of impairment losses, reversal of impairment losses, effects on profit & loss and other comprehensive income (OCI), existence of CGUs, reasons to use CGUs, determinants of recoverable amounts (RAs), and existence of goodwill and related impairment, etc.

4. Accounting policies of provision, contingent assets and contingent liabilities

Read the disclosure section carefully in AASB 137 and report what your allocated companies disclosed about their provisions and contingent assets and liabilities. Consider the justification for provisions, identification of the uncertainty in provisions, the movements of carrying amounts of provisions, nature of contingent liabilities and contingent assets, and treatments for un-disclosed contingencies.

1. Disclosure of leases

This component of the assessment task requires you to research the old leases Standard AASB 117 and compare it to the new Standard AASB 16. AASB 117 can be downloaded from website as follows: https://www.aasb.gov.au/admin/file/content105/c9/AASB117_08- 15.pdf

1. Standard applied

Have your allocated companies adopted the new AASB 16 or are they still using the old AASB 117? If they have used AASB 117 for the 2019 reports, when are they expecting to adopt AASB 16? If they haven’t adopted AASB 16 yet, what is their strategy for adopting AASB 16?

2. AASB 16 and AASB 117

Explain the differences in accounting treatments between AASB 16 and AASB 117.

3. “Right-of-use” method

Justify the “right-of-use” method applied in AASB 16 according to the revised Conceptual Framework for Financial Reporting.

Answer rating: 100% (QA)

This new standard has replaced AASB 117 Leases Interpretation 4 Determining whether an Arrangement contains a Lease Interpretation 115 Operating LeasesIncentives and Interpretation 127 Evaluating the ... View the full answer