Describe what you understand by the accounting concepts

Assignment Help Financial Accounting

Reference no: EM131099015 , Length: word count:2000

Under the IFRSs regime, assets cannot be booked at more than their recoverable amount.

That is, at more than the greater of their net realizable value and the net present value of their future income streams. This entails estimating the future income streams from using an asset separately, or as part of a cash generating unit (CGU) discounting the estimated net income stream with an estimated appropriate discount factor, comparing it with the asset's selling price or the aggregate of the selling prices of the assets comprising CGU - asset' net selling price to determine the recoverable amount and comparing the latter with the book value to determine any estimated impairment in book value. Most assets will be booked at their ‘cost less depreciation'. In that exercise, only the current selling price of the asset (or of the CGU assets) is likely to exist. Assets' lives are estimates. Their separate or the CGU's future net income streams area both estimates, and the discount factor is an estimate. As such, an asset's selling price is the only item capable of independent corroboration (Clarke and Dean, 2007, p.111).

Clark, F., & Dean, G. (2007). Indecent Disclosure: Gilding the Corporate Lily. Cambridge University Press. Melbourne.

Instructions:

Download a 2015 annual report for a listed company from the Australian Securities Exchange (ASX) website. Groups are not allowed to do the same company and should discuss their selection with their tutor prior to commencing their research assignment (Banks are not allowed as they have particular reporting requirements).

Refer to the marking guide (attached) for additional information and requirements. Required:

1. With reference to the above statement describe what you understand by the accounting concepts mentioned and provide examples from your selected annual report.

2. Discuss the problems of measurement in the context of the present AASB / IASB standards and conceptual framework using your selected annual report to provide examples.

3. Comment on the relevance and representational faithfulness of using ‘processes' of measurement to achieve estimates. Provide examples from your selected annual report.

INFORMATION

The following matters should be given particular attention:

1. Your assignment must be submitted no later than the Friday ending week 10. Assessment tasks submitted after the due date, without prior approval/arrangement, will be penalised at 10% of the available marks per day. Requests for extension of time must be made with the lecturer concerned and based on Special Consideration guidelines.

2. In your assignment use a 12-pt Times New Roman font, use 2 cm margins on all four sides of your page.

3. Evidence of extensive research beyond the prescribed text is required. Ensure these are referenced appropriately. Refer to the statement regarding plagiarism.

4. This assignment must be handed in for successful completion of the course and will count 25 marks towards the final mark.

5. Marks have been allocated to each specific section of your assignment.

6. The assignment is to be conducted in groups of two. Students do not have the option to extend or reduce the size of the group.

7. All assignments are to be uploaded to Moodle. Should you need assistance, please use the available resources and support through the drop-down menus in Moodle or speak to your lecturer/tutor.

Reference no: EM131099015

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