Reference no: EM132895093

Question - AASB 16 was released in February 2016 and is applicable to annual reporting periods beginning on or after 1 January 2019. Assume that an investor from Japan had approached you at Deloitte Limited seeking advice on the effects of AASB16 on Air New Zealand Limited and Qantas Limited financial statements for the period 2018/2019 if these firms adopt the new leasing standard. You are to assume that all aspects of the financial statement will be same as 2017/2018 except the effect of the AASB 16.

Deloitte is Auditors for Air New Zealand Limited and KPMG is Auditors Qantas for the financial year 2018/2019. You are required to take the role of business advisor/Analyst for the purpose of providing a detailed report based on the following specific questions relating to AASB 16 that the investor is seeking a report for.

As an advisor/Analyst at Deloitte, make a report addressing the following questions that the investor has asked your firm for advice:

How have these two companies reported their environmental and social aspects such as energy use and efficiency, carbon emissions, etc.? Is there any regulatory requirement for such reporting? If so, summarise the requirements and discuss what they have reported. If there is no regulatory requirement, is there any evidence that these companies have reported/disclosed any environments and social information? If so, summarise how and what is reported/disclosed.

Evaluate whether, overall, AASB 16 would result in reporting that would be more useful to users of these companies' financial statements.

Summarise your discussion for the investor who is from a non-accounting background.

Note: Make sure your consider the relevant specific technical and theoretical issues relating to AASB 16 for your investor's perspective. You are also required to consider the theoretical implication of accounting information produced from the perspective of your investor.