Develop a Sound Understanding of the Accounting Approaches Applied to Company Formation - Accounting Assignment Help

Assignment Task :

Objectives The aim of this assessment task is to demonstrate your understanding of the consolidated corporate structure, including the form, nature and content of group accounts and accounting for impairment of assets. In this business report assignment you will be required to choose a company from a given list and discuss the nature of the company’s activities and conduct a study into various stated aspects of the company’s financial statements. This assessment item relates to the subject and course learning outcomes: 

This assessment item relates to the subject and course learning outcomes: 

SLO1. Develop a sound understanding of the accounting approaches applied to company formation. 

SLO 2. Appreciate the impact of consolidated accounting on the economic entity, and the various accounting adjustments required to portray this relationship. 

SLO 3. Understand how to apply impairment testing on the valuation of certain types of assets. 

K1. Critically analyse complex accounting-related knowledge and practice from both historical and contemporary perspectives 

S1. Research and apply established concepts to solve business and professional practice problems 

1 Company financial statement analysis: 

You are required to access the most recent annual report of one of the following companies listed on the Australian Stock Exchange (Annual reports are available via the JCU Library Database ‘DatAnalysis’. They are also available on the company website.): 

• Virgin Australia Group Ltd 

• Woolworths Group Ltd 

• JB HiFi Ltd 

• Myer Ltd 

Please note that reports that relate to companies other than the above, or years earlier than the most recent financial year, will not be marked and will receive a Zero grade. 

You are an experienced accountant working for a newly formed publically listed company, Five Star Ltd. You are required to apply the Australian Accounting Standards equivalents of the international accounting standards. The management of Five Star Ltd seeks your advice in relation to the application of AASB 136 Impairment of Assets. 

Required 

A. Write a report to management, specifically explaining: 

1. the purpose of the impairment test for assets

2. when to undertake an impairment test

3. how the existence of goodwill will affect the impairment test

4. the basic steps to be followed in applying the impairment test for (a) individual assets and (b) cash generating units

5. How to account for reversals of Impairment losses. 

B. Management has also requested that you explain, by example, how other companies are applying AASB 136. So further to the above you are also required to consider the financial statements of a reporting entity (from the list above) and indicate to management the effect of impairment testing on these 2 financial statements. In doing this you need to indicate to management in an appendix to the report in A above, various aspects of the Annual report from the company selected: 

1. The measurement basis for assets

2. What are the company’s assets, including Property, plant and equipment and intangible assets? Do they have goodwill?

3. Have any assets been impaired? Is there an explanation for this?

4. Has any reversal of impairment losses occurred?

5. What is the effect of asset impairment/reversals of asset impairment on the balance sheet and the income statement? (You will need to look at relevant notes to the accounts.) 

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