Choose a company that is listed on the Australian Stock Exchange (ASX). Find an annual report for the 2014/2015 or 2015/2016 financial year. Remember to use a complete annual report, not a concise financial report or a half-year financial report. 

You must reserve your company by adding a post on 'Discussion Board' under 'Reserve a company here'. Write the name and code of the chosen company in the description line of your post. If you add the company name in the message and NOT in the description line, then the reservation is void because it will not be readily visible to others.

Instructions for the report 

This task requires you to prepare a report to evaluate and comment on information regarding provisions, contingent liabilities and contingent assets provided in the annual report of a company listed on the Australian Stock Exchange (ASX). Your comments or evaluation should comply with the requirements of relevant Australian accounting standards (AASBs). In 2010 the BP oil spill in the Mexican gulf caused nature disasters which have affected the lives of many species and the environment. Watch the video clips assessed from BBC site: http://www.bbc.co.uk/news/special_reports/oil_disaster 

You can find whether a liability exists for BP as the result of oil spill and how this obligation should be presented to financial statements' users in the annual report. You can find BP 2011 annual report from the website: http://www.bp.com/en/global/corporate/investors/results-and-reporting/annual-report/annual-reporting-archive.html 

In the report, you should address the points outlined below:

1) Discuss the recognition criteria of provisions and contingent liabilities or contingent assets presented in the financial statements of the chosen company.

2) Identify the differences between contingent liability and provision.

3) Identify at least one example of a provision and a contingent liability/asset reported in the financial statements of the chosen company and discuss.

4) Discuss the measurement and valuation of provisions and contingent liabilities or contingent assets employed by the chosen company.

5) Using the examples you discussed in part 3), explore the implications of the provision and contingent liability or contingent asset for future year's financial statements.

Assessment criteria: The quality of the report will be assessed based on the following four areas:

1) Demonstrate and identify the accounting concepts applied.

2) Use paragraphs from related Australian Accounting Standard as guidelines to support your discussion.

3) Provide example(s) from the annual report to illustrate the implementation of an accounting concept(s) or principle(s) discussed.

4) Demonstrate effective communication, referencing, logical presentation and integrated evaluation.

1750 words

5 Harvard references.