Financial Accounting and Reporting Assessment -
Unit Learning Outcomes covered in this assessment - The purpose of this assignment is to assess the following Learning Outcomes:
a. Describe and discuss the function and role of high quality financial accounting in the contemporary business environment.
b. Describe and discuss the application and basis of selected IFRSs set by the IASB.
c. Apply IFRSs including the framework in the preparation of general purpose financial statements.
d. Apply financial analytical skills to evaluate, explain and solve financial accounting problems relating to general purpose financial statements.
e. Design and develop an entity's accounting system to maintain financial information and facilitate the preparation of general purpose financial statements.
f. Compare, contrast and review financial accounting systems to ensure efficient and reliable financial accounting information.
g. Evaluate and appraise stock exchange listed entity's financial statements. Develop and communicate solutions to ethical issues orally and in writing.
Assignment Description -
Report - The Nikita Ltd which is a public company required to prepare general purpose financial reports, operates in a very competitive field, has been using historical cost in reporting their assets in the statement of financial position. The board of the company instructed the finance manager to use the fair value basis for the measurement of its non-financial assets (Property, plant & equipment). Some of those assets are very valuable and have in fact increased in value over the current period. In pursuing the board's decision CEO is arguing that, as there has been no decline in fair value during the current reporting period, no depreciation should be charged on company assets as done in the past.
Required: Assume you are the finance manager of the Nikita Ltd and write a report to the CEO.
Choose one of the company from the table listed below, access the Annual report of the selected company for the financial year 2017, and write a report incorporating the followings (1to7) while reviewing the selected annual report's financial statements and notes to cite examples in order to strengthen your arguments.
Report should incorporate the following sections.
- Cover page
- Table of contents
- Executive summary
- Introduction
1. Explain the nature of general purpose financial reports (GPFR) in the context of the AASB's current SAC 1 Definition of the Reporting Entity.
2. Describe what assets constitute property, plant and equipment (PPE), and what the recognition criteria are for PPE.
3. Outline and explain the requirements of AASB 116 in relation to:
(a) The acquisition of property, plant and equipment;
(b) The measurement of property, plant and equipment subsequent to acquisition.
4. What is meant by depreciation expense, and explain whether all assets are subject to depreciation?
5. How is useful life determined, and what is meant by residual value of an asset?
6. What is fair value? Discuss whether AASB 116 set fair value as the ceiling for the carrying amount of assets and the impact of AASB 112 tax effect accounting on assets carried at fair value.
7. Discuss whether CEO's argument is ethical when preparing the company's financial statements in accordance with AASB101.
8. Recommendations and Conclusion
Reference list (at least 5 references).
Attachment:- Assignment File.rar