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Financial Accounting and Reporting Assignment

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Added on  2021-06-17

Financial Accounting and Reporting Assignment

   Added on 2021-06-17

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Financial Accounting and Reporting Assignment_1
1By student name ProfessorUniversityDate: 25 April 2018.1 | P a g e
Financial Accounting and Reporting Assignment_2
2ContentsIntroduction.................................................................................................................................................3Acquisition of Non-Current Assets (question 1)..........................................................................................3Calculation of Depreciation (question 2).....................................................................................................5Revaluation (questions 3)............................................................................................................................6Balance Sheet Excerpt (question 4).............................................................................................................7Revaluation and Impairment (question 5)...................................................................................................7Qualitative Characteristics (question 6).......................................................................................................9Revenue Recognition (question 7).............................................................................................................10References.................................................................................................................................................122 | P a g e
Financial Accounting and Reporting Assignment_3
3IntroductionIn the given case, one of the consulting and accounting firms Action accountants has been askedto review the accounts of the new client, Dream Furniture Pty Limited in Australia. The majorareas of focus will be the non current assets reporting, recording and expensing of transactions,revenue recognition and impairment of assets. The given company has a business ofmanufacturing and selling furniture in Australia and has been set up in 2013. The business has 2directors and is registered under the Goods and Service Tax scheme[ CITATION Ale16 \l 1033 ]. Thebusiness commenced on 01st January 2013 and generally closes its annual books on 30th Juneevery year. A number of transaction that the company entered unto has been given including thepurchase of the fixed assets alongwith the details of valuationa and impairment. The companyhas also mentioned its reveuue recognition transactions and the same has been assessed below interms of the AASB standards and the local GAAP.Acquisition of Non-Current Assets (question 1)In the given case, the assets will be recorded at cost in the balance sheet since it is newlyacquired and as per AASB 116, Para 15, all the items of property, plant and equipment whichqualify to be recognised as assets in the books are to be measured at cost. Furthermore, Para 16and Para 17 defines what all are the incidental costs and costs relating to the Property, Plant andmachinery that can be recognised initially[ CITATION Bro16 \l 1033 ]. These include costs of sitepreparation, installation costs, delivery and handling costs and professional fees. Para 19mentions some of the costs like the administration and general overhead costs, the cost ofopening new facility or the cost of introducing a product or service, etc are not be included in theinitial measurement costs. In the given case, the amounts at which the assets will be reorded isshown below:AssetsLandBuildingMachineryFair Value 810,000 480,000 150,000Legal Fees 3,600 - - Renovation cost - 15,600 - Installation cost - - 5,4003 | P a g e
Financial Accounting and Reporting Assignment_4

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