Business Entity in Australia

Running head: ANALYSIS REPORT
ANALYSIS REPORT
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ANALYSIS REPORT
1
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................4
Conclusion..................................................................................................................................8
References..................................................................................................................................9

ANALYSIS REPORT
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Introduction
AGL Energy Ltd is a public listed business entity in Australia. The business operates
in energy and utility sector and has its headquarters at Sydney and New South Wales. The
organization work with various products and services such as producing wind power, natural
gas, coal steam gas and many other products related to generation of energy. AGL primary
operations are related to manufacturing and dispensing of gas and energy for both residential
and business purpose. The company offers certain other services related to energy generation
and distribution of natural gas. Primary investment of organization are done in gas and
electricity sectors. AGL is leading private owner and inventor of renewable sources of assets
related to energy in Australia (Agl.com.au, 2020). The company has a leading position in the
ASX listed investor in the field of renewable source of energy. If Australia electricity
generation portfolio is taken into consideration, then AGL occupies the largest position. The
company provides a secure, affordable, and sustainable source of energy to the people of
Australia. Approximately 20% of the energy generation portfolio is covered by AGL within
Australia’s National Electricity Market. The business entity deals in gas, electricity wholesale
market where customers belong to residential, large and small work houses, and many other
wholesale customers. The corporate governance structure of business is extremely impressive
as it consists of policies and regulations that exhibit a high standard of the company and even
the framework takes into account the emerging trends related to corporate governance to
meet stakeholder’s expectations. The company has a clear viewpoint that appropriate and
strong corporate governance will help the company to sustain for an extended period in the
competitive market.

ANALYSIS REPORT
3
Depreciation and Amortization
PPE are valued at expense less assembled depreciation and impairment losses. IFRS
relating to long-term assets states that asset held for selling purpose will be recognized at
lower of either, asset carrying costs or fair value of asset less the price of selling the asset
(Koiranen, 2014). Even the long-term asset held for sale must be presented separately on
financial position statement under the current asset. In this case, depreciation is evaluated by
original cost method; thus, company can write off expense of asset over its estimated
functional life to its approximated residual value. After end of financial year, company
evaluates the carrying cost of assets to identify if the fixed assets have incurred any
impairment loss or not. To examine amount of impairment loss, recoverable amount of assets
are measured. In case, if estimation of recoverable amount is not possible, then cash-
generating unit of cash is taken into account for the calculation purpose (Lusardi & Mitchell,
2014). If carrying value of asset is more than recoverable amount of asset, then impairment
loss is shown in profit or loss. The net carrying amount of PPE in 2019 is $6,588, and for
2018, it comes to $6,757. In this case, approximated useful life of asset is used for
calculating amortization for intangible assets. For customer relationship and contracts 3-20
years, for software 3-7 years, and licenses lower of license term and useful asset life. Both
software and license valued at expense less any assembled amortization and impairment
losses. For 2019, there was no impairment loss recognized for customer markets or wholesale
markets. For estimating impairment of goodwill and other non-physical assets with an
unspecified useful life, a discounted methodology is used to which goodwill and other non-
physical assets with unlimited convenient lives are allocated.