Accounting for Corporate Structure Report 2022

ACCOUNTING FOR
CORPORATE STRUCTURE
Running Head: Accounting for Corporate Structure

1
Executive Summary
Contents
Introduction...................................................................................................................................... 3
Significance of Accounting Standards for the Corporations and other Users..................3
Application of Accounting Standards in Westpac Banking Corporation........................................................4
Application of AASB 9 (Financial Instruments) in Westpac Banking Corporation..............................................4
Application of AASB 15 (Revenue from Contracts with Customers) in Westpac Banking Corporation....................5
Application of AASB 16 (Leases) in Westpac Banking Corporation...............................................................5
Conclusion........................................................................................................................................ 6
References......................................................................................................................................... 7
This report discusses about the importance of Accounting standards and its application in Westpac
Banking Corporation. Accounting standards are the accounting guidelines followed by the companies
for the preparation and presentation of their financial statements. Westpac Banking corporation has
majorly brought changes to the application of three accounting standards namely AASB 139, AASB
118 and AASB 117 by replacing them with AASB 9, AASB 15 and AASB 16. AASB 9 has reduced
Westpac’s retained earnings to $722 million and $495 million for group and parent entity respectively.
It happened due to AASB 9 which rose the amount of impairment provision. AASB 15 has given a 5-
step model for recognising the revenue and expenses. AASB 16 mandates the lessee to show all lease
with a duration more than 12 months on his balance sheet as right of use on assets’ side and lease
liability on liabilities’ side. It is expected that AASB 16 would result in $3.4 billion of right-of-use
asset along with the corresponding lease-liability.

2
Introduction
Accounting Standards are set to guide the practice of accounting the business transactions and events. The
requirements of accounting have a direct effect on the preparation and presentation of company’s books of
accounts and financial statements. It facilitates comparison of the financial statement with different organisation
to make correct investment decision (Simone, 2016).
In Australia, the accounting practices of the companies are guided by the standards formed by the Australian
Accounting Standards Board (AASB).