ACCM4200 - Qantas Airways Accounting Issues: Business Letter Response

This assignment presents a business letter drafted by Hitech Group Ltd in response to an inquiry from Qantas Airways regarding several accounting issues. The letter addresses concerns related to brand valuation, tax implications, impairment testing, and lease liabilities, particularly concerning the valuation and control of assets like airplanes. It discusses the importance of internal valuations aligning with external perceptions, the proper handling of taxation policies, and the application of impairment testing to assess asset value declines. Furthermore, it delves into the criteria for establishing control over assets in lease agreements, emphasizing the significance of managing economic benefits and mitigating risks associated with asset management. The letter concludes by advising Qantas on strategies to ensure proper asset control and compliance with accounting standards, providing a comprehensive overview of key considerations for Qantas Airways.

Business letter

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................1

INTRODUCTION
There are various challenges that are present in accounting. The report will highlight all the
issues that are a part of the discussion that has happened in the letter drawing solutions.
REPLY LETTER
It is our pleasure to hear from you regarding the issues that are pertinent with respect to the
organisational entity. On a whole based on the information that is provided by you through the
letter there are certain negotiations that a pertaining with regard to the total valuation of assets.
Bringing forth the required details that are being highlighted by you in the letter we would want
to give a brief about all the queries that are in regard to the organisational entity (Schaltegger and
Burritt, 2017). The query regarding brand value as well as a recognition of amount as an asset
that is being mentioned by you in the report will highlight the consequences that are oriented
with the organisational activity. To stand and to evaluate as one of the unique brand and to
withstand all the tax consequences it is first necessary that the internal valuations will have to be
done such that it will not get over the external valuations.
To stand as a unique brand and to move ahead with the formulations of the organisation it is first
necessary to fulfil the activities that are in charge of the organisation. The organisation steps to
asset ratio will have to meet the finance operations in a comparative data analysis that can bring
about the entire industry analysis. This ratio calculated over the total expenses will help the
organisation to stand form representing its brand. Therefore it is also one of the important
consequence and that will have to be analysed by the organisation before approving the loan.
There for thinking about the capitalising of the brand it is therefore an important as well as a
necessary criteria that would include property plant and equipment. There are various tax
consequences that will follow in regard to the compensation of the organisation and the
deduction of tax is said to be a normal criteria for every organisation that is operating in the
government rule (Raiborn and Sivitanides, 2015). Therefore it is necessary that the taxation
policies will have to be avoided and the organisation will have to pay the required consequences
as a part of compensation that would be an ordinary paid service.
The taxation policy will have to be identified as a normal criteria and that cannot be a
detrimental factor in determining the standards of organisation. Also regardless of what the
organisation is dealing with the taxation policy is one of the factor that will fall as an

organisational entity. Rising above the consequences will never let people to choose over the
taxation policies and therefore there would be certain percentage of tax that is in regard to the
organisation. The brand that is being established by the organisation will be recognised by
people by the amount of external policies that are being incorporated in the organisation like that
of marketing which will help people to recognise the organisation as one of the most probable
brand (Deegan and Deegan, 2007). Bringing forth all the queries that are in regard to the
operational entity and dealing with the circumstances outside the organisation which will fall in
regard to the external factors of the organisation can be a well known evaluation in terms of
brand.
The impairment testing is one of the formulation in accounting that will bring about the benefits
that are associated with various aspects of the organisation that could analyse the dropping of the
acids drastically. The value of an asset will sometimes exceed the sum of an discounted cash
flow in the organisation that is impaired. This is one of the important criteria where it will also
stand as an indicator. There are certain steps that will have to be incorporated by dealing with the
impairment testing process in an organisation while dealing with the accounting policies.
This can also be a guidance for the process that will have to be followed. Comparing the sum of
all the undiscounted net cash flows is one of the first probable step that will have to be carried
such that the value of the acid can be known. An impairment will happen only when the carrying
value is lower than the sum of cash flow (Stanga and Turpen, 1991). This can be regarded as a
criteria very environment will follow in regard to the organisations accounting policy and vice-
versa. The next stage of this particular impairment test will fall in regard to dealing with the
expenses that will determine carrying value of the assets and its fair value. It will also stand as a
detrimental value that will bring about a difference between these two factors.
It is necessary to calculate this as an overall entity because to deal with the negotiations of the
organisation with respect to accounting it will stand as one of the fair policies that will depict the
choice of an asset as well as bringing its value to the brim of evaluation. The right to control the
use of an acid is derived to be one of whose entity that is calculated of the initial amount. The
initial direct costs are all deducted from the amount and the lease incentives are being calculated.
This is term to be the right to control over assets. This is one of the periodic exception for every
organisation because right from the commencement of leaves that it is necessary to calculate the
useful assets and they are carefully handle that whenever there is a component that is being

missed from the entire entity of calculating the lease then there will be an option to excise over
the purchase decisions.
This particular entity will revolve around all the economic policies of the organisations in second
main is one of the greatest factor that will have to be taken care about. Giving the right to direct
as to obtain the rights in order to manage all the economical implementations as well as the
benefits that are oriented with its. The use of assets is monitored by certain detrimental factors
that will bring about specified amount of use. This is a probable phenomena that will bring about
a right to use the assets and which is calculated over the initial amount and lease liability. Based
on all the speculations it can be concluded that the acids can be controlled according to the
negotiations that you have prescribed in the report (Busco and et.al, 2007). There can be a gain in
the right amount of acid only when the required formulations for the probable entities are being
summarised to such an extent that every as it can be there for controlled.
The lease liability that is in charge of the organisation is calculated over the very first asset that is
being processed by the organisation. Assets of the organisation are regarded to be one of the
finest entities that are necessary for the company to move ahead in terms of development and
operations. It is not until when the assets are processed was a long time that the organisation can
run on good terms making profits that are beneficial. Here in this regard when the aeroplanes are
being considered as a valuable assets for your organisation it will have to be fixed upon certain
entity such that they bring in the lot more options that are necessary for you people to evaluate.
When the control over the assets is being grabbed by the organisation then it can peacefully
move ahead in terms of developing their strategies such that the inclusion of various entities of
making profitable standards can be derived (Sterling, 1975).
Also an equipment driven business is one of those fostering aspects in this current scenario and
that is brought about by the sense of Asset Management. This particular right will give control to
the organisation as well as the assets for the stipulated period which is more than the time that is
required. That is nowhere less than the reliable criteria of assets that are being processed by the
organisation because the law that is adjourning two words are the rights as well as the
management of assets is fixed for certain organisations and there are not so critical risk that are
associated.
When the fixed assets time period is less than that is required then obviously the company will
lose control over the Assets and they will have to go under lease. For nerve the aeroplanes that

are being incorporated in the organisation are totally controlled by you and there are certain
entities that will have to be followed such that you can gain the right amount of property rights
that are important for the company as well as its operations (Baldvinsdottir and et.al, 2010). In
company discussion as to be portrayed in this regard in order to identify the external standard
that are acting as barriers for the organisational growth. This will in return impact the entire
efficiency of organisation and the assets will also be affected. In order to make sure that the
assets are not affected the right amount of strategies in order to win over the choices of
government as well as the other factors can be eradicated.
CONCLUSION
The report concludes upon highlighting the prospects of the accounting facets. The various
challenges that are part of the organisational performance are explained in this report.

REFERENCES
Books and journals
Schaltegger and Burritt, 2017. Contemporary environmental accounting: issues, concepts and
practice. Routledge.
Raiborn and Sivitanides, 2015. Accounting issues related to Bitcoins. Journal of Corporate
Accounting & Finance. 26(2). pp.25-34.
Stanga and Turpen, 1991. Ethical judgments on selected accounting issues: An empirical study.
Journal of Business Ethics. 10(10). pp.739-747.
Busco and et.al, 2007. Management accounting: issues in interpreting its nature and change.
Management Accounting Research. 18(2). pp.125-149.
Sterling, 1975. Toward a science of accounting. Financial Analysts Journal. 31(5). pp.28-36.
Baldvinsdottir and et.al, 2010. Issues in the relationship between theory and practice in
management accounting. Management Accounting Research. 21(2). pp.79-82.
Deegan and Deegan, 2007. Australian financial accounting. Sydney: McGraw-Hill.
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