Accounting Standards and Regulations Assignment 2022

Running head: ACCOUNTING STANDARDS AND REGULATIONS
Accounting Standards and Regulations
Name of the Student:
Name of the University;
Author’s Note

ACCOUNTING STANDARDS AND REGULATIONS
1
Requirement of Part a
The business of Transurban Holdings Ltd is considered which is engaged as a Toll road
operator in Australia. The company follows an appropriate conceptual framework for the
purpose of reporting the transactions which are associated with the company for the period
(Transurban.com. 2019). Toll road concessions are considered to be assets for the company and
the features which can be identified regarding the same cash flows which can be collected over a
long period considering the concession agreement. The business follows a policy of maintaining
high quality Toll Roads so that the asset can bee maintained over the concessional life of the
asset. It is to be also noted that service concessions which is received from construction and
maintenance of toll roads are principle sources of revenue for a business. In order to report the
two different segments of revenue for the business, the accounting standard of AASB 15 is
considered. The service concession for maintaining the toll roads is considered as one of the
performance obligations and the revenue are recognized when at the point when the same are
received (Miller and Power 2013). The options which are available to the management of the
company is to either follow fixed asset model or intangible asset model and the treatment of the
same would be differing considering the model which is selected by the management of the
company.
Requirement of Part b
The business of Transurban Holdings Ltd measures the assets of the business considering
either the intangible asset model or the financial asset model considering the choice of the
management of the business. The business is engaged in the operations of constructions of toll
roads and also maintenance of the same. It is to be also noted that the business generates
appropriate revenue from such operations and the same are accounted for considering AASB
interpretation 12 service concession arrangements. The revenue recognition method which is to
be applied by the business depends on the management flexibility as there is a choice between
intangible asset model or the financial asset model. Under the provisions which are stated under
intangible asset model, the revenue from construction services would be regarded as progress in
line of customer services and therefore the same would be treated as revenue which would be
measured at fair value which is determined considering the standalone prices for selling
(Christensen, Nikolaev and Wittenberg‐Moerman 2016). The maintenance services for the toll
road would also be a performance obligation for the business and the revenue which is generated