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Accounting Standards & Regulations

   

Added on  2020-07-23

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Accounting Standards &Regulations
Accounting Standards & Regulations_1

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1A) Summarising accounting policies relating to investment properties.................................1B) Flexibility management in determination of investment property values.........................2C) Potential impacts of changes in retail industry..................................................................2D) Economic consequences of changes in retail industry......................................................3CONCLUSION................................................................................................................................4
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INTRODUCTIONInvestment property valuation plays important role in the business operating on largebasis. Present report deals with potential impacts of changes in the retail industry of VCX. It isASX listed real estate investment trust company which has analysed Australian retail sector inthe past recent years. Furthermore, accounting policies as governed by AASB are listed in thisreport. These accounting policies help to assess clearly value of investment in the best possiblemanner. Flexibility management is required to assess effectiveness of the financial statements sothat users of financial information may get adequate information.A) Summarising accounting policies relating to investment propertiesAccounting policies in the relation to investment properties are governed by AASB(Australian Accounting Standards Board). It is the body which provides rules and regulations toorganisation. Australian retail industry is being changed drastically from the past years asprovided by ABS (Australian Bureau of Statistics). The major tenants in the retail sector areMyer, David Jones, Oroton and Speciality Fashion Group. Furthermore, accounting policies arequite important to companies regarding investment properties (Dungey, Yanotti and Wright,2018). AASB 140 is provided by the board with reference to investment property. The standardclassify that investment property means that part of land held by the lessee under leaseagreement to earn rent money for capital appreciation. Accounting policies are measurement at recognition, after recognition, fair value modeland cost model. The measurement at recognition implies that initial cost should be taken intoaccount while measuring investment property. Moreover, in initial cost, transactional costsshould also be included in calculating property in the best possible manner. Furthermore, amountof liability should be recognised in the same. Measurement after recognition means thatexceptions are noted to choose fair value for all investment backing liabilities that pay returnlinked to fair value of assets (Martin., 2018). Fair value model implies that after initial recognition, this accounting policy can beapplied. Moreover, gain or loss arrived when change in fair value of investment property isaccomplished, then the same must be accounted in Profit or Loss for that period. Furthermore,cost model means that business entity shall take into account AASB 116 requirements for the1
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