Application of Sustainability and Corporate Governance in BHP Billiton

Running Head: ACCOUNTING THEORY 1
ACCOUNTING THEORY

Running Head: ACCOUNTING THEORY
Executive summary
BHP Billiton is the company that is involved in the business of mining, metals, and the
petroleum dual listed company. In this report a detailed analysis of the application of the
sustainability and the corporate governance has been analyzed and this was helpful in deriving
the overall assessment of how risk management systems were analyzed in the company.

Running Head: ACCOUNTING THEORY
Table of Contents
Executive summary.................................................................................................... 2
Overview.................................................................................................................... 4
I) Recognition and measurement of Property, Plant and Equipment............................................4
Equipment.................................................................................................................. 5
Exploration and evaluation.............................................................................................. 5
Depreciation................................................................................................................ 6
II) Other intangibles.................................................................................................. 6
III) Company’s governance mechanisms in place on the board of directors to address sustainability. .6
IV) Ethical and social responsibility, how company’s risk management systems are addressed and
incorporated in their sustainability reporting............................................................................7
V) Any guidance company used in implementing environmental and social performance and
reporting systems............................................................................................................. 8
VI) Discuss how CSR voluntary disclosure varies across different companies and industries/sectors 10
Conclusion................................................................................................................ 10
References............................................................................................................... 11

Running Head: ACCOUNTING THEORY
Overview
Sustainability and the Corporate governance is the key element in the today’s scenario as each of
the organization are evaluated not just on the basis of the figures and the facts but also on the
basis of the sustainability and the corporate governance mechanisms followed by the company.
This is also in relation with regards to the reporting and presenting the financial statements in the
proper manner (Bellis, 2016). Sustainability and corporate governance are the key drivers that
rule the performance of the company and this will again be helpful in evaluating the position
with respect to the competitors.
I) Recognition and measurement of Property, Plant and Equipment
IAS 1 Presentation of financial statements determines the overall measures in which the financial
statements must be prepared and this also defines the manner in which the financial statements
must be structured. The possible requirements for the content and the overriding concepts such
as going concern and as per the required standard it is mandatory for the company to record all
the financial statements properly (Erkayaoğlu & Demirel, 2016). In case of the selected company
like BHP Billiton, each class of the property plant and equipment have been recognized at the
cost less accumulated depreciation and the impairment charges. Cost is the measure that is
considered over the given time frame at the time of the acquisition of the plant, property and
equipment (Perrott, 2015).
The recognition of the non-current asset in case of the BHP Billiton the impairment tests are
carried out on all the assets, where there is a proper indication of the impairment also when the
intangible assets like goodwill are tested on the annual basis. In case there are nay previously
impaired assets, the reversal of the impairment is any will not be cannot exceed the carrying