logo

Advance Financial Accounting Assignment (Answers)

   

Added on  2020-05-16

11 Pages2890 Words68 Views
 | 
 | 
 | 
Running head: ADVANCE FINANCIAL ACCOUNTING Advance Financial AccountingName of the StudentName of the UniversityAuthors NoteCourse ID
Advance Financial Accounting Assignment (Answers)_1

ADVANCE FINANCIAL ACCOUNTING1Table of ContentsAnswer to Part A:.......................................................................................................................2Answer to I:................................................................................................................................2Answer to II:..............................................................................................................................2Answer to III:.............................................................................................................................3Answer to IV:.............................................................................................................................3Answer to V:..............................................................................................................................3Answer to VI:.............................................................................................................................4Answer to VII:............................................................................................................................5Answer to VIII:..........................................................................................................................5Answer to Part B:.......................................................................................................................6Answer to I:................................................................................................................................6Answer to II:..............................................................................................................................6Answer to III:.............................................................................................................................7Answer to IV:.............................................................................................................................7Answer to V:..............................................................................................................................8Reference List:...........................................................................................................................9
Advance Financial Accounting Assignment (Answers)_2

ADVANCE FINANCIAL ACCOUNTING2Answer to Part A: Answer to I:The Australian Agriculture Company LTD has recorded the impairment of the assetsfor the year ended 31St March 2017. For the purpose of impairment testing the AustralianAgriculture Company LTD has tested plant and equipment and industrial land and building.The impairment of property and equipment and industrial land and equipment fordetermining the carrying values of these assets (Picker et al. 2016). The impairment testing isdone by the Australian Agriculture Company LTD on the circumstances when it becomesapparent that the carrying value might not be recoverable. Answer to II: The impairment testing for the plant and equipment and industrial land and equipmentis conducted by Australian Agriculture Company Ltd in order to make sure that these assetsare not carried anything beyond their recoverable value. According to the AustralianAgriculture Company Ltd an asset that does produce high independent cash inflows therecoverable value is ascertained to the cash generating unit to which the assets belongs (Yuand Xu 2015). Given that there is any sign of impairment existed and on the circumstanceswhere the carrying value of the asset goes beyond the recoverable amount the written downamount of the assets is written down or transferred to the cash generating units. In carrying out the impairment of the plant and equipment the recoverable if theamount of the assets is higher than the fair values then the cost is subtracted front the salesand value in use. In determining the value in use, the projected future cash flows arediscounted to their current amount by making use of the pre-tax discount rate (Lubbe,Modack and Watson 2014). This eventually reflects the present market assessments relatingto the time value of the money and the risk that is associated to the cash generating unit.
Advance Financial Accounting Assignment (Answers)_3

ADVANCE FINANCIAL ACCOUNTING3Answer to III:On conducting a detailed analysis of the Australian Agriculture Company Ltd annualreport it is noticed that the company has not recorded any impairment expenditure.Additionally, there have been no instances associated to the impairment expenditure in thepreceding years of 2015 and 2016 respectively as stated in assessing the cash flow statementof the firm. However, it is noticed that provision related to impairment of receivables havebeen stated in the financial statement (Tsalavoutas, André and Dionysiou 2014). The tradereceivables are regarded as the non-interest bearing and are usually based on the 14 dayterms. An impairment is identified at the time when there are objective evidences that noindividual accounts receivable will be considered collectible. Answer to IV: The preparation of the financial statements requires the organization to make certainjudgements, estimations and assumptions that might create an impact on the reported amountof the firm in the financial statements. The Australian Agriculture Company Ltd on regularbasis evaluates and estimates the assets, liabilities, income and expenditure (Ono, Rodriguesand Niyama 2014). The judgement and the estimation is conducted based on the historicalcost experience and other numerous factors that are reasonable in the circumstances wherethe carrying value of the assets and liabilities is not readily obtainable from the other sources.The impairment of financial and non-financial assets is based on the different assumptionsand circumstances which might materially create an impact on the financial result or financialposition of the firm. Answer to V: The accuracy of the impairment testing will be impacted by the degree andsubjectivity of the estimations and judgements relating to the inputs and parameters that is
Advance Financial Accounting Assignment (Answers)_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
HA 3011 Advance Financial Accounting Report - doc
|9
|1920
|38

Advanced Financial Accounting Assignment (AFA)
|15
|3110
|29

HA 3011 Advanced Financial Accounting Assignment - doc
|12
|2711
|48

Advanced Financial Accounting Assignment (Solution)
|15
|3015
|48

HA 3011 Financial Accounting : Assignment
|11
|2230
|95

Assignment Financial Statements
|10
|3145
|47