Advanced Corporate Reporting | Report

Running head: ADVANCED CORPORATE REPORTING
Advanced Corporate Reporting
Name of the Student
Name of the University
Author’s Note

1ADVANCED CORPORATE REPORTING
Table of Contents
1. Company Introduction.................................................................................2
2. Analysis and Discussion on Accounting Policies..........................................2
Requirement (a)...........................................................................................2
Requirement (b)...........................................................................................3
Requirement (c)............................................................................................4
3. Quality and Usefulness of Company’s Disclosure........................................5
References.......................................................................................................7

2ADVANCED CORPORATE REPORTING
1. Company Introduction
EasyJet Plc is a low cost point-to-point airline of Europe. Cost
advantage and strong network position is used by the company for delivering
low fares and operational efficiency. A strong capital base along with a
market capitalization of £4 billion and a cash position of £213 million are
strengths of this airline (corporate.easyjet.com 2020). In the years 2019 and
2018, EasyJet Plc had investments in subsidiaries and associated companies
worth £945 million and £927 million respectively. Since EasyJet Plc operates
in the airline industry of Europe, the main regulators of the three-pan-
European airlines are Austracontrol (Austria), the Civil Aviation Authority (UK)
and the Federal Office of Civil Aviation (Switzerland) (corporate.easyjet.com
2020). EasyJet Plc has strong engagement commitment towards policy
makers, governments, Air Traffic Control operators, tourism bodies and
airline associations. The International Financial Reporting Standards (IFRS) as
adopted by the European Union along with the Companies Act 2006 are
followed by the company for the preparation and presentation of its financial
accounts and statements (corporate.easyjet.com 2020).
2. Analysis and Discussion on Accounting Policies
Requirement (a)
In compliance with IAS 36, EasyJet Plc tests its non-current assets for
assessing impairment annually at the cash-generating units. There is only
one cash-generating unit of EasyJet Plc that is route network as it is related
to goodwill and all landing rights. EasyJet Plc determines the value in use of
this cash generating unit through discounting future cash flows to their
present value (ifrs.org 2020).
The cash flow for impairment is assessed by the management through
discounting future cash flows to their present value. The key estimates
considered include ability of meeting strategic plans, future fuel prices and
exchange rates, long-term economic growth rates in the counties in which it
operate and others.
The main indications of impairment in the balance sheet include
decline in the assets’ market value, increase in market interest rates, net
assets of EasyJet Plc is higher than market capitalization and negative
changes in technology, laws and markets (Johansson, Hjelström and Hellman
2016).
The recoverable amount of goodwill and other assets with indefinite
expected useful lives is ascertained by EasyJet Plc on the basis of the value
in use calculations of the route network; and the assumptions used are
ability of meeting the strategic plans, future exchange rates and fuel price,