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Enterprise Architecture, Strategy and Governance - doc

   

Added on  2020-05-28

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Running head: ADVANCED FINANCIAL ACCOUNTINGAdvanced financial accountingName of the universityName of the studentAuthors note
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1ADVANCED FINANCIAL ACCOUNTINGTable of ContentsAssessment Task Part A:.................................................................................................................2Requirement i).................................................................................................................................2Requirement ii)................................................................................................................................2Requirement iii)...............................................................................................................................2Requirement iv)...............................................................................................................................3Requirement v)................................................................................................................................3Requirement vi)...............................................................................................................................4Requirement vii)..............................................................................................................................4Requirement viii).............................................................................................................................5Assessment Task Part B:.................................................................................................................5Requirement i).................................................................................................................................5Requirement ii)................................................................................................................................6Requirement iii)...............................................................................................................................7Requirement iv)...............................................................................................................................7Requirement v)................................................................................................................................8References list:...............................................................................................................................10
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2ADVANCED FINANCIAL ACCOUNTINGAssessment Task Part A: Requirement i) CSR limited has recorded impairment of assets for year ending 31st March, 2017 insegments of building products so that carrying value of these assets are reduced to theirrecoverable amount. Moreover, plants and equipment were impaired with the written down valueof $ 11 million. Intangible asset such as goodwill has been done to a written down value of $ 0.2million (csr.com.au 2018). Impairment of all these assets have been performed for year ending,2017. There has been no impairment conducted for year ending 2015 and 2016. Requirement ii)The impairment testing of plant, property, equipment and intangible assets are done byCSR limited for ensuring the fact that they are not carried at value that is above their recoverableamounts. For the trade names and goodwill, impairment testing is performed at least annuallyand the assessment is done at each reporting date when there is indication that assets requireimpairment. CSR limited makes the assessment about each individual assets recoverable valuefor performing the impairment testing (Nilsson and Stockenstrand 2015). If it not possible tomake the assessment about recoverable amount of each assets, then recoverable amount of cashgenerating unit is assessed for conducting impairment testing. The Cash Generating Unitcarrying amount is reduced to recoverable amount if carrying amount is more than itsrecoverable amount and the value is recognized in the financial performance statement(csr.com.au 2018). An impairment allowance is established by CSR group that helps inrepresenting of incurred cost expenses in respect of receivables and trade.
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3ADVANCED FINANCIAL ACCOUNTINGRequirement iii)From the analysis of annual report of CSR limited, it can be inferred that group has notrecorded any expenses related to impairment for the year of analysis. There have been noexpenses related to impairment for year ending 2015 and 2016 respectively as depicted byanalyzing cash flow statement. However, for the financial year 2017, net cash flow of amount $11.2 million has resulted from impairment of assets (csr.com.au 2018). Requirement iv)CSR group is required to make estimates and assumption about assets and liabilitiescarrying value that are based on several factors and historical experience. Such factors areconsidered to be under circumstances that are reasonable. Estimates made by organization mightdiffer from the actual value. Methodology used by organization for impairment of assets isevaluated on an ongoing basis along with making the assumptions about value in use. In order toextinguish the obligations, estimates of future costs is done by requirement of judgment.Estimations are made in estimating recoverable amount and any change in estimates leads to lossrelating to impairment (Lin and Graham 2017). Requirement v) The testing of goodwill impairment incorporates exercising of substantial subjectivity inaccordance to current international accounting standard. Analysis of annual report of CSRlimited illustrates that recoverable amount calculation, allocating goodwill to Cash GeneratingUnit is not subjected to discretion, and this is indicative of the fact that impairment testing ofassets are not done opportunistically. However, the calculations of value in use require judgmentof management for using suitable discount rate in calculation of future cash flows. Therefore, itcan be inferred that there was low degree of subjectivity involved in the calculation of
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