Advanced Financial Accounting Assignment (Solution)
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Added on 2020-05-16
Advanced Financial Accounting Assignment (Solution)
Added on 2020-05-16
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Running head: ADVANCED FINANCIAL ACCOUNTINGAdvanced financial accountingName of the universityName of the studentAuthors note
1ADVANCED FINANCIAL ACCOUNTINGTable of ContentsPart A:..............................................................................................................................................3Requirement i).................................................................................................................................3Requirement ii)................................................................................................................................3Requirement iii)...............................................................................................................................3Requirement iv)...............................................................................................................................3Requirement v)................................................................................................................................3Requirement vi)...............................................................................................................................3Requirement vii)..............................................................................................................................3Requirement viii).............................................................................................................................3Part B:..............................................................................................................................................4Requirement i).................................................................................................................................4Requirement ii)................................................................................................................................4Requirement iii)...............................................................................................................................4Requirement iv)...............................................................................................................................4Requirement v)................................................................................................................................4
2ADVANCED FINANCIAL ACCOUNTINGPart A:Requirement i)Fair fax media limited has conducted the impairment of assets such as investments thataccounted for using the method of equity. Such investments are tested for impairment at eachreporting date when there is indication of impairment. At the end of each reporting period, assetsthat suffered impairment are reviewed for reversal impairment. Some of the intangible assets oforganization such as trade names and mastheads having indefinite lives are tested on annual basisfor impairment. Goodwill is also tested for impairment on annual basis along with other assetssuch as radio licenses, database, software and websites. The indication of existence ofimpairment is provided due to occurrence of one or more events in relation to any particularassets (fairfaxmedia.com.au 2018).
3ADVANCED FINANCIAL ACCOUNTINGRequirement ii)The process of allocation of such assets that is goodwill and intangible assets to cashgenerating units does impairment testing of indefinite lives of intangible. It is required by groupto assess recoverable amount of cash generating unit in association with making considerablejudgments regarding the factors such as forecasting of cash flows, conditions of industry, declineand growth rate, terminal growth rate and discount rates. Assets that are impaired through testingof cash generating unit involves property, equipment and plan worth $ 1.1 million andintangibles worth $ 14.7 million (fairfaxmedia.com.au 2018). Impairment of other assets such asplant, equipment and property is carried by reviewing the carrying value of such assets on annualbasis whether they are exceeding the recoverable amount or not. Present value of expected futurecash flow forms the basis of estimating the recoverable amount. Amount of impairment of plantand equipment along with intangibles is recorded at $ 28.9 million. Total amount of impairmentfor investments, intangibles and property, equipment and plants for the financial year 2016 and2017 is recorded at $ 1153087 million and 34124 million respectively (fairfaxmedia.com.au2018).
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