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HA 3011 Advanced Financial Accounting Assignment - doc

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Advance Financial Accounting (HA 3011)

   

Added on  2020-05-28

HA 3011 Advanced Financial Accounting Assignment - doc

   

Advance Financial Accounting (HA 3011)

   Added on 2020-05-28

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Running head: ADVANCED FINANCIAL ACCOUNTINGAdvanced financial accountingName of the universityName of the studentAuthors note
HA 3011 Advanced Financial Accounting Assignment - doc_1
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
HA 3011 Advanced Financial Accounting Assignment - doc_2
2ADVANCED FINANCIAL ACCOUNTINGAssessment Task Part A: Requirement i) The assessment of impairment testing of assets of New hope group limited at the end ofeach reporting period is done when there exist any objective evidence group of financial assets orany individual financial asset requires impairment. Existence of any objective evidence resultingfrom occurrence of any events or circumstances results in impairment of financial assets.Whenever, there is any indication resulting in change in circumstances or events that it isdifficult carrying amount of assets, then new hope group limited conducts impairment testing.Identification of impairment loss is done by the amount when recoverable amount of assets ismore than their carrying amount. Amount that is recovered is higher of value in use of asset andfair value of assets by deducting disposal cost. Impairment of assets for testing value in use isdone by grouping the assets at lowest levels for which cash flow can be identified separately thatare not dependent upon cash inflow of cash generating units. Any indicator for reversingimpairment of assets is assessed by company on annual basis. All the cash generating unit-incorporating plant, equipment and property along with goodwill are performed impairmenttesting annually at cash generating unit level (newhopegroup.com.au 2018). When organizationidentifies any indicators relating to other plant, equipment and property then should also beexperienced for impairment. Requirement ii)New hope group limited conduct impairment testing by incorporating judgment forassessing impairment indicators relating to plant, equipment and property. For oil production andcoal mining assets, some key judgments done by organization involve external factors such asforeign exchange factors and forecasted price of commodity. Estimation of oil and coal reserves
HA 3011 Advanced Financial Accounting Assignment - doc_3
3ADVANCED FINANCIAL ACCOUNTINGalso requires judgment. Discount cash flows are analyzed when cash generating unit groups ofassets recoverable amount are evaluated for impairment. Critical factors in determiningrecoverable amount of CGU are performance of estimates in terms of costs for completing theconstruction of assets and expansion of projects (newhopegroup.com.au 2018). It has beenascertained from the analysis of annual report of new hope group limited that assets recoverableamount is more than their carrying amount that is confirmed by fair value discounted model ofcash flow. Requirement iii)New hope group have recorded expenditures relating to impairment of assets in recentfinancial years. In financial year 2017, impairment assets expenditure is recorded at $ 2030million and $ 33124 in financial year 2016 respectively (newhopegroup.com.au 2018). Thesefigures are representative of the fact that impairment expenditures of assets have declinedconsiderably in current year. Requirement iv)Management is required to make judgment in estimating value of resources and reservesand in relation to this, assumptions is done about exchange rate, future price of commodities andproduction costs. The model of discounted cash flow used by company makes assumption suchas weighted average, extension of approvals timeline, foreign exchange and pricing of coals.Company concerning recoverable future amounts of assets for assessing recoverability makesappropriate assumptions. Historical results of group forms the basis of making estimates byconsidering types of transactions and types of customers (newhopegroup.com.au 2018).
HA 3011 Advanced Financial Accounting Assignment - doc_4

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