HA3011 Advance Financial Accounting
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Added on 2020-05-16
HA3011 Advance Financial Accounting
Added on 2020-05-16
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HA3011 AssignmentAdvance financial accounting
TABLE OF CONTENTSTask 1...............................................................................................................................................3Part A...........................................................................................................................................3Part B...........................................................................................................................................3Part C...........................................................................................................................................3Part D...........................................................................................................................................3Part E...........................................................................................................................................4Part F............................................................................................................................................4Part G...........................................................................................................................................4Part H...........................................................................................................................................5Task 2...............................................................................................................................................5Part A...........................................................................................................................................5Part B...........................................................................................................................................6Part C...........................................................................................................................................6Part D...........................................................................................................................................6Part E...........................................................................................................................................7References........................................................................................................................................8
TASK 1Part AImpairment assets associated with commonwealth bank are goodwill, joint ventures and plantand equipment. The goodwill arising from the combinations of business which include intangibleassets on balance sheet is impaired. If any indication occurs that the investment is beingimpaired, then the whole carrying cost of the investment in the joint venture is tested forimpairment. In plant and equipment, the company calculates it on fair value based on marketvaluation independently (Annual report of Commonwealth Bank 2018). Part BFor the purpose of impairment testing of plant and equipment the company’s revaluationsadjustments are shown in the reserves of asset revaluation in the income statement. The realizedamount of the reserves of asset revaluation are then transferred to the retained profit account.Other properties remain at a cost which includes direct increasing of the cost of acquisition bysubtracting accumulated depreciation and heading towards impairment testing (Lind andArvidsson, 2014).The goodwill of the company is impaired annually by locating the units fromwhere the cash is being generated. It is done by comparing the recoverable sum from thecarrying amount of the goodwill. If the carrying sum is more than impairment testing isconducted by the company.Part CThe loss held from the impairment testing of the assets of the company is further recorded in theincome statement under the section of total operating expenses. The loss occurred by impairmenttesting is a reason for the reduction in the net income of the firm (Paugam and Ramond, 2015).This is included in testing for the recoverability by calculating the future undiscounted flow ofcash for the assets and then comparing the value with the carrying cost of assets. Part DThe applicability of Group’s impairment testing needed the relevant use of judgements,assumptions and estimated which are based on past experience and factors that are assessed to beviable and are considered on a continual basis. The provisions are formed on the basis of fair
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