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Identification of intangibles listed within th University's finance name

   

Added on  2020-03-02

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Running head: FINANCEFinanceName of the Student:Name of the university:Authors Note:
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1FINANCETable of ContentsAnalysis and explanation of the depreciation policy:................................................................2Depreciation policy of Telstra Corporation limited...............................................................2Depreciation policy of TPG Telecom limited........................................................................3Analysis and interpretation of inventory valuation methods.....................................................4TELSTRA CORPORATION LIMITED...............................................................................4TPG TELECOM LIMITED...................................................................................................6Identification and analysis of intangibles listed within the statement of financial position......7TELSTRA CORPORATION LIMITED...............................................................................7TPG TELECOM LIMITED...................................................................................................9Comparison and Recommendations.........................................................................................10Reference..................................................................................................................................12
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2FINANCEAnalysis and explanation of the depreciation policy:The term Depreciation refers to an accounting technique of allocation of the cost ofany tangible assets based on its useful life. Most often,a company or an organisation followstwo major methods of depreciation. One is the Straight Line Method and the other is theWritten-Down-Value Method of Depreciation (Grant, 2016).In such cases, the management must take some correct and concrete decision toensure profitability in the long run. Here the depreciation policy plays an important role inensuring long run profitability of the company (Collier, 2015). The management must choosethe correct and most efficient method of depreciation so that the valuations of assets arecarried out most efficiently and correctly.Depreciation policy of Telstra Corporation limitedThe Annual Report of Telstra Corporation Limited provides that the company usesStraight Line Method for charging depreciation to its assets. As per the Financial Statementof the company, it is found that amount of depreciation and amortization charges for the year2015 was $3,974 Million that subsequently increased to $4,155 Million in the year 2016, thechange being 4.6%. This implies that due to increase in depreciation and amortization cost,the expense of the company had increased by $181 Million. On comparing the Depreciationand amortization charges, in the year 2015 depreciation of plant and equipment and propertywas $2915 Million that increased to $2957 Million in 2016. Similarly, in the year 2015Amortization charges of intangible assets were $1059 Million that also increased to $1198Million in 2016 (Kim, 2016).
Identification of intangibles listed within th University's finance name_3
3FINANCEFigure 1: Depreciation(Source: Annual report 2016, Page 90)As a result, we found that there is a decrease in profit from continuing operations. Theprofit was $4114 Million in 2015 and decreased to $3832 Million in 2016. In spite of that, itis observed from the financial performances that the net profit for the year 2015 was $4,231Million that increased to $5,780 Million in the year 2016.Figure 2: Profit(Source: Annual Report 2016)Depreciation policy of TPG Telecom limitedThe Annual report of TPG Telecom Ltd. we came to know that the company alsofollows Straight Line Method for charging depreciation. The financial results states that in theyear 2016 the amount of depreciation charged was $102.4 Million and in 2016 it was $136.6Million. Thus, there was an increase of $34.5 Million in depreciation expenses for the year2016.As per the financial statement of the company, we found that Profit after tax for theyear 2015 was $224.1m that increased to $384.6m in 2016. Moreover, from the statement ofComparative Income and Retained Profits we observed that the profit for the year attributable
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