Company Accounting

Running head: COMPANY ACCOUNTING
Company Accounting
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COMPANY ACCOUNTING
1
Contents
Introduction:....................................................................................................................................2
Background:.....................................................................................................................................2
Accounting treatment:.....................................................................................................................3
Impairment of assets:.......................................................................................................................6
Alternative approach:.......................................................................................................................8
Conclusion:......................................................................................................................................8
References:......................................................................................................................................9

COMPANY ACCOUNTING
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Introduction:
The companies in Australia are under obligation to follow the Australian Accounting Standards
(AASBs) issued by the Australian Accounting Standards Board (AASB). The financial reports of
the companies including profit and loss account, balance sheet, cash flow statement and notes to
accounts must be prepared in accordance with the relevant AASBs. Fixed assets such as
goodwill, patent, trademark, property, plant and equipment, machineries and others must be
valued and recorded in the books of accounts as per AASB 116 and AASB 138. These assets
shall also be tested for impairment at periodical interval to record any unexpected loss in the
books of accounts for unwarranted decline in the value of these assets. AASB 136 must be
followed by the companies operating in Australia to record impairment loss on fixed assets. A
brief discussion on the accounting treatment by Premier Investments Limited to record brand
name assets and the amount of write down recorded in the books of accounts against these assets
shall be provided here.
Background:
Established in 1970, Premier Investments Limited has its shares listed in the Australian Stock
Exchange (ASX) since 1987. The company operates in retail, consumer and wholesale
businesses in and across Australia. The Just Group is a wholly owned retail conglomerate of
Premier Investments Limited (PIL) and the company also holds 28.06 stake in Breville Group
Limited which manufactures electronics consumer goods. The company supports number of
Australian brands as it directly involves in retail and wholesale business with the above stakes in
different groups.

COMPANY ACCOUNTING
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Accounting treatment:
As per the declaration made by the directors of the PIL the financial statements of the company
have been prepared in accordance with the applicable accounting standards (AASBs). However,
the declaration made by the directors can only be trusted once detailed examination of the
financial statements is conducted to assess whether the applicable AASBs have been followed or
not in preparation and presentation of financial statements of the company (YAN & WANG,
2019).
The notes to accounts in the financial statements of 2017 clearly states that the company has
prepared general purpose financial statements in accordance with the Corporations Act 2001. In
addition the AASBs and other pronouncements of Australian Accounting Standards Board have
also been followed by the company.
Brand name asset:
The company has number of brand name assets that are included under the head intangible assets
in the financial statements of the company. As per the statement of financial position as in June
2017 the amount of intangible assets of the company inclusive of brand name assets is shown
below with the help of an extract from the annual report of the company for 2017.