Corporate Accounting

Running head: CORPORATE ACCOUNTING
Corporate Accounting
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1CORPORATE ACCOUNTING
Table of Contents
Introduction:...............................................................................................................................2
Business and Operating Activities:............................................................................................2
Finances and Financial Performance:........................................................................................3
Sources of Finance.................................................................................................................3
Financial Performance:..........................................................................................................4
Event after reporting Date:.........................................................................................................4
Overview of changes in accounting policies:.............................................................................4
Assets – Property Plant Equipment and Intangibles:.................................................................5
Accounting Policies related to PPE:..........................................................................................6
Intangible assets reported by the company:...........................................................................6
Accounting policies relating to Intangible Assets:.....................................................................7
Impairment:................................................................................................................................8
Property Plant and Equipment:..............................................................................................8
Intangible Assets:...................................................................................................................8
CSR of Qantas Airways:............................................................................................................8
Importance of CSR and Sustainability:......................................................................................9
Conclusion:..............................................................................................................................10
References:...............................................................................................................................11

2CORPORATE ACCOUNTING
Introduction:
Qantas Airways Ltd is regarded as the premium airliner carrier of Australia and it is
regarded as the biggest airline company in terms of its size, worldwide flights and
destinations (Qantas Investors, 2019). The airline company is the viewed as the third oldest
airline company in the world following KLM and Avianca. The airline company has its base
in Sydney suburb of Mascot and its central hub is in Sydney Airport. The market survey
suggests that the Qantas Airways Ltd has the Australian market share of around 65% and
carries regularly 14.9% of the passengers both inside and outside of Australia.
The core business activities of Qantas Airways Ltd are transporting passengers by
using its two corresponding airline brands namely Qantas and Jetstar. The airline brand of
Qantas operates international, regional and domestic services and during the financial year of
2018 the company carried greater than 55 million passengers (Qantas Investors, 2019). The
company has wide range of subsidiaries business portfolio that ranges from the Qantas Fright
Enterprises. It also operates subsidiaries business that includes the other range of airlines and
businesses that are in the specialist market such as Q Catering.
Business and Operating Activities:
Australia’s aviation industry is anticipated to remain a positive factor in tourism with
higher forecast of stronger loads and yields on the Australian routes. In the last two decades,
there has been a growth in the international aviation capacity and Australia’s aviation
industry capacity has grown from 9.3 million inbound seats to 26.9 million seats for the year
2018 (Flower, 2018). It represents that Australian aviation industry is growing at an average
of 4% every year. The increase in the capacity is mainly due to rise in the capacity from the
New Zealand, Southeast Asia, Middle East and USA. From December 2018 the global
aviation volume of Australia has attained growth by 4.2% over the last twelve months.

3CORPORATE ACCOUNTING
The airline industry can be considered very competitive and the profit margins that is
realised is very low. Virgin Australia is one of the well-branded competitor for Qantas
Airways under the budgeted market. Qantas Airways Ltd main aim is to make cost-effective
business by presenting new planes and catering services at reduced costs than the other
competing firms (Bushee et al., 2018). The competitive environment for Qantas Airways also
comprises of the Tigerair Airline that has adopted the similar lower cost model like Qantas
and Virgin Australia by introducing new planes and taking up the business functions in the
profitable routes at a cheaper price. Qantas faces the main obstacle in the market of the new
competitors that introduces new reduced prices for their services.
To make the competition intense airline companies such as Virgin Australia, Tigerair
and Impulse entered the Australian aviation market as the lower cost airline service provider.
Even though Qantas Airways has the strong brand popularity, Virgin Australia and Tigerair
Australia poses as a serious competitor for Qantas Airways by providing services at lower
cost. However, to cater the offers of competing firms Qantas Airways has launched a low-
cost service to counter Virgin Australia.
Finances and Financial Performance:
Sources of Finance
Qantas Airways uses external sources of finance to funds its business operations. The
company carry on to hold the substantial elasticity to manage its monetary situation,
approaches of funding and fleet strategy to make sure that it continues to answer to the
changes in the market circumstances and its profit earning set-up (Martínez‐Ferrero et al.,
2015). In order to remain inside the optimum capital structure, aiming the least level of
liquidity, assuring long-term obligations are achieved, the company maintains access to wide
range of added capital sources and handling maturity profiles (Qantas Investors, 2019).