CORPORATE ACCOUNTING.

Running head: CORPORATE ACCOUNTING
Corporate Accounting
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1CORPORATE ACCOUNTING
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................2
Answer to question 3:.................................................................................................................2
References:.................................................................................................................................3

2CORPORATE ACCOUNTING
Answer to question 1:
An impairment loss results in numerical dip in the profit and loss account. For assets
that are carried at the historical costs, the impairment losses are recognized as the expenditure
directly in the profit and loss account. If the assets that are impaired constitute the revalued
asset under the IAS 16 or 38, then the impairment loss is considered as decrease in
revaluation and recorded immediately in other comprehensive income statement (De França
et al. 2018). While the reduced values of assets also results in numerical dip in the balance
sheet of a company particularly under the section of total assets.
Answer to question 2:
The value of goodwill on 29th July 2017 stood $465,034 whereas the value of
goodwill on 28th July 2018 stood Nil. The reason for this is that the goodwill that originated
from the acquisition of Myer business amounted to $465 million in 2017 could not be
allocated to the Group’s individual cash generating units (CGU). The same is allocated to the
business of Myer entirely. As per AASB 136, during the accounting period, there was an
indication of impairment because of changes in market conditions and Myer’s operational
performance together with present position of market capitalization.
Answer to question 3:
As per IAS 36 an increase in the short term rate of interest might not possess a
material impact on the discount rate that is used for asset having long remaining useful life
whereas decrease in recoverable value is not to lead in material impairment loss (Devalle and
Rizzato 2017). Myer sources the pre-tax discount rate through recognisable market info and
the risk is adjusted with the net pre-tax cash flow being attained.

3CORPORATE ACCOUNTING
References:
De França, J.A., Pereira, C.C. and Vieira, E.T., 2018. Valuation modellingof impairment of
nonmonetary assetsin business management: ananalytical proposal for IAS 36. International
Journal of Development Research, 8(10), pp.23794-23800.
Devalle, A. and Rizzato, F., 2017. IFRS 3, IAS 36 and disclosure: The determinants of the
quality of Disclosure. GSTF Journal on Business Review (GBR), 2(4).