A New Era for Heritage Sites

The assignment content discusses the importance of heritage sites as assets that can boost the economy of an area through tourism and commercialization. It also presents journal entries related to biological assets, harvesting of agriculture produce, and sales transactions, which are governed by accounting standards AASB 141, AASB 116, and Deegan (2013). Additionally, it provides segment reporting for profit, revenue, and asset statements, which complies with the disclosure notes of AASB 8.

Running head: CORPORATE ACCOUNTING
Corporate Accounting
Student’s Name
Course Code

1
CORPORATE ACCOUNTING
Question 1
Climate change has been in vogue for Financial Institutions recently (Deegan
2013).Climate resistance and low carbon has been given emphasis. Mainstream financing has
been the platform for climate issues. Formulation of national and international policies can be
made for industries to be transparent. Capacitating the industries to make changes for climate
issues is the next target. All like-minded investors have been grouping to collaborate for the
climate change for capital inflow. Climate change is risky for economy and hence for investment
sector as whole.
Ethical investment which is called Socially Responsible Investments has developed
recently. Investors are seen reluctant in investing in ventures of arms or alcohol which are of
hostile nature. Now investment is being done on merits of goods that are environmental
protection, ethical employment, recycling and conservation (Deegan 2013). Ethical investors
follow activism in which they convince each other to make positive amendments in the type of
their investments. They do not restrict any investment strategy but modify it for gaining
sustainability in the business.

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CORPORATE ACCOUNTING
Question 2
There are several policies and procedures published by the government of country for
corporate to maintain the sustainability of the companies within that particular territories. Since
1980’s companies are bound to fulfill responsibilities towards society and environment.
Company is liable for the adverse effects of noise and chemicals produced towards environment.
But it can be managed by the benefits of employment given to the local citizens without any
legal compliance.
CSR is to be held up by every organization to show their concern towards society and
environment. Health campaigns should be organized to tackle the issues created due to noise and
chemicals. It may incur cost to the company but its benefits are more farfetched. A CSR
committee can be made to organize these activities and manage affairs with the government as
per requirement. Sustainability report should be published each year as per the amendments of
authorities and government. CSR activities should comply with GRI norms.

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CORPORATE ACCOUNTING
Question 3
 The $50,000 has been spent on development of general understanding of water flow
dynamics would be considered as research and will be written off as incurred.
 The $30,000 spent for the purpose of knowledge gathering of surfboard which is
expected from local surfers will be considered as research and would be written off as
incurred.
 There are $90,000 and $1, 90,000 have been spent on testing and refining and prototype
has been considered as development expenditure will be capitalized.


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CORPORATE ACCOUNTING
Question 4
A. Intangible asset’s value determination
Particulars $ Million
Patents at director's valuation 160
Less. Accumulated amortization -40
120
Trademarks, at cost 15
Goodwill. At cost 50
Less. Accumulated amortization -10
40
Brand Name 100
License, At cost 10
Less. Accumulated amortization -1
9
Patent acquired cost is $80 million for 16 years = $80/16 = $5 million
Paid for 4 years = ($5 million*4) = $20 million
As per the accounting standard AASB 138, intangible assets can be recognized in the
accounting statement in specific scenario, firstly when future economic benefits from the
recognized assets are probable or cost of the recognized assets can be measured reliably.
B. As per the accounting standard AASB 138, an intangible asset cost less accumulated
amortization or accumulated impairment losses at a revalued cost. As per the above
mentioned analysis, it is measured that patents were acquired at a cost of $80 million
initially which is revalued as per standards accordingly. It is estimated that life of the
acquired machinery will be 16 years in which 12 years is still left. According to AASB
138, the revaluation should be considered on the basis of fair valuation of asset. If the
produce are homogenous and buyers / Sellers are easily available in the market within
predetermined price.

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CORPORATE ACCOUNTING
Patent at cost-Accumulated amortization (4 years out of total 16 years life)
Net carrying value = (80 million-20 million =60 million)
Trade Mark
As per the accounting standard AASB 138, Intangible assets with indefinite useful life
are not subject to amortize, there are always possibility that trademark can be renewed
indefinitely will be considered as cost less impairment losses. Initially the intangible assets are
recognized as expenditure but afterwards it is a part of cost incurred by the company.
Goodwill
As per AASB 138, goodwill is an intangible asset which has been purchased and
amortized on the basis of straight line depreciation method. Goodwill is only recognized when it
is externally acquired by the companies. It is always considered the goodwill at cost after
deduction of accumulated amortization.

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CORPORATE ACCOUNTING
Question 5
A. Value determination of deferred assets and deferred liabilities within given
accounting periods.
Company
Act
IT Act Differen
ce
Tax
@30%
DTA or
DTL
Year Machinery
value
Depreciation
40%
Machinery
Value
Depreciation
60%
2015 $
2,50,000.00
$
1,00,000.00
$
2,50,000.00
$
1,50,000.00
$
50,000.0
0
$
15,000.0
0
DTL
2016 $
1,50,000.00
$
60,000.00
$
1,00,000.00
$
60,000.00
$0.00 $
-
NA
2017 $
90,000.00
$
36,000.00
$
40,000.00
$
24,000.00
-
$12,000.
00
$ -
3,600.00
DTA
2018 $
54,000.00
$
21,600.00
$
16,000.00
$
9,600.00
-
$12,000.
00
$ -
3,600.00
DTA
2019 $
32,400.00
$
12,960.00
$
6,400.00
$
3,840.00
-
$9,120.0
0
$ -
2,736.00
DTA
Particulars Dr Cr
Profit &loss A/c $ 15,000.00
Deferred tax liability $ 15,000.00
B. Balance of deferred tax assets 30 June 2018
Particulars Dr Cr
Deferred tax assets $ -3600.00
Profit &loss A/c $ -3600.00

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CORPORATE ACCOUNTING
Question 6
Journal entries to account for tax as per accounting standard AASB 112
Particulars Debit Credit
$ $
(1) Income tax expense 24 000
Tax payable 24 000
(2) Profit and loss 24 000
Income tax expense 24 000
(3) Profit and loss 56 000
Retained earnings 56 000
Workings:
Fair valuation of the plant is $ 4, 00,000 - Accumulated depreciation $80,000 = $3, 20,000
Total tax payable = ($80,000*30%) = $24,000
Retained earnings = ($80,000-$24,000) = $56,000

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CORPORATE ACCOUNTING
Question 7
Heritage Assets strengthen the economy. Their significance is much more than being a
tourist destination. Jobs are generated by their development as the number of visitors increase.
Creation of jobs improves the condition of economy of that place (Deegan 2013). Cost incurred
in maintenance of assets should be seen as an investment. Prime investors are private players,
government and municipality for its upkeep. After investment is gives handsome returns and
profits. When the Heritage place becomes famous business opportunities start to grow. Shops,
restaurants and street vendors thrive in that area.
Legacy of the heritage becomes center of attraction. Heritage Sites have been converted
into government offices in many places successfully. Due to commercialization of the locality
the quality and amount of business grows which helps the economy to flourish (Deegan
2013).Hence it can be said that these heritage places are assets and not liabilities as they do
wonders to add to the economy of that area.

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CORPORATE ACCOUNTING
Question 8
A. Cost incurred for the maintenance of biological assets 30 June 2019
Particulars Dr Cr
Expenses A/c (Fertilizer, salaries and etc.) 50,000
Cash/Accounts Payable 50,000
As per the accounting standards AASB 141, the amount which is capitalized for the
measurement of biological assets on initial recognition at the end of a reporting period, when the
fair value of the product is lesser than estimated costs to sell.
B. Harvesting of agriculture produce 23 June 2019
Particulars Dr Cr
Inventory 2,20,000
Gain arising on recognition of harvested apples 2,20,000
There are two different paragraph of AASB 141 has been considered for the above
mentioned journal entries.
According to paragraph 13 any harvested agriculture produce can be considered as
biological assets with the measurement when fair value of the produce will be lesser than
estimated sell value of the product.
On the other hand, as per the paragraph 28, if any losses or gain occurs at the initial
recognition of any agriculture produce when the fair value of the product is lesser than estimated
sell cost will be included in the surplus and deficit of the financial statement on that particular
accounting period.

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CORPORATE ACCOUNTING
Particulars Dr Cr
Picking and packing cost 15,000
Cash 15,000
 The packaging and produce picking costs shall be treated as a cost of the period
but not considered as a cost to sell, which can be only offset against inventory
cost for that particular accounting period.
C. Sell of the agriculture product 23rd June 2019
Particulars Dr Cr
Cash A/c 2,10,000
Sales A/c 2,10,000
Particulars Dr Cr
Selling cost 3,000
Cash Receivable 3,000
Transaction on 30th June 2019
Particulars Dr Cr
Cost of goods sold 21,000
Inventories 21,000
Total sell of that period is equal to 2, 10,000 and selling cost is 3000
And inventory cost will be considered 10% of total sales of that period are equal to 21000.

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CORPORATE ACCOUNTING
D. Changes in fair value of the biological assets of harvested produce at the end of the two
accounting period.
Particulars Dr Cr
Mango (Produce) 70,000
Revaluation (Surplus) 70,000
The fair value price changes will be considered under accounting standard AASB 116,
according to which it is suggested that revaluation model is more considerable than cost model
for harvested produce without considering taxation related effects.

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CORPORATE ACCOUNTING
Question 9
Implications passed for the quantitative tests given in the paragraph 13 of AASB are
following:
 Profit on absolute amount is 10% of the reported combined profit for operating segments
without any loss record (Deegan 2013).
 Declared assets earn 10% profit on combined assets of operational segments.
 Listed revenue in operational segments is less than 70% of reportable segments. These
will not comply with paragraph 13 if applied (Deegan 2013).
 If reportable segment of operation is identified as significant by management then it
should be immediately reported if it is not in compliance with Paragraph 13.
Reportable operational segments in real-time comply with quantitative threshold then
previous fragmented data for comparison should be recurring to masquerade into individual
fragment even if it differs from Paragraph 13 (Deegan 2013).

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CORPORATE ACCOUNTING
Question 10
Segment reporting for Profit & Loss statement
Profit and loss A/c before income tax by operating segment
Segments Profit Losses (Total*10%) Status
Entertainment 100 14 Reportable
Clothing 20 14 Reportable
Food 10
Agriculture 20 14 Reportable
General corporate expenses 10
Total 140
Segment Reporting for Revenue statement
Revenue Test ($000)
Segments Revenue (Total*10%) Status
Entertainment 650 66% Reportable
Clothing 80 8%
Food 200 20% Reportable
Agriculture 50 5%
Total 980 100% Reportable
Segment reporting for Asset statement
Assets by operating segments ($000)
Segments Assets (Total*10%) Status
Entertainment 800 59% Reportable
Clothing 300 22% Reportable
Food 100 7%
Agriculture 110 8%
General corporate expenses 50 4%
Total 1360 100% Reportable
As per the disclosure notes of AASB 8, if total value of a particular segment is 10% or
greater than total value of provided amount will be considered as reportable value. This
reportable will be represented in percentage (Deegan 2013). According to above mentioned
table entertainment, agriculture and clothing is reportable in profit and loss statement due to
higher percentage which is greater than 10%. On the other hand, in the revenue statement

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CORPORATE ACCOUNTING
entertainment and food segments are highly reportable whereas, in the assets statement
entertainment again with clothing segment is reportable.

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CORPORATE ACCOUNTING
References
Bebbington, J., Unerman, J. and O'Dwyer, B. eds., 2014. Sustainability accounting and
accountability. Routledge.
Deegan, C., 2013. Financial accounting theory. McGraw-Hill Education Australia.