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Essay on Financial Reporting

   

Added on  2021-05-31

14 Pages2227 Words111 Views
Running head: FINANCIAL REPORTINGFinancial ReportingName of the Student:Name of the University:Author’s Note:Course ID:

1FINANCIAL REPORTINGTable of ContentsIntroduction:....................................................................................................................................21. Provisions and contingencies:......................................................................................................22. Recognition criteria and measurement issues related to provisions and contingencies:.............33. Arguments for and against the record of contingency in the financial report:............................54. Details of leased items:................................................................................................................65. Classification and presentation requirements related to leased items:........................................76. Reclassification of leased items:..................................................................................................97. Valuation method of non-current asset:.......................................................................................98. Alternative valuation method of non-current asset:...................................................................10Conclusion:....................................................................................................................................10References:....................................................................................................................................12

2FINANCIAL REPORTINGIntroduction:The current essay deals with the issue by evaluating the financial statements of GWAGroup Limited for ascertaining whether the accounting reports are developed in accordance withthe stated standards in order to ascertain their overall reliability. The annual report of theorganisation is evaluated for highlight the significant aspects mentioned in the paper. The essayintends to provide an in-depth understanding and evaluation of the financial statements of theorganisation. 1. Provisions and contingencies:The contingencies reported in the financial statements of the business organisations aresub-divided into various financial elements. According to Amiram et al. (2018), contingenciesdenote those assets and liabilities, which are not accounted, since they have taken place due toemergency situation. The primary component that could be identified under contingency sectionin the annual report of the organisation is guarantees. The contract of financial guarantee isrecognised in the form of liability, which is in the nature of finance when the guarantee is issued.This liability is gauged at the fair value approach in compliance with the standards of “AustralianAccounting Standards Board (AASB)”. More specifically, the standard used is “AASB 137Provisions, Contingent Assets and Contingent Liabilities”. The financial element taken into account includes the capital expenditure commitments.Capital expenditure commitments are those, in which the parent entity is required to enter intocontractual agreements for the wholly-owned subsidiaries in relation to acquisition of property,

3FINANCIAL REPORTINGplant and equipment. GWA Group Limited has disclosed no such commitments based on its2017 annual report. The final financial element disclosed in the annual report is contingent liability, which isrelated to the terminated agreement. As of 2017, the organisation has not realised any contingentliability. In case of provisions, the main items that are realised include warranties, restructuring,site restoration and other and the total amount of provisions in 2017 have been reported as$12,861,000.

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