Evaluation of Financial Statements for EVZ Ltd

Running head: FINANCIAL REPORTING
Financial Reporting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

1FINANCIAL REPORTING
Table of Contents
Introduction:....................................................................................................................................2
1. Provisions and contingencies:......................................................................................................2
2. Recognition criteria and measurement issues related to provisions and contingencies:.............3
3. Arguments for and against the record of contingency in the financial report:............................5
4. Details of leased items:................................................................................................................6
5. Classification and presentation requirements related to leased items:........................................7
6. Reclassification of leased items:..................................................................................................8
7. Valuation method of non-current asset:.......................................................................................8
8. Alternative valuation method of non-current asset:.....................................................................9
Conclusion:....................................................................................................................................10
References......................................................................................................................................11

2FINANCIAL REPORTING
Introduction:
The discourse of the essay has stated about evaluation of financial statements for EVZ
Ltd for determining whether the accounting principles adopted by the company are in
compliance with the stated standards. This has been able to ascertain the overall reliability in the
report. In addition to this, the main facts from the annual report are established with an in-depth
understanding and determination of appropriate facts as for the evaluation of financial
statements.
1. Provisions and contingencies:
The contingent liabilities of the company are recognised as per the fair value for ensuring
the most reliable measurement. In addition to this, any obligation associated to contingent
consideration is classified under either equity instrument or financial liability based on the nature
of arrangement. In addition to this, the right to refund have been previously discerned to be
recognised as receivable in nature subsequently, the initial assessment of contingent
consideration which are categorised as equity is not really measured and settled within the equity
of the company. Moreover, the contingent consideration is classified as liability or asset which
are re-measured the end of each financial year to fair value “statement of comprehensive income
or profit and loss” unless the change in values are considered it existing date of acquisition
(Evz.com.au 2018).
The provisions associated to contingencies have been stated with property leases which have
contingent went on provision within the legal agreement and are required to be considered for

3FINANCIAL REPORTING
minimum lease payment. “Apart from drawn bank guarantee facilities” the company did not
have any “contingent liabilities as at 30 June 2017” (Barth 2018).
2. Recognition criteria and measurement issues related to provisions and contingencies:
All the important conditions associated to recognition and measurement of issues have
been considered with the provision for contingencies as stated below:
Guarantees:
The main standard for recognition of guarantees in the annual report with specific
reference to the liability of guarantees has been conducted with of “fair value method” as
described under AASB 137.
Capital expenditure commitments:
The company has made several key assumptions for including the value in use
calculation with gross margin and additional allowances for any potential capital expenditure