Contemporary Financial Reporting

Running head: CONTEMPORARY FINANCIAL REPORTING
Contemporary financial reporting
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1CONTEMPORARY FINANCIAL REPORTING
Table of Contents
3. Leases.....................................................................................................................................2
4. Accounting for tax..................................................................................................................3
Reference....................................................................................................................................5

2CONTEMPORARY FINANCIAL REPORTING
3. Leases
Value of leased asset reported by Woolworths Group Limited for the year ended 2018
is $22,904 million as against $24,439 million for the year 2017. The company segregates the
lease as finance lease when terms of the lease substantially transfers all the rewards and risks
related to ownership of asset to lessee (Aasb.gov.au 2019). Leases those are not accounted as
finance lease are accounted as operating lease. Operating lease payments are reported as
expenses on straight line basis over the term of lease. Any increase in fixed rate for payments
related to lease rental excluding the index or contingent based rental increase are reported on
the straight line method. Incentives received from operating leases are recognised as liability
initially and then it is recognised as the part of lease expenses on straight line method over
term of lease (Woolworthsgroup.com.au 2019).
Value of leased asset reported by Wesfarmers Limited for the year ended 2018 is $
18,373 million as against $ 19,565 million for the year 2017. On the other hand, the
competitor Wesfarmers segregates the leases as finance lease and operating lease based on
whether the company substantially holds all rewards and risks associated with ownership or
not (Aasb.gov.au 2019). While assessing this, primarily the entity considers the ownership of
asset at closing of the lease term, purchases options if any, lease term associated with the life
of the asset and present value of the future lease payments (Group 2019).
From the above table it can be for both the companies lease asset amount for the year
2018 has been reduced as compared to the year 2017. Reduction for Woolworths with regard
to amount of leased asset was by 6.28% whereas the reduction for Wesfarmers with regard to