Analysis of Provisions, Contingencies, Leased Items and Valuation of Non-Current Assets in Fairfax Media's Annual Report

Fairfax Media Limited is the company listed in the Australian Stock Exchange. It is operating
number of businesses around the assets of entertainment and the information. It has its operations
in the Australia as well as New Zealand. For the purpose of this Essay the annual report for the
year ending 25th of June 2017 have been analysed and all the eight requirements have been
detailed and discussed.
Provisions and contingencies recorded or disclosed:
Note number 13 and note number 22 of the annual report of the company has prescribed the
details of the provisions and the contingencies (Company Official Website, 2017).
In case of the provisions, the company has divided the provisions into current and noncurrent
provisions. Under the head of the current provisions, four sub heads are there. These are:
- Employee benefits
- Restructuring and Redundancy
- Property and
- Other
As per the accounting policies adopted by the company, the provisions are recognized when the
group has the lawful obligation to make sacrifice of the economic benefits in the future as a
result of the transactions that has been occurred in the past (Company Official Website, 2017).

In case of the contingencies, two heads have been created. One is the Guarantees and the other
one is the defamation. No amount has been shown under the head of the contingencies. The main
reason for showing the nil amount of guarantee is that no deficiency has been countered by the
company. Similarly for the defamation form of contingency no suit has been received by the
company from any of the party to the company.
Recognition Criteria and Measurement issues
Provisions - The provisions are valued and calculated using the discounted cash flow technique.
The discounted cash flow technique is applied to the expenditure which is calculated and
identified by the management using their best judgment. The discount rate which has been used
by the company is equivalent to the risk free rate of government or corporate bond rate. The
company has used the discount rate which is pre tax if the time value of money is important
(AASB, 2010). A provision for the dividend has not been calculated because of the fact that