Financial Accounting Analysis of Ansell Ltd. 2016 Financial Statement

Running head: FINANCIAL ACCOUNTING
Financial Accounting
Name of Student:
Name of University:
Author’s Note:

1FINANCIAL ACCOUNTING
Table of Contents
Part 1................................................................................................................................................2
Part 2................................................................................................................................................2
Introduction......................................................................................................................................2
Task 1: Analysis of Expenses..........................................................................................................2
a. Determination of expenses.......................................................................................................2
b. Reasons for different method of classification of expenses used by the company.................3
Task 2: Accounting Policy...............................................................................................................3
Task 3: Notes to the 2016 financial statement.................................................................................5
a. Cost of plant, properties and equipment..................................................................................5
b. Depreciation amount................................................................................................................5
c. Depreciation period..................................................................................................................6
d. Depreciation method................................................................................................................7
e. Impairment...............................................................................................................................8
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

2FINANCIAL ACCOUNTING
Part 1
a. Name of the company - Ansell Ltd.
b. Annual Report Web Link-
http://sc-cdn-prod.azureedge.net/-/media/Corporate/MainWebsite/About/Investor-Center/
Annual-Report-2016/Annual-Report-to-Shareholders-2016.pdf?
la=en&modified=20160826151358
c. Current Share Price of the company- AUD 26.1
Part 2
Introduction
Ansell Ltd. Is recognised as the global leader in terms of facilitating the various types of
the safety equipment. The development and design of the manufacturing activities are considered
with the range of activities which includes increasing demand from the customers. Some of the
various types of the important products of the company has been seen to be ranging from
“industry gloves and sleeve, medical grade glove, protective clothing and medical safety
devices”. The discourse of the study has been seen to be considered with various types of the
facets which are seen to be considered with the expenses for Ansell Ltd. The other evaluations of
the study have been able to focus on the different rationale for the classification of the expenses.
The second part of the report has been further able to consider the relevant disclosures associated
to the accounting policies and changes in the accounting estimates and presence of the any error.
The final section of the study has made use of the financial notes in the annual report to depict
the relevant treatment of depreciation (Ansell.com 2018).
Task 1: Analysis of Expenses
a. Determination of expenses
The significant considerations in the financial statement of Ansell Ltd. has followed the
income statement preparation by considering the function of expenses. Therefore, the disclosure
of the expenses is seen to be based on the functions such as “distribution, cost of goods sold,

3FINANCIAL ACCOUNTING
selling, general and administration expenses”. The calculation procedure of the expenses applied
with the multistep format is seen with the disclosure of the individual expenses as per each
function (Jack 2015).
Figure: Expenses classified by function for Ansell Ltd.
(Source: Sc-cdn-prod.azureedge.net. 2018)
b. Reasons for different method of classification of expenses used by the company
The main rationale for expenses is considered with the simplicity of the presentation
structured followed in the report. The small organizations tend to prefer disclosure associated to
the expenses based on the single step income statement. Therefore, the disclosing of the expenses
by nature which is more relevant in terms of following the expenses as function. The main
rationale for the classification of the expenses based on the functional role of in the bigger
multinationals in order to monitor the direct units which are assigned immediately to the
individual outputs, premium, rewards, material consumption directly associated to the outputs.
Moreover, the use of simple method of single step is considered with the presentation of the
expenses with the individual items like as “beginning inventory, purchases, rent expense,
depreciation expense, supplies expense, utilities expense, interest expense and purchases”
(Kallamu, Ashikin and Saat 2015).
Task 2: Accounting Policy
The compliance statement of the accounting policy is recognised as per the principles
which are stated in the “Australian Accounting Standards adopted by the Australian Accounting
Standards Board (AASB) and the Corporations Act 2001”. Moreover, it is further discerned that