Effects of Changes in Retail Industry on Shopping Centres Australia Property Group

Running head: FINANCIAL ACCOUNTING AND REPORTING
Financial Accounting and Reporting
Name of the Student
Name of the University
Author’s Note

FINANCIAL ACCOUNTING AND REPORTING1
Executive Summary
This report undertakes analysing the effects of the changes in retail industry on the operations
of Shopping Centres Australia Property Group (SCP). This report sheds light on the
requirements of AASB 140 related to the investment properties. The discussion on
management flexibility is another major aim of the report. Analysis shows that these changes
in retail industry have certain negative impact and economic consequences on the financial
statements of these two companies.

FINANCIAL ACCOUNTING AND REPORTING2
Introduction
The presence of certain changes in the Australian retail industry can be seen in the
recent years leaving certain negative financial as well as economic impacts on the companies
operating in this industry. The main aim of this report is to analyse as well as evaluate the
impact of the changes in retain industry on the business operations of Shopping Centres
Australia Property Group (SCP). First part of the report identifies as well as summarizes the
standards of AASB 140 Property Investment. The next part discusses about the flexibility of
the management in the determination of the investment property value. The last two parts of
the report analyses the impact and economic consequences of the changes in retail industry
on the financial reports of SCP.
Accounting Policies related to Investment Properties
The management of SCP has certain obligations to follows certain standards and
principles related to the investment properties and their regulations. In Australia, the ASX
listed companies are needed to comply with the principles of AASB 140 Investment
Properties related to the investment properties and the same is applicable for SCP
(aasb.gov.au, 2019). Different parts of this standard are discussed below.
According to AASB 140, Section 2, the management of SCP is needed to apply this
standard for the recognition, measurement and disclosure of investment property. As per
AASB 140, Section 3, among the other things, SCP can apply this standard in the lease
financial statements of investment property. As per AASB 140, Section 5, Investment
Property can be considered as the property that the companies held for earning rentals or for
capital appreciation or both rather than for utilization in the supply or production of goods or
services or for administrative purposes and for the sales in the ordinary business course
(aasb.gov.au, 2019).