Qantas Financial Analysis Report -

Running head: FINANCIAL ANALYSIS OF QANTAS AIRWAYS
BUSINESS ACCOUNTING OF QANTAS AIRWAYS
Name of Student
Name of University
Author’s Note

FINANCIAL ANALYSIS OF QANTAS AIRWAYS
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INTRODUCTION:
The main purpose of this paper is to analyses the composition of income of Qantas
Airways. The paper will also identify the income of Qantas Airways. The paper also shades light
on the importance of GAAP and similar kind of standard boards on Qantas Airways. The
implementation of AASB and IFRS in the financial statement of Qantas Airways has also been
discussed in this paper. To identify the income and its composition in Qantas Airways, the
annual report of 2019 of Qantas Airways has been considered. The impact of AASB and IFRS in
the financial statements of the company from the investor’s perspective has also been discussed.
1. IDENTIFICATION AND COMPOSITION OF INCOME OF QANTAS
AIRWAYS:
As per the annual report of 2019 of Qantas Airways, the main income source of the
company is the passenger and freight. After the analysis of the income statement of Qantas
Airways, it can be determined that the main passenger base of the company is from Australia and
rest is from overseas. The company earns around AUS $11,897 million from Australia and AUS
$4,770 million from overseas passenger. The total income that the company acquired from
passenger and freight is AUS $16,667 million in 2019, which is considerably much higher than
its previous year where the total income from passenger and freight stands at AUS $15,839
million. The annual report of the company also shows that Qantas Airways had acquired income
from other sources (Investor.qantas.com 2020). The company acquired AUS $1,299 in 2019. The
company considers and recognizes the revenue after the service is provided but it becomes
deferred on the balance sheet as the revenue received in advance. The company considered
Frequent Flyer marketing revenue and other loyalty business, store and redemption revenue,

FINANCIAL ANALYSIS OF QANTAS AIRWAYS
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third part services revenue and other income under the head of other revenue and income. As per
the analysis of the income statement of 2019 of Qantas Airways it can be determined that
frequent flyer marketing revenue and other loyalty business of the company stands at AUS $441
million, which is higher in comparison to previous year where the value stands at AUS $405
million. The company also acquired income from store and other redemption revenue stands at
AUS $149 million in 2019. The company also acquired third party services revenue of AUS
$340 million in 2019. The other income part of the company stands at AUS $369 million
(Iatridis 2014).
The company also acquired some revenue from the interest income on the financial assets
and unwind discount on receivables. The total financial income of the company in 2019 stands at

FINANCIAL ANALYSIS OF QANTAS AIRWAYS
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AUS $48 million, among which the AUS $42 million fetched from interests income on the
financial assets and AUS $5 million from unwind discount on receivables (Investor.qantas.com
2020).
RECOGNITION AND MEASUREMENT OF INCOME:
Qantas Airways recognizes revenue based on AASB 13 and IFRS 13. Both the standards indicate
about the Fair Value measurement that the company needs to incorporate while measuring the
revenue and income of the company within a period of time. The presence of the measurement of
the income can also be found in section 334 of Corporation Act 2001. As per the standard the
fair value of the company can be stated as the market-based measurement. The definition of fair
value can defined as the price that the company gains after selling any asset or paid by the
company to transfer a liability in a chronological manner. The company also follows historical
cost measurement while acquiring the asset from other company. The fair value measurement
concept assists the company to provide an accurate valuation and it also considered to be the best
measurement that is famous to assists the company to survive in the time of economic crunch.
The company also considers the historical cost while measuring the worth of assets and liabilities