Financial Reporting Disclosures in the Australian Corporate Sector

Running head: FINANCIAL REPORTING DISCLOSURES
Financial Reporting Disclosures in the Australian Corporate Sector
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1FINANCIAL REPORTING DISCLOSURES
Executive Summary:
The current report would focus on write-downs of impairment in the corporate world
of Australia. Hence, Qantas Airways is chosen as the corporate entity, as it is one of the
leading airline companies operating in Australia in terms of fleet size, global flights and
global destinations. It has been assessed that Qantas Airways has not complied effectively
with the relevant disclosure requirements stated in AASB 136, although it has successfully
met all the requirements under general purpose financial reporting, Finally, some suggestions
have been provided to the management of Qantas Airways for enhancing the overall
disclosure quality in future.

2FINANCIAL REPORTING DISCLOSURES
Table of Contents
Introduction:...............................................................................................................................3
a. Impairment write-downs of Qantas Airways:........................................................................3
b. Key issues involved in impairment testing:...........................................................................4
c. Meeting the impairment disclosure requirements as per AASB 136 in the context of Qantas
Airways:.....................................................................................................................................5
d. Aligning the impairment disclosures of Qantas Airways with the objective of general
purpose of financial reporting:...................................................................................................7
Conclusion:................................................................................................................................8
References:.................................................................................................................................9

3FINANCIAL REPORTING DISCLOSURES
Introduction:
In recent times, it is necessary for the corporate entities to deliver useful financial
information to their stakeholders so that they could undertake significant decisions. The
current report would focus on write-downs of impairment in the corporate world of Australia.
Hence, Qantas Airways is chosen as the corporate entity, as it is one of the leading airline
companies operating in Australia in terms of fleet size, global flights and global destinations
(Investor.qantas.com 2018). From the critical viewpoint, the various assets of the
organisation, which are used for impairment testing, have been pointed out and they are
assessed as well. The second portion would emphasise on explaining the various issues that
are faced at the time of impairment test. The third section would ascertain the degree to
which the annual report of the firm satisfies the requirements of impairment disclosure, as per
AASB 136. Finally, the report would lay stress on aligning the disclosures with the objectives
stated in general purpose financial reporting.
a. Impairment write-downs of Qantas Airways:
Based on the annual report of Qantas in 2017, the assets that are tested for
impairment comprise of property, plant and equipment, receivables and intangible assets like
goodwill, slots for airport landing, software, brand names and trademarks, customer contracts
or relationships and contract intangible assets (Investor.qantas.com 2018). In case of
property, plant and equipment, Qantas recognises them at cost minus accumulated
depreciation and impairment. For receivables, impairment is conducted at the time evidence
is collected that the debt could not be recovered (André, Dionysiou and Tsalavoutas 2018).
In case of goodwill and other intangible assets stated above, Qantas recognises
them at cost in the initial stage from which amortisation and impairment losses are
subtracted. All the corporate entities functioning in the market of Australia are needed to
evaluate their assets in order to determine the impairment indicators after each accounting
year and Qantas needs to identify them as well. The main reasons that the organisation
conducts its impairment testing include technological changes, intention of shutting down any
specific operation, fall in value of any asset and economic benefits associated with the assets
(Baboukardos and Rimmel 2014).