Financial Reporting: Contingencies, Provisions, Leased Items, Non-current Assets

Running head: FINANCIAL REPORTING
Financial reporting
Name of the Student:
Name of the University:
Author Note

1FINANCIAL REPORTING
Table of Contents
Introduction:....................................................................................................................................2
1. discussion on Contingencies and Provisions reported by organization:......................................2
2. Recognition Criteria and Measurement issues associated with provision or contingent liability
.........................................................................................................................................................3
3. Disclosure of specific Contingency recorded by company:........................................................3
4. Details of disclosure of leased items recorded by company:.......................................................3
5. Presentation and classification of leased items and explanation of Treatment of leases:............4
6. Hypothetical situation depicting reclassification of leased items:...............................................5
7. Disclosure of Non-current asset – impairment method..............................................................6
8. Valuation Method for Non Current Assets with reference to quantitative characteristics:.........6
Conclusion:......................................................................................................................................6
References list:.................................................................................................................................6

2FINANCIAL REPORTING
Introduction:
The report is prepared for addressing the accounting statements elements of Fairfax
limited by reviewing its annual report. It intends to evaluate whether the financial statement are
prepared in adherence to the accounting standards recommended by Australian accounting
standard board. Analysis of accounts is done by extracting the data from annual reports of the
financial year 2017.
1. Discussion on Contingencies and Provisions reported by organization:
Contingent refers to the liabilities and assets that has arrived from any unforeseen
circumstance or have occurred on urgent basis and they are not accounted in the business.
Contingencies are disclosed in the financial statements by way of segregation of components of
financial statements. For Fairfax limited, disclosure of contingency is done under the heading
defamation and guarantees. Amount of the contingent liabilities are less of net GST amount that
is recoverable and payable to the authority taxation (Fairfax.ca, 2018).

3FINANCIAL REPORTING
Provisions:
(Source: Fairfax.ca 2018)
Group recognizes the provisions resulting from constructive of legal obligations that
arises from past transactions or events. Organization does not have any provision for future
operating lease. Any risks associated with provision make use of discount rate for factoring the
cash flow. No provision is made for division as liability if there is no declaration of dividend.
2. Recognition Criteria and Measurement issues associated with provision or contingent
liability
AASB 137 forms the basis for determining the carrying value of guarantees that is
measured at fair value. If there is any defamation or matters arising in the ordinary business
course would lead to reporting entity being sued. Provision on other hand is measures are based
on estimates that are used for settling the obligations pertaining to entity in the current period.