International Financial Reporting Standards PDF

International Financial
Reporting Standards
International Financial Reporting Standards
International Financial Reporting Standards

Table of Contents
INTRODUCTION..........................................................................................................3
Answer Given For Question No-1.................................................................................3
Answer Given For Question No 2 (a)...........................................................................4
Answer Given For Question No 2(b).........................................................................6
Answer Given For Question No (2) c).......................................................................8
CONCLUSION..............................................................................................................9
REFERENCES...........................................................................................................10

INTRODUCTION
The current report is depicting the financial reporting requirements that are
laid by the International Financial Reporting Standards (IFRS). The analysis that is
done in the report is on a company which is listed in London Stock Exchange on the
FTSE 100. The report is presented in a format that first introduces the company and
then forms an analysis of the overall financial accounts. The discussion is revolved
basically around a few IAS that are adopted and moulded in accordance with the
IFRS requirements. The main IAS discussed in the report comprises of IAS 36, IAS
32, IAS 39, and IAS 19. The accounting policies relevant to these IAS are also
discussed. A conclusion is presented in the end of the report that deals with the
relevance of the accounting and reporting framework that is adopted in the selected
company.
Answer Given For Question No-1
The company chosen is BHP Billiton Plc. The company deals in resource extraction
and their processing. The extraction and processing of the gas, oil, and minerals is
done. The company’s headquarters are located in Melbourne in Australia (Epstein,
2018). The main subsidiaries of the company in United Kingdom are:
Auvernier Limited
BHP Billiton Agnew Mining Company Pty Ltd
BHP Billiton Aluminium Projects (Pty) Ltd
BHP Billiton Australia Investment 3 Pty Ltd
BHP Billiton Energy Coal (UK) Limited
BHP Billiton Energy Coal Chile Limited

BHP Billiton Group Limited (Burritt, and Christ, 2018).
As far as the regulatory framework of the company is discussed the company is
following the international standards well. The operations are done in line with the
requirements set by the corporation laws lay in market. The financial statements are
prepared on the basis of the UK Companies Act 2006 (Sheth, and Sinha, 2015).
Answer Given For Question No 2 (a)
The company as discussed above is in the line of extraction and processing. The
main product areas dealt by the company are in coal, petroleum, copper, and iron
ore. These are the areas that generate cash for the company. Hence, the company
has selected the cash generating units on the basis of these production areas of
business for impairment purposes (Linnenluecke, et al. 2015).
The management assesses the cash flows for the purpose of impairment review by
the following ways:
The foreign exchange flows from and into business are substantially watched.
The cash flow projections that have been made for the financial year’s performance
must be compared with the actual cash flow position (Banker, Basu ̧ Byzalov, 2016).
The market capitalisation of the assets of the company is required to be compared
with the carrying value of the same that is represented in the balance sheet
(Bostwick, Krieger, and Lambert, 2016).
The various indicators that existed on the balance sheet date depicting the necessity
of impairment comprises of both internal and external indicators. The internal
indicators in case of BHP Billiton comprises of the carrying value of the asset being
lower than the amount that can be achieved on sale of the asset. The external