Financial Reporting of Panoramic Resources Limited

Running head: FINANCIAL REPORTING
Financial reporting
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1FINANCIAL REPORTING
Introduction
Panoramic Resources Limited is the ASX listed mining company located in Western
Australia. The company was formed in the year 2001 to develop the Savannah Nickel Project
in East Kimberley. In addition to substantial copper, nickel and cobalt inventory in Savannah,
the entity has diversified resource base for gold and platinum group metals. Its vision is to
broaden the exploration and base of production with aim of becoming the diversified and
major mining company in S&P/ASX 100 index. The main purpose of the essay is to focus on
the financial statement preparation requirement of the entity and will cover various aspects.
These aspects will cover the reporting of non-current assets, intangible assets, provisions and
contingencies, leased items and revenue. Based on the discussion regarding the reporting of
the mentioned item the essay will finally provide the conclusion (Panoramicresources.com
2019).
Property, plant and equipment (PPE)
One of non-current assets reported by the entity under the balance sheet for the year
ended 30th June 2018 is property, plant and equipment. The item is recorded at $ 10,630,000.
The entity recognises PPE in its books at its cost and the amount is reduced by the amount of
accumulated depreciation and if any impairment charges applied. Construction costs of the
PPE made by the consolidated entity are inclusive of the cost of direct labour and material.
Proportion of the overheads and other associated costs those are attributable directly to the
construction also are capitalised to cost of PPE. Further the cost expensed on PPE following
to the initial acquisition are capitalised if it is apparent that the economic benefits in future
exceeding the original performance of the assets will be flown to the entity. Where these
mentioned costs determine the distinct components for the complex asset, they are recognized
as the separate assets and are depreciated separately over the useful lives of the asset. Further,

2FINANCIAL REPORTING
the costs incurred on PPE those do not meet capitalisation criteria are expensed as and when
incurred (Aasb.gov.au 2019).
Any other method that can be used for valuation of PPE as against the cost value is
the fair market value. However, the asset is examined at regular basis for providing the
impairment and is depreciated each year using the prescribed method and percentage.
However, if the fair market value is used the asset cannot be provided depreciation and the
entity will face difficulty in accumulating the fund when it will be the time to replace the
asset. Hence, taking into consideration all these facts, recording the assets at cost reduced by
depreciation and appropriate impairment value, if any (Panoramicresources.com 2019).
Intangible assets
Intangible assets are considered as the long term resources for the entity that does not
have any physical existence. It includes the assets such as name recognition, reputation,
intellectual property like know how and knowledge. Intangible assets derive its value from
intellectual and legal rights from any value they add on to other assets (Bianchi 2017).
However, the intangible assets in normal business scenario cannot be used as collateral for
raising loans or some of the assets like goodwill can be destroyed through business failures or
carelessness in carrying out the business. If the tangible assets add value to the entity it will
be considered as adding value to the future worth. Approximate monetary value of the
company’s intangible asset is measured through deducting net value of the intangible asset
from the market value (Nagaraja and Vinay 2016). However, going through the annual report
of Panoramic Resources Limited dated on 30th June 2018, it is observed that the company did
not record any intangible asset under the balance sheet.
Provision, contingent liabilities and contingent assets