logo

Accounting Standards and Regulation

   

Added on  2020-02-24

7 Pages1805 Words44 Views
Running head: ACCOUNTING STANDARDS AND REGULATIONAccounting standards and regulationName of the studentName of the universityAuthor note

1ACCOUNTING STANDARDS AND REGULATION Table of ContentsPart A.........................................................................................................................................2Requirement of evidence with regard to testing of impairment.................................................2Part B..........................................................................................................................................3Determination of process for asset impairment.........................................................................3Part C..........................................................................................................................................4Required information for determination of impairment.............................................................4Part D.........................................................................................................................................4Management’s flexibility in impairment determination............................................................4Reference....................................................................................................................................5

2ACCOUNTING STANDARDS AND REGULATION Part ARequirement of evidence with regard to testing of impairmentThe AASB 136 on impairment of assets seeks that the asset of any organization shallnot be recorded in the financial statement at the value which is more than the carrying value.As per Para 10 of the standard, the assets whether it is tangible or intangible and the goodwillmust be tested for impairment at least once in a year. Further, Para 12 of the standard statesthe external as well as internal source of information that can indicate the fact that whetherthe asset shall be tested for impairment or not (Aasb.gov.au 2017). If the internal sources of information are taken into consideration for determining thetest of impairment, asset will be taken into consideration as the major indicator for AASB136. Looking into the financial performance of Myer Holdings Ltd, it is recognized that theoperating revenues of the company is in decreasing trend. The operating revenue of thecompany was highest during 2009 and amounted to $ 32,65,000,000 and after that it starteddeclining and reached $ 27,26,005,000 during 2012. Further, looking at the balance sheet ofthe company, it is identified that the non-current intangible assets of the company was highestduring 2009 and amounted to $ 909,000,000. However, during 2010 there was significantdecrease in the value of intangible and it reached to $ 571,486,000 and the trend wasdecreasing. Moreover, the net profit margin of the company of the company was also indecreasing trend (Investor.myer.com.au 2017).On the contrary, if the external information sources are considered, it is identified thatMyer is planning to restructure their store in Frankston to compete with Amazon. It wasfound that Myer was heading towards significant changes with regard to economic andtechnological environment from Amazon’s entry. As Amazon sells their entire productthrough online, enabling the customers to shop from any corner of the world, the physicalstores of Myer were losing considerable part of their customers. These all facts pushed Myerto change their strategies and look of their stores as well as the uniform of the store staffs(Investor.myer.com.au 2017).

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Evidence required for impairment testing of Myer's asset
|7
|1642
|55

Impairment of asset under AASB 136
|9
|1884
|133

Report on Media Release of ASIC
|11
|1904
|49

22420 - Accounting Standards And Regulations
|9
|1677
|121

Accounting Standard & Regulations | Report Myer Holdings Ltd
|7
|1535
|246

Impairment of Assets in Financial Accounting
|10
|2576
|79