Understanding The Concepts Under the AASB 137 ‘Provisions, Contingent Liabilities and Contingent Assets

Understanding the concepts under
the AASB 137 ‘Provisions,
Contingent Liabilities and
Contingent
Assets

INTRODUCTION
 The two ASX listed companies are Pelican Resource Limited and Rio Tinto PLC.
 Pelican Resource Limited Company is based on mineral exploration from the
region in Western Australia and Philippines, and Rio Tinto PLC Company based
on mining and metals industry in multinational Anglo Australian region.
 In this paper explains about the two ASX listed companies 3year annual report
and their different source of fund, identifying the percentage of funds they
generate internally and externally and the merits and demerits of different
sources of funds.
 the key provision under AASB 137 of their annual reports on provisions,
contingent liabilities and contingent Assets.

SOURCES OF FUNDING
Pelican Resource Ltd
• Shareholder’s fund uses to cover the liability from its assets which
implies that it is good for a company to generate the fund to repay the
debt.
• Revenue is the earning of the income of the company that it attains
from sales of goods and services of a company.
• Security deposits is the extra amount that is to be paid for future
security purpose.

SOURCES OF FUNDING
Rio Tinto Plc
 Retained earnings is a profit that earned after selling a product or any
service is more than its cost of the product.
 Equity is generating amounts by selling the part of shares to investors it
also known as equity funding.
 Borrowings increase the debt of any company and it is used for any new
investment or any acquisition.