Wesfarmers Limited | Report On Organization

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Added on 2020-02-24

Wesfarmers Limited | Report On Organization

Added on 2020-02-24

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By student name ProfessorUniversityDate: 01 September 2017.

Wesfarmers Limited | Report On Organization_1

1ContentsIntroduction ................................................................................2Reporting of PPE.........................................................................3Composition of PPE....................................................................6Methods of depreciation..........................................................7Rates and useful life of depreciation......................................7Amount of depreciation...........................................................8Other reporting..........................................................................8Refrences....................................................................................111 | P a g e

Wesfarmers Limited | Report On Organization_2

2IntroductionWesfarmers Limited is one of the Australian conglomerate founded in 1914 and listed on theAustralian Stock Exchange. It deals in retail, coal mining, fertilizer, chemical and other industrial productsboth in the Australian and in New Zealand markets. It is headquartered in Perth, Western Australia andis one of the largest retail conglomerate in Australia overpowering companies like BHP Billiton andWoolworth in terms of revenue. It is the largest company in the private sector in Australia givingemployment to around 220,000 employees. It started as the Western Australian Farmer’s cooperativeand turned into the listed public company. [ CITATION Jon171 \l 1033 ]Depreciation is one of the major costs affecting the financial results and depends on manyfactors. For a company like Wesfarmers, where there is a huge volume of the fixed assets, it becomesimportant to know how they are classifying the assets into different asset classes, what is the useful lifethey are allocating to the assets and what the quantum of depreciation is. It also becomes interestingthat how the same is disclosed in the financials under the head “property, plant and equipment’s” andwhat is the management estimate and judgements used in this representation; whether there are anyannual true up or revalidation of the estimated useful life of the assets.[ CITATION Rai16 \l 1033 ]As per the revised IFRS reporting and financial management, depreciation can be calculatedeither by straight line method or the written down value method and the cost of the asset needs to beapportioned within the estimated useful life of the asset. In straight-line method, the depreciation iscalculated by dividing the cost of the asset less the salvage value by the estimated useful life of theasset.2 | P a g e

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3Reporting of Plant, property and equipment in the consolidated Balance SheetIn Wesfarmers 2016 financial statements, plant property and equipment, PPE has been reportedunder the head Non-Current Assets in the balance sheet as shown in the figure below. The consolidatedamount for both the current and the previous year has been shown as $ 7,216 Mn in 2016 and $ 7,730in 2015. The detailed reporting has been shown via the notes on accounts. [ CITATION Bae17 \l 1033 ](Source: Annual report, 2016)The payment for the assets bought or purchased in the financial year as well as the saleproceeds from the sale of property, plant, equipment and intangibles is shown under the head “cashflow from investing activities” in the cash flow statement. The respective amounts for 2016 and 2017 are$ 1899 Mn and $ 2239 Mn for purchase and $ 563 Mn and $ 687 Mn respectively from the sale of these.3 | P a g e

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Wesfarmers Limited | Report On Organization