MCR004ABC: Accounting for Non-Current Assets of Coca-Cola Amatil

This report provides an in-depth analysis of Coca-Cola Amatil's accounting practices for non-current assets. It examines the recognition, measurement, and depreciation of property, plant, and equipment, including freehold and leasehold land and buildings, as well as plant and equipment. The report also covers intangible assets such as brand names, trademarks, goodwill, and software development. Furthermore, it explores the accounting treatment of investments, defined benefit superannuation plans, derivatives, and loan receivables. The study highlights Coca-Cola's use of the cost method for reporting non-current assets and fair value for initial recognition, along with the application of impairment testing and the consideration of historical experience in estimating asset useful lives. The report references Coca-Cola Amatil's 2018 Annual Report and provides a comprehensive overview of the company's financial reporting related to its assets.

ACCOUNTING SYSTEMS
AND PROCESSES
Accounting for Non-Current
Assets of Coca-Cola

OVEREVIEW OF COCA
COLA

COMPANY OVERVIEW
 Coca-Cola Amatil is one of the Asia-Pacific’s largest bottlers and
distributors of non-alcoholic and non-alcoholic beverages.
 Coca-Cola Amatil has an employee base of around 12,000
 It has its presence in Australia, New Zealand, Indonesia, Papua New
Guinea, Fiji and Samoa.
 The company work together across a diversified group of
businesses with the help of its world-class manufacturing as well as
sales capabilities

VISION AND VALUES
VISION – To provide the customers with exceptional portfolio of brands while
sharing values and ensuring growth of the customers. In the community, the
vision is to make positive contribution while creating value for the Partners. For
the shareholders, the vision is to ensure attractive sustainable return.
VALUES – Coca-Cola has three simple values that drives their success; they are
as follows:
o To be straightforward and open
o To take initiative and own the outcome
o To focus on today and tomorrow

STRATEGY
Coca-Cola Amatil has a strategy that is defined by thee pillars. They
are as follows:
1. LEAD – The strategic initiative is to ensure strengthen the
category leadership position
2. EXECUTE – The strategy is to bring change in productivity and in-
market execution
3. PARTNER – The strategy is to align with The Coca-Cola Company
and other partners

BRANDS
Coca-Cola Amatil has brands under certain specific categories of products. They are as follows:
SPARKLING – NON ALCOHOLIC – Coca-Cola, Diet Coca-Cola, Sprite, Fanta, Lift, Kirks,
Cascade, Deep Spring and others.
STILL – NON ALCOHOLIC –Barista Bros, Pump, Fruit Box, Zico, Fruity Drink, Fizetea, Mojo and
others.
ENERGY – Mother and Monster.
ALCOHOL – Teacher’s, Bowmore, Ardmore, Kilbeggan, Jim Beam, Knob Creek, Maker’s Mark and
others.
HOT BEVERAGES –Grinders, Fix Coffee and Simpli Ci Tea, Temple others.
EQUIPMENT – Coke Vending and Neverfail.

SUSTAINABILITY
Coca-Cola Amatil is strongly committed towards positively and distinctly contribute to
the world. The company has four pillars of sustainability. They are as follows:
PEOPLE – Undertaken initiatives are in the areas of heath, safety and wellbeing and
diversity and inclusion.
WELLBEING – The adopted strategies are Responsible Marketing Policy, Five Pillar
Approach and others.
ENVIRONMENT – The considered areas are water, responsible souring, energy and
climate and others.
COMMUNITY – The initiatives are product donations, volunteering, disaster relief,
Brand-led charity and others.

ACCOUNTING FOR NON-
CURRENT ASSETS

NON-CURRENT ASSETS
Coca-Cola Amatil has reported eight types of non-current assets in the 2018 Annual Report. They
are mentioned below:
1. Property, Plant and Equipment
2. Intangible Assets
3. Investments
4. Defined Benefit Superannuation Plans
5. Derivatives
6. Other Receivables
7. Prepayments
8. Loan Receivable Interest-Bearing

PROPERTY, PLANT AND
EQUIPMENT
Property, Plant and
Equipment in Coca
Cola Amatil includes
Freehold and
leasehold land,
Freehold and
leasehold buildings,
Plant and Equipment
and Property, plant
and equipment under
construction.

PROPERTY, PLANT AND
EQUIPMENT
Recognition and Measurement – Coca-Cola Amatil has stated the property, plant
and equipment at cost less impairment and accumulated depreciation. For the purpose
of depreciation, the useful lives of freehold and leasehold buildings and plant and
equipment are 20 to 50 years and 3 to 15 years respectively. Straight-line method has
been adopted for the purpose of depreciation.
Impairment – In accordance with the principles of impairment, the items of property,
plant and equipment are tested for impairment. An impairment loss is recognized when
there is any indication of impairment.
Key Estimates – Historical experience has been considered for estimation of useful
lives of assets. In addition, the assessment of assets’ condition is done on annual basis.

INTANGIBLE ASSETS
Intangible assets of
Coca-Cola Amatil
Includes Brand
names and
trademarks,
Investments in
bottlers’ agreement,
Goodwill, Software
development and
other assets and
Others.