Corporation Accounting: Impairment Loss Analysis of BlueScope Steel

This report provides an analysis of impairment loss accounting within the context of a corporation, specifically referencing AASB 136 and applying it to BlueScope Steel Ltd. The report explains how the company measures assets, identifies potential impairment losses, and recognizes them in the financial statements. It details the application of historical cost and fair value in asset valuation, including plant, property, and equipment, and inventories. The report also addresses the treatment of goodwill and the process of determining and recognizing impairment losses, including the reversal of such losses. The study references several academic sources to support its findings and provides a comprehensive overview of the practical application of accounting standards related to asset impairment.

Running head: ACCOUNTING FOR CORPORATION
Accounting for corporation
Name of the Student
Name of the University
Author Note

1ACCOUNTING FOR CORPORATION
The AASB 136 to recommends the actions which a company put on to make sure that its
assets are carried at no more than their amount that is recoverable (Johansson, Hjelström, &
Hellman, 2016). An asset that is carried at an amount that is greater than its amount
recoverable if the amount carrying surpasses the value to be improved with the help of the
utilization or asset sale. In this case the asset is defined as impaired and according to the
Standard it needed by an organization to identify an impairment loss (McMeeking & Bamber,
2015). The AASB 136 Standard also lay down when an entity should reverse an impairment
loss and prescribes disclosures.
1. In the chosen company of BlueScope Steel Ltd the assets are measured in the historical
cost basis except few of the assets that are calculated at fair value at the end of the
financial year. The plant, property, and other tangible assets are prepared are capitalized
at are included in the finance cost. The self-constructed assets are considered at cost for
the purpose of capitalization. The inventories are m3asure3d on cost basis.
2. The company’s assets include plant and machinery, buildings, computers, motor
vehicles and furniture and fixtures. Yes, the company has goodwill (Bamber&
McMeeking, 2016).
3. At the date of balance sheet the BlueScope Steel Ltd analyses the carrying amount of the
assets to check whether there is an impairment loss. The impaired loss is renowned at
the profit and loss staement (Lubbe, Modack & Watson, 2014). The estimation of an
asset is impaired when the total of evaluated future income from that asset is not as
much as the book estimation of the asset. At this point there should be recognition of an
impairment loss, the measurement is done by taking the difference between the book
value and the fair market value and recording this amount as the loss.

2ACCOUNTING FOR CORPORATION
4. The rise in carrying amount of an asset other than goodwill attributable to a
an impairment loss reversal should not surpass the carrying amount that would have
been determined as net of amortization or depreciation, had no impairment loss has been
recognized for the asset in prior years (Small, Smidt & Joseph, 2017). The reversal of
the impaoment loss is recognised as income in the staement of profit and loss at the time
when they arise. so far there is no impareed loss identified (Johansson, Hjelström, &
Hellman, 2016).
5. The reversal of the impaoment loss is identified as income in the staement of profit and
loss at the time when they arise. so far there is no impareed loss identified. On the
balance sheet, long-term assets are reduced by the impairment (Logeswary &
Velnampy, 2014).

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References
Bamber, M., & McMeeking, K. (2016). An examination of international accounting standard-
setting due process and the implications for legitimacy. The British Accounting
Review, 48(1), 59-73.
Johansson, S. E., Hjelström, T., & Hellman, N. (2016). Accounting for goodwill under IFRS:
A critical analysis. Journal of International Accounting, Auditing and Taxation, 27,
13-25.
Logeswary, S., & Velnampy, T. (2014). Impact of Impairment Loss on Profitability and
Capital Structure of Listed Manufacturing Companies in Sri Lanka.
Lubbe, I., Modack, G., & Watson, A. (2014). Financial accounting GAAP principles. OUP
Catalogue.
McMeeking, K. P., & Bamber, M. A. (2015). An examination of international accounting
standard-setting due process and the implications for legitimacy.
Small, R., Smidt, L., & Joseph, A. (2017). Impairment of assets-does it actually
matter?. Professional Accountant, 2017(30), 20-21.