ACCG224 Financial Reporting: Accounting Policies and Estimates Report

This report analyzes accounting policies, particularly concerning property, plant, and equipment (PPE), in accordance with AASB 10. It emphasizes the importance of consistent and comparable accounting policies for stakeholders' financial statement analysis. The report outlines criteria for selecting accounting policies, focusing on relevance, reliability, and faithful representation of financial aspects. It details accounting policies and estimations for measuring PPE, including cost-based valuation, depreciation methods, and the significance of useful life and residual value estimations. The evaluation of professional judgments highlights the application of these policies in valuing PPE, ensuring consistency with Australian Accounting Standards. The report references key sources like Aasb.gov.au, Fischer (2018), Healy (2019), Senaratne (2016), and Wesfarmers.com.au (2019).

Financial Accounting
and Reporting

Changing Accounting Policies in
Accordance with AASB 10
 The accounting policies followed must be well consistent and
comparable so that the same allows the investors and other
stakeholders of the company, in well comparison of the financial
statements of the company (Lugovskу and Kuter 2019).
 In the case of application of an accounting standard, when specially
applied to a transaction or condition, the impact of applicable
accounting policy can be well judged with the help of the changes
observed in the values of that specific asset.

Criteria for Selecting Accounting
Policies
 The Accounting policy should be relevant and material enough for the purpose
of economic decision making that is applied by the stakeholders of the
company (Healy 2019).
 Reliability would be a key factor when considered showing or reflecting the
faithful representation of the financial position, financial performance and other
financial aspect of the company (Aasb.gov.au 2019).
 The economic substance of the transaction should be well reflected in the
given set of events and conditions.
 The accounting policies stated should be neutral and must not be prepared on
a biased basis.
 Prudence and completeness should be the key qualitative feature should would
be highlighted with the help of the accounting policies selected or given.

Accounting Policies and Estimation for
Measuring the PPE
 The accounting policies that are used by the company for the purpose of
measuring the property, plant and equipment is based on a cost value
basis, less any depreciation and impairment expenses that is directly
associated with the company (Aasb.gov.au 2019).
 The cost associated with the assets recognized in the financial
statement of the company, includes the replacement cost eligible for
capitalisation purpose and various other cost including major inspection
charges.
 The key estimates that the company has deployed in the context of
property, plant and equipment are primarily in the field of useful life,
residual value and various depreciation methods are deployed for the
purpose of valuation purpose (Fischer 2018).

Evaluation of Professional
Judgements
 The accounting policies and estimations that have been applied for the
purpose of evaluation of professional judgements has been in the field of
valuation of the property plant and equipment that is shown at the cost
value.
 The relevant changes in the carrying value of the assets were recorded
after recognizing the impairment and depreciation charges that is
associated with the assets.
 Depreciation of the non-current assets has been done by the company,
based on the straight line method whereby key estimations done by the
company were respectively in the field of useful life of the assets and the
associated benefits that would be flowing to the company.
 The accounting policies that are used by the management of the
company has been well consistent with the Australian Accounting
Standards.

References
 Aasb.gov.au. (2019). [online] Available at:
https://www.aasb.gov.au/admin/file/content105/c9/AASB108_08-15.pdf
[Accessed 11 Sep. 2019].
 Fischer, D., 2018. Ethical and Professional Implications of Blockchain
Accounting Ledgers. Available at SSRN 3331009.
 Healy, K., 2019. Auditing Accounting Estimates. The CPA Journal, 89(2),
pp.40-42.
 Senaratne, P.W., 2016. Valuation Process for Extractive Industrial
Properties.
 Wesfarmers.com.au. (2019). [online] Available at:
https://www.wesfarmers.com.au/docs/default-source/asx-
announcements/2018-annual-report.pdf?sfvrsn=0 [Accessed 11 Sep.
2019].

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