ACCG224: Analysis of Accounting Policies in Video Presentation

This document presents a script for a video presentation analyzing the relevance of professional judgments in accounting policies, particularly concerning AASB 108. The presentation discusses the challenges accountants face in demonstrating their knowledge of accounting policies and potential discrepancies in preparing accounting judgments. It includes an overview of AASB 108 requirements and a case study of Commonwealth Bank's accounting policies for Property, Plant, and Equipment. The analysis critiques the company's policies, highlighting aspects like the absence of specific depreciation models and offers recommendations for improvement to provide a more detailed picture of the financial statements. The presentation aims to provide insights into the application of accounting policies and the importance of professional judgments in financial reporting.

Script for the Video Presentation
Good Morning Everyone, Today we have gathered here for bringing about a discussion
regarding the relevance of the professional judgements given by the accountants to the
accounting policies of the organisation. As we know, the accountants face lot of challenges
for demonstrating their knowledge about the accounting policies. As a result, there could be
lot of discrepancies in preparation of the accounting judgements for the respective policies.
Through this presentation, we would have a general discussion of the requirements provided
in AASB 108 regarding the accounting policies of different organisations. Further, we would
gain a deeper insight of this concept through the study of the accounting policies and
estimates of an Australian company.
The first slide, as we can see, talks briefly about the criteria that has been laid down by
AASB 108 regarding the selection and changing of the accounting policies of the
organisations. In this context we can highlight the following points.
a) In the absence of any proper accounting standard, the management has the liberty to
formulate its own professional judgements in the development of its own accounting
policies. However, the management should ensure the reliability and relevance of
such information
b) Considering the change in the accounting policies, the change can be done only if the
information has all the necessary details of the transactions and the events of the
entity over the financial year. This should also include the details of the cash flows of
the entity.
The subsequent slide provides an overview regarding the accounting policies and estimates of
our chosen organisation. We have chosen Commonwealth Bank for conducting our research

works. Commonwealth Bank is an Australian company listed in Australian Securities
Exchange (ASX).
We have gathered the following information about the accounting policies of the company in
accounting for Property, Plant and Equipment.
1) The company uses the difference between its disposal proceeds and the carrying value
of these items for estimating net gain or loss.
2) The items have been categorised under non-current assets and are held by the
company to be used for subsequent years.
3) The company uses the difference between the proceeds that is received and the
carrying value of these assets for recognising its revenue.
4) Depreciation of these non-current assets is estimated through the straight line method
over the entire useful life of the assets.
The next slide talks about some of the critiques that can be applied to judge the
appropriateness of this professional judgement that we have seen in the previous slide.
1) No specific model, whether cost or revaluation has been observed in the accounting
policy of the company, particularly for property, plant and equipment.
2) The policy does not say anything about the accumulated depreciation or the
impairment losses to be excluded from the fair value of these assets.
3) The classification has been done accurately and the principle used for derecognition
and disposal of these assets is also applied effectively.
4) Taking into account the method of depreciation, the chosen method of straight line
depreciation in convenient and is abiding by the Industry Standard.
From the presentation, we can briefly say that some of the accounting policies formulated by
the organisation are correct while some of them show disparities. Certain additions could be

recommended in the policy which would signify a presentable and a detailed picture of the
financial statement. I hope through my presentation I have been able to successfully cater to
the aimed research topic. Kindly raise any question or doubt that you might have through the
course of my presentation. You are also welcome to provide your own judgements or
feedback in relation to the topic of the presentation. Thank you for your patient hearing.