Aurora Minerals Limited: Measuring Liabilities and Assets Report, 2019

This report provides a comprehensive analysis of Aurora Minerals Limited's asset and liability measurements, adhering to Australian Accounting Standards (AASB). It explores the importance of these measurements in conveying the company's financial health to stakeholders, including investors, creditors, and suppliers. The report examines specific assets, such as plant, property, and equipment (PPE), and investment and other financial assets, detailing their initial and subsequent measurements. It also analyzes liabilities, including leases and employee benefits. The author assesses whether Aurora Minerals Limited's measurement practices align with relevant AASBs, particularly focusing on qualitative characteristics like relevance, faithful representation, comparability, verifiability, timeliness, and understandability. The report concludes that the company's practices are relevant to its business operations and meet the qualitative characteristics outlined in the Conceptual Framework, ensuring ethical business practices and reliable financial information for stakeholders. The analysis references Aurora Minerals Limited's 2017/2018 Annual Report, and relevant AASB standards.

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AURORA MINERALS LIMITED
By (Student’s Name)
Professor’s Name
College
Course
Date

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AURORA MINERALS LIMITED
Executive Summary
The main purpose of this report is to comprehensively understand the measurement of
liabilities and assets according to the appropriate Australian Accounting Standards in Aurora
Minerals Limited business practices. The discussion of Aurora Mineral Limited liabilities and
asset measurement shall be in line with the Australian Conceptual Framework and additional
suitable AASBs to back the comments in this report. The report appreciates the need for Aurora
Mineral Limited as an entity to determine the liability and asset measurement and valuation to
provide increasingly relevant as well as reliable info to users to comprehend its business
practices. The report also shows how Aurora Minerals Limited has considered the need to value
and measure liabilities and assets in a professional judgment manner by taking account of the
nature as well as the degree of estimations and uncertainty. This report is anchored on paragraph
86 of the CF which states that measurement reliability calls for second criterion for an item
recognition is that it possess a value or cost which can be reliably measured. Often value or cost
must be estimated and the utilization of reasonable estimates remains a fundamental part of the
financial statements (FS) preparation and never undermines their reliability. It is also premised
on para. 99 of CF which acknowledges that measurement remains the process of monetary
amount determination at which the FS elements get recognized as well as carried in the income
statement and balance sheet. Thus, to apply these two paragraphs accordingly, 2017/2018
Annual Report of Aurora Mineral Limited which is listed on the ASX and provide comments on
(1) why it is crucial for Aurora Minerals Limited to measure its liabilities and asset; (2)
identifying essential measurements including initial measurement and consequent measurement
of liabilities or assets adopted by Aurora Mineral Limited by commenting on at least two

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liabilities and two assets; and (3) providing opinion which assesses whether Aurora Minerals
Limited’s measurement of liabilities and assets highlighted in question two above remain
relevant to the Company’s business practices or meet the qualitative characteristics established
by CF and relevant AASB.
1. Importance of Measuring Liabilities and Assets
Measurement of liabilities and assets remain significantly critical to Aurora Mineral
Limited in many ways. It is through such measurement then the Company conveys its financial
health or position to all the stakeholders who use such info for various critical decisions. For
instance, assets and liabilities are used by Aurora Mineral Limited to prepare balance sheet
which is then used to show its liquidity and the financial health. Investors, for instance, would
want such info to known whether the company can meet its obligations both in the short and long
run and hence decide to continue investing in the Company. Shareholders also use the asset and
liability information to track where their money went to and where they are currently to have
confidence in the Company. The Company also uses these measurements to benefit from the
creditors and suppliers who use these information to determine whether to continue giving
credits or supply their commodities to the firm. With correct measurements, the firm will be able
to convince its stakeholders including investors, debtors, customers, creditors, suppliers and
amongst others to ensure continuity of operations (Osadchy et al. 2018).
2. Essential Elements
Assets:
Plant, property and equipment (PPE): Every class of equipment and plant remain
carried at cost minus all accumulated depreciation whenever applicable. The equipment and
plant is measured based cost and their associated carrying amount remains reviewed every year

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by directors of the firm to make sure it is never in surplus of the recoverable from such assets
(AASB 116). Such recoverable get evaluated based on anticipated cash-flows (net) that shall be
got from such assets use as well as consequent disposal. The anticipated cash-flows (net) are
discounted to PVs in recoverable values’ determination. The depreciation gets computed based
on straight-line approach for writing-off the next cost of every fixed assets over their effective
life and the residual values. Reviewing and adjusting useful lives are performed where
applicable, at every date of reporting. The carrying amount of assets gets instantaneous write-
down to the recoverable amount where assets carrying amount remains higher than its associated
approximated recoverable amount (AASB 116). Each loss and gain on disposal remain
established via the proceeds comparison with carrying amount and incorporated in
comprehensive income statements. Rates of depreciation utilized for every asset class of
depreciable assets like P&E include 5 percent to 33.33 percent.
Investment and other financial assets: These are measured initially at FV and cost of
transactions get included as portion of initial measurement, with exemption of financial assets at
fair value through loss/profit. They are consequently measured at either FV (AASB 13) or
amortized cost (AASB 9) depending on respective classification. Classification is established
based acquisition purpose and consequent reclassification to remaining categories remain
restricted. Financial assets get depreciated whenever the rights of cash-flow receipt from
financial assets get become expired or transferred and consolidated entity has transferred
significantly all ownership rewards and risks (Aurora Minerals Limited 2018).
Liabilities
Leases: The payment for leases for its operating leases, where significantly all benefits
and risks stay with leaser, get treated as expenses in periods of their incurrence (AASB 16).

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Employee benefits (EB): The short-run EB are the salaries alongside wage liabilities
which include annual-leave, long-service-leave and non-monetary benefits anticipated to get
their settlement within 1 year of date of reporting (AASB 119). They are recognized in current
liabilities in reference to employees’ service till date of reporting and then measured at values
anticipated to get settled whenever liability stay paid.
3. Opinion: Business Practices or Qualitative Characteristics
In my opinion, the Aurora Minerals Limited’s measurement of liabilities and assets
addressed in question 2 above stays relevant to the business practices and also meet the
qualitative characteristics and other suitable AASBs (AASB 101; AASB 116, AASB 13, AASB
119, AASB 16and AASB 9). This is because the company has adopted principal accounting
policies in the FS preparations and presentations which have subsequently been applied
consistently to all the years presented, except if stated otherwise. Aurora Minerals Limited has
adopted all the new, revised as well as amended Australian Standards (AUs) and Interpretations
issued by AASB that remain mandatory for their current period of reporting with exclusion of
any new, revised or amending AUs or Interpretations that are never already mandatory. The
general purpose FS have been prepared based on according to AAUs and Interpretation issued by
AASB and Corporation Act 2001 as relevant for for-profit based entities and they also comply
with IFRS as issued by IASB (Laswad and Redmayne 2015).
The FS are prepared based on historical-cost conversation, excluding, for, wherever
necessary, the available-for-sale financial liabilities and assets get revalued at FV via loss or
profit, investment properties, some classes of PPE, alongside derivative financial instruments.
The critical accounting estimates (CAE) have been applied in preparing FS. Aurora Mineral
Limited prepares its FS based on the requirement of the use of some CAE and managers to work

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out their desirable judgments in the course of application of the accounting policies of
consolidated entity. Some sections have involved an advanced judgment extents/complexities
while others (involving critical assumptions as well as estimates to the FS), get revealed in note
1 of the Annual Report.
As reflected in the 2018 Annual Report of Aurora Minerals Limited, it is apparent that
the assets and liabilities measurements for PPE, Investment and other financial assets (Assets);
and leases and employee benefits (liabilities) highlighted in question 2 above meets both
fundamental and enhancing qualitative characteristics of the CF under QC1-QC32. This is
because the information PPE, investment and other financial assets, leases and employee benefits
are presented based on AASB 101 and the QC6-QC10 (relevance); QC11(materiality); and
faithful representation (QC12-QC16). This is because Aurora Minerals Limited have correctly
applied the fundamental qualitative characteristics as outlined under QC17-QC18 (AASB 2019).
The info on these assets and liabilities remain relevant because the make a difference to
the users including investors and creditors’ who make decisions to invest and give credit to the
firm because they use them to assess the financial health of Aurora Mineral Limited (Bai,
Krishnamurthy and Weymuller 2018). Indeed, using the info presented in the above elements,
the investors can see clearly that Aurora is operating on a going concern basis and is liquid
enough to meets its obligations and hence having confidence in the Company (QC6-QC7). This
implies that the Aurora Mineral Limited is giving info which are relevant to its business practices
because the info convince its stakeholders to continue investing in the Company and hence
continuity of the operations (Albrecher et al. 2018).
The info on PPE, leases, employee benefits and investment and other financial assets
further meets the secondary qualitative characteristics (QC19) like QC20-QC25 (comparability);

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QC26-QC28 (verifiability); QC29 (timeliness); and QC30-QC32 (understandability). This is
because Aurora Minerals Limited has presented these information in a manner that allows users
to easily compare them with peers to make informed decision hence meeting the comparability
requirement (Macve 2015). The information are also timely since they are prepared and
presented within the financial year and hence users have updated information which makes them
make informed decisions. The decisions to ensure that these qualitative characteristics are met
means that Aurora Minerals Limited wanted to its business practices to remain ethical by
adhering to the requirements as outlined in AAUs and AASBs and the entire conceptual
framework (Atkeson, Eisfeldt and Weill 2017).

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References
AASB. 2019. Conceptual Framework for Financial Reporting. Norwalk, CT: FASB.
https://www.aasb.gov.au/admin/file/content105/c9/Conceptual_Framework_05-19.pdf
Aurora Minerals Limited. 2018. Annual Report 2018. Aurora Minerals Limited ABN 46 106 304
787, pp. 1-64.
http://www.auroraminerals.com/Portals/4/News/2018/Aurora%20Annual%20Report
%20FY18%20Final%20.pdf
Albrecher, H., Bauer, D., Embrechts, P., Filipović, D., Koch-Medina, P., Korn, R., Loisel, S.,
Pelsser, A., Schiller, F., Schmeiser, H. and Wagner, J., 2018. Asset-liability management for
long-term insurance business. European Actuarial Journal, 8(1), pp.9-25.
Atkeson, A.G., Eisfeldt, A.L. and Weill, P.O., 2017. Measuring the financial soundness of US
firms, 1926–2012. Research in Economics, 71(3), pp.613-635.
Bai, J., Krishnamurthy, A. and Weymuller, C.H., 2018. Measuring liquidity mismatch in the
banking sector. The Journal of Finance, 73(1), pp.51-93.

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Laswad, F. and Redmayne, N.B., 2015. IPSAS or IFRS as the framework for public sector
financial reporting? New Zealand preparers’ perspectives. Australian accounting review, 25(2),
pp.175-184.
Macve, R., 2015. A Conceptual Framework for Financial Accounting and Reporting: Vision,
Tool, Or Threat?. Routledge.
Osadchy, E.A., Akhmetshin, E.M., Amirova, E.F., Bochkareva, T.N., Gazizyanova, Y.Y. and
Yumashev, A.V., 2018. Financial statements of a company as an information base for decision-
making in a transforming economy. European Research Studies Journal, 21(2), pp.339-350.