Analysis of Plant, Equipment, and Intangible Assets in Finance Report

This finance report provides an analysis of plant, equipment, and intangible assets, referencing the financial practices of an entity. It details how plant and equipment are recorded at cost, less accumulated depreciation and impairment, and notes no revaluation occurred in 2017 or 2018. The report explains the derecognition of plant and equipment upon disposal and the calculation of profit or loss. It further categorizes intangible assets, such as goodwill and brand names, and describes how goodwill is tested for impairment and translated for foreign operations. The report concludes by summarizing the composition of non-current assets, including plant and equipment, intangible assets, and other non-current assets, while noting the absence of asset revaluations.

Running head: FINANCE
Finance
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Table of Contents
Answer 1....................................................................................................................................2
Answer 2....................................................................................................................................2
Answer 3....................................................................................................................................2
Answer 4....................................................................................................................................3
Reference....................................................................................................................................4

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Answer 1
Plant and equipments are recorded by the entity at cost reduced by accumulated
depreciation and impairment, if any. Impairment loss is recognised by the entity for amount
by which carrying value of the assets exceed the recoverable amount. For the year ended the
amount of plant and equipment was $ 198 million and the same for the year ended 2017 was
$ 208.2 million. Impairment charges and depreciation charges for the year ended 2018 were $
326.5 million and the same for 2017 was $ 276.3 million. However, no revaluation for plant
and equipment was taken place for the year 2017 as well as 2018 (Investors.jbhifi.com.au
2019).
Answer 2
Item of plant and equipment is derecognised by the entity upon its disposal or when it
is established that no future economic benefit from the asset is expected to be arisen from
usage of the asset. For the year ended the amount of disposal for plant and equipment was $
4.7 million and the same for the year ended 30th June 2018 amounted to $ 2.9 million. Profit
or loss made on the retirement or disposal of any item from plant and equipment are
calculated as the difference among the carrying value of asset and sales proceeds. The loss or
gain is recognised under the profit or loss account of the entity (Bragg 2017).
Answer 3
Intangible assets are the assets those lack the physical existence. Generally the
intangible assets are segregated into 2 categories – (i) intangible assets with limited life like
copyrights, patents and goodwill and (ii) intangible assets with unlimited life like trademarks.
Various assets recorded as intangible assets by the entity are goodwill, brand names, location
premiums and right to profit shares. Total amount recorded as intangible assets was $ 1037.3

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million out of which amount of goodwill was $ 747 million, brand names was $ 284.4
million, location premiums was $ 2.4 million and rights to profit share was $ 3.5 million (Su
and Wells 2015).
Goodwill of the company represents excess of cost of acquisition over fair value of
the entity’s share of net identifiable assets acquired at acquisition date. Goodwill is carried at
the cost reduced by accumulated impairment loss amount. For testing the impairment,
goodwill is assigned to each cash generating unit of the group those are expected to be
benefitted from synergies of business combination. Goodwill arising from the acquisition of
the foreign operation is reported as liabilities and assets of foreign operation and is translated
at closing rate (Investors.jbhifi.com.au 2019).
Answer 4
Non-current assets of the company include various items like plant and equipment,
intangible assets and other non-current assets. Total amount of non-current assets was $
1281.2 million out of which plant and equipment was $ 198 million, intangible assets were $
1037.3 million and other non-current assets was 45.9 million. However, no instance was there
where the non-current assets of the entity have been revalued upwards or downwards (Small,
Smidt and Yasseen 2017).

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Reference
Bragg, S.M., 2017. Fixed Asset Accounting. AccountingTools LLC.
Investors.jbhifi.com.au., 2019. [online] Available at: https://investors.jbhifi.com.au/wp-
content/uploads/2018/10/Annual-Report-2018-with-Chairmans-CEOs-Report.pdf [Accessed
9 Jan. 2019].
Small, R., Smidt, L. and Yasseen, Y., 2017. Revaluation of depreciable assets-benefits to
organisations. Professional Accountant, 2017(30), pp.22-23.
Su, W.H. and Wells, P., 2015. The association of identifiable intangible assets acquired and
recognised in business acquisitions with post acquisition firm performance. Accounting &
Finance, 55(4), pp.1171-1199.