Financial Accounting Report: West Ltd's Accounting Issues Analysis

This financial accounting report analyzes a case study of West Ltd, a company selling canned and frozen fish products. The report identifies and addresses two primary accounting issues. The first issue concerns the recognition of environmental responsibility as an intangible asset under AASB 138, specifically regarding the company's efforts to maintain a dolphin-friendly reputation and support sustainable fishing practices. The report argues that these efforts, while enhancing brand value, do not meet the criteria for recognition as an intangible asset due to uncertainties regarding future economic benefits. The second issue involves the treatment of a guarantee provided by West Ltd to repair damage to the ship Steve Irwin, which attempts to disrupt whalers. The report evaluates whether this guarantee should be classified as a contingent liability or a provision under AASB 137. It concludes that the guarantee should be accounted for as a contingent liability due to the uncertainty of damage and the associated costs. The report provides detailed explanations of the relevant AASB standards and their application to the case.