Accounting Policy Report: Property, Plant, Equipment & Recognition

This report provides a detailed analysis of accounting policies related to property, plant, and equipment, inventory, accounts receivables, financial instruments, intangible assets, and revenue recognition. It covers recognition and measurement criteria, subsequent costs, depreciation, and impairment. The report also discusses employee benefits, related parties including controlled and non-controlled entities, and transactions with key managerial personnel. Specific transactions, such as the acquisition of BOQF Cash flow Finance Pty Limited, are also highlighted. The document references Al Attar (2016) and Lubbe (2014) to support its analysis. Desklib offers similar solved assignments and past papers for students.

ANSWER
Ans. 2.4
Accounting Policies
- Property Plant and Equipment – The accounting policy has been described under four
headings – recognition and initial measurement, subsequent costs, subsequent
measurement and depreciation. Initially the items are recognized at cost and then amount
of depreciation and the impairment is deducted. The expenditure if any subsequently
incurred are capitalized if there is the probability of having future economic benefits
otherwise transferred to statement of profit and loss.
- Inventory – There are no inventories kept at the end of the year under reporting.
- Account Receivables – It includes lease receivables and amounts receivables from
financial instrument. These are stated at the price to be received and include the amount
of the goods and service tax.
- Financial Instruments – There are four categories under which the bank classifies its
financial instruments. These are financial assets held for trading, available for sale,
receivables which are due from the other financial institutions and other derivative
financial instruments. Bank has recorded the financial assets for trading at fair value (Al,
2016).
- Intangible Assets – Intangible assets are recorded at cost less the amount of the
amortization and the impairment. In case any intangible asset is internally generated then
the expenditure is transferred to the statement of the profit and loss. In case any
subsequent expenditure is incurred then it is capitalized if there are future economic
benefits and for the impairment the intangibles are checked for impairment at the end of
each year.
- Revenue Recognition - The amount of premiums are recognized on the date when the
risks are attached in relation to the life insurance contract. Some premium amounts are
deferred in case of future premiums or policy charges.
- Others – Employee benefits includes superannuation commitments and share based
payment. Superannuation contributions are calculated on the basis of various percentages
of the salaries of the employees.

Related parties and Transactions with related parties
- Controlled Entities – The bank has fifty plus controlled entities with zero percent portion
of the share of non controlling entities. It includes Alliance Premium Funding Pty
Limited, bank of Queensland Limited Trust, BOQ Covered Bond Trust, BOQ Credit Pty
Limited and many others.
- Non Controlled Entities – There is no non controlling entities.
- Other Related Parties – It includes key managerial personal, directors and executives of
the company (Lubbe, 2014).
- Transaction in the financial year - During the year the company has incurred the amount
of 15,896,947 dollars for the key managerial personnel who include employee benefits
and administrative expenses. Apart from this, the company has acquired the BOQF Cash
flow Finance Pty Limited for amount of 21.4 million dollars.
REFERENCES
Al Attar, (2016), “Measuring the Conservatism Level in the Accounting Policies and Its Effect
on the Financial Information Disclosure Quality in the Jordanian Commercial Banks”. J. Mgmt.
& Sustainability, 6, p.91.
Lubbe, I, (2014), “Financial accounting GAAP principle”, Accounting Review, 201, p.21-30