Rio Tinto Ltd. Accounting Report: Assets, Intangibles, and Impairment

This report analyzes the assets of Rio Tinto Limited, focusing on property, plant, and equipment (PPE) and intangible assets. It begins by presenting the carrying amounts of these assets, including a breakdown of PPE components like plant & equipment, mining properties & leases, and land & buildings, as of December 31, 2017. The report then details the accounting policies adopted by Rio Tinto for PPE, including the capitalization of initial close-down and restoration provisions, and depreciation methods. It also identifies the intangible assets reported by Rio Tinto, such as mining properties & leases and capital works in progress, along with their accounting treatment, including amortization policies. Finally, the report discusses asset impairment, highlighting the $172 million pre-tax impairment charges on PPE and the total impairment charge of $796 million, allocated among intangible assets and PPE. This comprehensive overview offers insights into Rio Tinto's financial reporting practices related to its assets.

Corporate Accounting

ASSETS – PPE AND INTANGIBLES
Stating the carrying amount of each class of Property, Plant, and Equipment
Annual report of Rio Tinto Ltd presents that carrying value pertaining to property, plant
& equipment accounts for $62093 millions. Balance sheet of the business unit clearly presents
that value of property, plant & equipment has increased significantly over the years from $58555
to $62093 million (Annual report of Rio Tinto Ltd, 2018). At the end of 31st December 2017, net
or carrying value of different kind of assets is as follows:
The above depicted image shows that carrying amount of plant & equipment accounts for
$36285 respectively. Thereafter, net value of mining properties & leases are higher and imply for
$11488 significantly. Further, annual report of Rio Tinto Ltd shows that carrying value of land &
building and capital works at the end of 31st December was $7376 & $6944.
Describe the accounting policies relating to Property, Plant, and Equipment adopted by RIO
Tinto Limited
Section of accounting policies disclosure clearly presents that initial close down and
restoration provision is capitalized under the section of property, plant & equipment. From the
annual report of company, it has assessed that Rio Tinto depreciates such cost over its useful life.

Further, changes which take place in the closure provision pertaining to the closed operations are
credited under net operating cost heading of income statement.
Identifying intangible assets reported by RIO Tinto Limited and discussing its composition as
well as relevance to the business.
Statement of financial position presents that at the end of 2017, intangible assets level of
Rio Tinto accounts for $3119 millions (Annual report of Rio Tinto Ltd, 2018). Composition of
intangible assets include mining properties & leases, land & building, plant & equipment and
capital works in progress.
Describing accounting policies in relation to Intangible Assets adopted by RIO Tinto Limited
Note section of the report presents that purchased intangible assets are initially recorded
at cost. In the context of Rio Tinto Ltd, annual report shows that intangible assets with the finite
life are amortised on the basis of their useful economic lives. As per appropriateness, company
consider either straight line or units of production basis. Business unit has complied with all the
rules and regulations of IFRS associated with the treatment of intangible assets.
Identifying which assets are impaired along with the amount of accumulated impairment losses
Annual report of Rio Tinto Ltd for the period ended on 2017 shows that property, plant &
equipment was fully impaired. Due to pre-tax impairment charges of $172 millions PPE was
considered as impaired to the full extent. Through evaluation, it has identified that total
impairment charge net of reversals account for $796 significantly. Such impairment loss is
allocated among different assets in the following manner:
Particulars 2017
Intangible assets (357)
Property, plant and equipment (435)
Other assets and liabilities (4)
Total impairment charge net of reversals (796) (Annual report of Rio Tinto Ltd, 2018)

REFERENCES
Online
Annual report of Rio Tinto Ltd. 2018. [pdf]. Available through: <
http://www.riotinto.com/documents/RT_2017_Annual_Report.pdf>