Wesfarmers Consolidated Annual Report Analysis - ACC303

This assignment analyzes the Wesfarmers consolidated annual report, addressing key accounting issues such as the inclusion of subsidiary company performance in the consolidated report, the role of the audit committee in ensuring financial statement integrity, and the treatment of goodwill and impairment of non-financial assets. The analysis highlights the importance of consolidated reporting for a comprehensive view of the company's performance, the oversight provided by the audit committee, and the application of accounting principles related to asset valuation and impairment. The assignment includes a memo to the Board of Directors, explaining the issues and their implications, and a summary of the findings in a presentation. The analysis is based on the provided assignment brief and the provided solution. The assignment is a part of ACC303 Company Accounting.

Issue 1:
Wesfarmers prepare their consolidated annual report which includes the information and performance
of the subsidiary companies, strategic investments and joint ventures. This provides the stakeholders to
have a clear look at the complete picture of the overall company at one report. The actual performance
may not be stated if the report would contain only the performance of the Wesfarmers (parent)
company. Hence, it is necessary to include all the financial conditions from the subsidiary companies as
well. This fact also goes with the subsidiary company’s alone report also as their performance for that
specific year will show only losses and so the performance is consolidated with the parent entity.
Wesfarmers believe that as they have more than 50% share in their subsidiary company, it is important
to include their performance in the consolidated annual report which will keep the subsidiary companies
accountable for making losses in that specific year.
Issue 2:
The policies of the company is stated in the corporate
governance report and the audit committee has clearly displayed their objectives. The sustainability and
the solvency targets for that specific year has been met by the entity which is reflected in the corporate
governance report and in the annual report as well. The audit committee has ensured that the integrity
of the financial statement and the reporting is reviewed properly. The committee also oversees the
performance of internal audit. Wesfarmers auditors prepares the annual report after a full analysis
because the consolidated annual report contains the financial statements from different subsidiary
companies. The audit committees also ensures that whether the company policy is maintained by the
subsidiary company’s financial statements or not.
Issue 3:
Yes, there is goodwill present in the consolidated annual
report. Wesfarmers have created a notes to accounts for the Goodwill and intangible assets where all
the information of goodwill from the acquired companies are displayed in detail. The allocation has
been done carefully by the auditors.

The impairment of non-financial assets are done by
the auditors reported in the consolidated annual report. Wesfarmers have impairment there non-
financial assets according to the market value. However, in the financial year 2019 there was no material
reversal of impairment. Key assumptions are done for each subsidiary company is done. Key
assumptions are done for assessing the recoverable amount of every subsidiary company.
Issue 4: