Strategy of AASB (28-07-16)
Questions:
1.Identifying the Changes Made During May 2017 to August 2017, In the Accounting Standard.
2.Prepare the statement of financial position of Winter Ltd for the year ended 30 June 2017 in accordance with AASB 101, using the line items that a listed company is likely to use.
AASB has mainly suspended the AAS 25, where companies were able to use superannuation plans in the financial reporting. This closure is mainly conducted from the next financial year, where companies were not allowed to use the AAS 25 in their financial report.
Strategy of AASB (28-07-16)
AASB has mainly proposed the overall strategy for the business from 2017 to 2021, where individuals are allowed to comment on the standard of the strategy. From this AASB will mainly be able to identify the relevant impact of the strategy on the overall performance of the organisation.
Declaration of tax liability by more organisations (04-07-2017)
Relevant amendments is been conducted by AASB, where tax authority will have full knowledge of the overall facts about the tax position of an organisation. Furthermore, it is also stated that the estimated tax liability amount does not have to be included in the balance sheet statement that is prepared by the company.
Portraying transparency in the annual report (20-07-2017)
AASB has mainly mandated that all the public section companies needs to disclose all the relevant liabilities and assets in the financial report. This could mainly help in generating the relevant reliability and accountability of the organisation in the eyes of investors.
AASB mainly provided relevant information on the overall tax position of an organisation for international investors, which coil directly help in understanding the overall tax potions of the company. Global disclosure practise is mainly used by ASIC regarding non-GAAP, where relevant disclosure is been provided from ETR depending on the corporate tax of an organisation. AASB directly provides relevant disclosure regarding the guidance of ETR, which could be understood by the international investors.
AASB in accordance with the IFRS 17 has mainly mandated that the global insures will not be allowed to use historical cost in their financial report. This has mainly forced the organisation to recognise losses before hand, which could help in strengthening the impact of the financial report.
There are relevant amendments that is conducted on the AASB 116, where proposal is been made for the plant, property and equipment. The proposal directly stated that the proceeds from selling the produce of plant, property and equipment is mainly capable of including in the operating section. For example, the testing face of the machine and the profit provided could be included in the profit and loss account, where it needed not be subtracted from the asset cost.
2.Financial statement presentation (Balance Sheet)
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In the books of Winter Limited for the year ended 30th June 2017 |
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Particulars |
Amount (in $) |
Amount (in $) |
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Assets: |
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Non-current assets: |
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Goodwill |
$ 68,300 |
|
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Plant and equipment |
$ 652,200 |
|
|
Less: Accumulated depreciation |
$ 104,300 |
$ 547,900 |
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Land |
$ 1,100,000 |
|
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Current assets: |
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Accounts receivable |
$ 123,900 |
|
|
Less: Allowance for doubtful debts |
$ 14,600 |
$ 109,300 |
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Cash at bank |
$ 18,200 |
|
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Cash management account |
$ 150,000 |
$ 168,200 |
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Inventories |
$ 212,400 |
|
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Raw materials |
$ 100,500 |
$ 312,900 |
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Prepaid rent |
$ 13,600 |
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Loan receivable |
$ 60,000 |
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Interest receivable |
$ 6,700 |
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Non-current investments: |
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Investment property |
$ 614,000 |
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Total |
$ 3,000,900 |
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Equity and liabilities: |
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Shareholders’ funds: |
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General reserve |
$ 276,800 |
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Retained earnings |
$ 873,300 |
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Share capital |
$ 500,000 |
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Non-current liabilities: |
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Debentures |
$ 600,000 |
|
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Provision for warranty |
$ 17,000 |
|
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Less: Repayable in a year |
$ 5,000 |
$ 12,000 |
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Provision for long service leave |
$ 27,000 |
|
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Less: Repayable in a year |
$ 8,000 |
$ 19,000 |
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Provision for annual leave |
$ 36,000 |
|
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Less: Repayable in a year |
$ 19,000 |
$ 17,000 |
|
Bank loan |
$ 500,000 |
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Current liabilities and provisions: |
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Interest payable |
$ 8,300 |
|
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Accrued wages payable |
$ 8,200 |
|
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Dividends payable |
$ 45,000 |
|
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Current tax liability |
$ 33,500 |
|
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Accounts payable |
$ 75,800 |
|
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Add: Provisions repayable |
$ 32,000 |
$ 107,800 |
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Total |
$ 3,000,900 |
References
News. (2017). Aasb.gov.au. Retrieved 27 August 2017, from https://www.aasb.gov.au/News.aspx
Weil, R. L., Schipper, K., & Francis, J. (2013). Financial accounting: an introduction to concepts, methods and uses. Cengage Learning.
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