- Explain, discuss and integrate the technical and theoretical knowledge about the regulatory environment relating to Australian corporate accounting and reporting; and apply the relevant concepts to “real” situations.
- Identify, discuss, evaluate and apply the relevant accounting standards relating to definition, recognition, measurement and disclosure requirements of a reporting entity’s assets, liabilities, equity, income and expenses.
- Apply and demonstrate the appropriate technical knowledge in analyzing company accounting information and problem solving; provide justification for their decisions by making references to relevant accounting standards; and communicate them to relevant stakeholders.
After learning Topic 2 Revaluations and impairment testing, you should gain a good understanding of issues involved with impairment testing according to the requirements of AASB 136 “impairment of assets”. Also Australian Securities and Investment Commission (ASIC) has identified incorrect impairment loss calculation and reporting as a major financial accounting issue. In 2017, ASIC announced that impairment remains an important area of focus, as it continues to see companies use unrealistic assumptions in testing that value of assets. The largest number of their findings continue to relate to impairment of non-financial assets and inappropriate accounting treatments.
- Search the academic journals listed in Section 6 and find three published empirical research papers on impairment of Assets. Based on your reading of AASB 136, research on the ASIC website and literature review of the 3 papers together, write up an eight hundred word (800) Business Report to present and discuss at least three challenges the companies face in calculating and reporting impairment loss
- Format of the report – Report should be written in as a business report which contains the following sections:
A. Executive summary
C. Main body
E. Reference list