You are the Chief Financial Officer (CFO) for a Milley Ltd, a book publisher located inBrisbane. The company's office and warehouse suffered damage during the recent floodsand storms in Brisbane. The company is fully insured and is also eligible forcompensation from the Queensland state government. However, the insurance assessorswill not complete their assessment and report until the end of April.In preparation for the presentation of financial reports for the year ending 31 March 2011,the Board of Directors wants some clarification about how the damage should be reportedin the annual accounts. In particular the Board wants to understand the recognition,measurement and disclosure requirements for:
1. Items of inventory destroyed or damaged
2. Collectability of accounts receivable
3. A contract to supply books that Milley cannot fulfil
4. Items of property, plant and equipment destroyed or damaged that need to bereplaced
5. Cleaning up costs that will be incurred in May 20116. Government assistance to be received
Requirements:
You are required to write a business research report to the Board of Directors of MilleyLtd including a cover page, an executive summary, a table of contents and references.
The report will require you to:
• undertake research and report on the floods in Queensland because this is anational board and some of the members are not aware of the extent of thedamage in Brisbane;
• discuss the recognition, measurement and disclosure issues for each of the sixitems listed above; and
• make recommendations in relation to recognition, measurement and disclosure ofeach of the six items under review.