Objective company: WEBSTER LIMITED
Objective: This task requires you to prepare a report to evaluate information provided in the annual report of a chosen company listed on the Australian Stock Exchange (ASX). Your comments or evaluation should comply with the requirements of relevant Australian accounting standards (AASBs). The report should address the points outlined below:
1) PPE: You should refer to the requirements of AASB 116 Property, Plant and Equipment and AASB 136 (FP) Impairment of Assets [for for-profit entities] as the guidelines for your report.
- Identify the PPE of the company by the end of the financial year
- Determine the measurement of PPE in the chosen company
- Comment on and discuss the depreciation method of the chosen company
- Explain whether there is impairment loss and how it is determined
- Comment on whether or not the disclosures of PPE in the annual report are sufficient for decision making
- Discuss how the choice of accounting policies impacts on financial performance
2) Income Taxes: You should refer to the requirements of AASB 112 (FP) Income Taxes [for for-profit entities] as the guidelines of your report.
- Comment on the recognition of current tax liabilities (assets) and tax expenses (income) reported in the annual report of the chosen company
- Determine whether there are deferred tax assets (DTAs) and deferred tax liabilities (DTLs) and explain the factors that led to DTAs and DTLs in the chosen company
- Discuss the measurement of current tax liabilities and assets, DTAs and DTLs in the annual report, and comment on whether it aligns with the requirements of AASB 112
- Are DTAs and DTLs offset against each other in the annual report?
- Are there any DTAs and DTLs that are not recognised in the profit and loss?
3) Equity/Shareholders' funds: Comment on the recognition and disclosure of share capital in the chosen company according to the requirements of AASB 101 (FP) Presentation of Financial Statements [for for-profit entities]
- List the components of Shareholder's Fund/Equity presented in the annual report of the chosen company, providing details of changes during the financial year
- Determine whether the company has reclassified any financial instrument as an equity instrument during the observed financial year. Explain why it is import to classify funds appropriately as debt or equity
- Comment on any items that are recorded against equity rather than as part of profit and loss
- Does the company provide you with sufficient information to assess its performance?