Overview -
This task requires you to prepare a report individually to evaluate information provided in the annual report of a chosen company listed on the Australian Stock Exchange (ASX) according to related Australian accounting standards (AASBs). Please reserve the company that you have chosen in the discussion forum. First come first serve will apply.
The report should include an executive summary, a body of contents, a list of references and appendix. The word limit of the report is 1000 words (excluding executive summary, table of contents, references and appendix)
Use the link provided for Turnitin assignment submission to submit your assignment before the due date. After the due date, a separate link will be available for late submission with approved extension. The file name should include (in order) initial, your surname, your student number and company name in word document (.doc or .docx). For example: Smith Parker's file should be 'SParker1235456XYZ'. DO NOT submit the assignment to the Discussion Forum (as everyone can observe it).
Instructions for the report -
This task requires you to prepare a report to evaluate and comment on information regarding leases provided in the annual report of a company listed on the Australian Stock Exchange (ASX). Your comments or evaluation should comply with the requirements of relevant Australian accounting standards (AASBs).
PWC states that 'The new requirements (of IFRS 16) eliminate nearly all off balance sheet accounting for lessees and redefine many commonly used financial metrics such as the gearing ratio and EBITDA. This will increase comparability, but may also affect covenants, credit ratings, borrowing costs and your stakeholders' perception of you.' (Attached)
AASB 16 Leases was released in February 2016 in Australia. In this report, you should address the points outlined below:
Part A -
1) Discuss the recognition criteria for a lease according to relevant AASBs.
2) Identify the differences between finance lease and operating lease.
3) Identify at least one example of a finance lease and an operating lease reported in the annual report of the chosen company.
Part B -
From the perspective of the lessees, discuss the potential implication of the adoption of new AASB 16 Leases on assets, liabilities and debts, leverage, accounting-based debt covenants, expenses and profit of the chosen company. You should include the examples that you identified in part A3) in your discussion.
Further information regarding the report:
- The report should include an executive summary, a body of contents covering points listed above, and a reference list.
- You should refer to the requirements of AASB 16 Leases, AASB 110 Presentation of Financial Statements and AASB Conceptual Framework as the guidelines of your report.
- Other references used in the report such as annual report should be included in the reference list. Remember to provide a link of the annual report in the reference list.
- Sections extracted from the annual report or AASB to support your report should be included in the Appendix. Also, provide specific page numbers of the annual report and paragraph numbers of AASBs as in-text reference in your report such as annual report note 10 and AASB 101.26. If you choose to ignore this instruction, you will lose marks.
Assessment criteria: The quality of the report will be assessed based on the following four areas:
1) Demonstrate and identify the accounting concepts applied.
2) Use paragraphs from related Australian Accounting Standard as guidelines to support your discussion.
3) Provide example(s) from the annual report to illustrate the implementation of an accounting concept(s) or principle(s) discussed.
4) Demonstrate effective communication, referencing, logical presentation and integrated evaluation.
Attachment:- Assignment.rar