ACC510 Financial Reporting

Explain how TDM Ltd should account for each of the above items. You must justify your answer by reference to the AASB Conceptual Framework’s definitions and recognition criteria for assets, liabilities, income and/or expenses as applicable. You must also state which General Ledger accounts are to be debited and credited.

• Discuss how the costs relating to the aircraft should be accounted for (treated) with respect to:
  1. Aircraft body;
  2. Engines;
  3. Fittings;
  4. Food preparation equipment.
  5. Where relevant consider/discuss issues such as:
     1. the treatment of the upgrades of cockpit equipment.
     2. accounting for inspections.

• Determine the expenses to be recognised for the financial year 1^stJuly 2016 to 30^th June 2017.
  1. Aircraft body;
  2. Engines;
  3. Fittings;
  4. Food preparation equipment;
  5. Total Expenses.

Outline the accounting treatment for brands under AASB 138/IAS 38, and discuss the difficulties for standard setters in allowing the recognition of all brands and formulas on statements of financial position.

1. Discuss possible reasons as to why provisions are recognised in the financial statements whilst contingent liabilities are not.
2. Determine whether the following items would be classified and recoded as liabilities or not (provide a brief explanation for your decision):
   1. Provision for long-service-leave;
   2. Dividends payable;
   3. Preference shares.