ACCG224- Financial Accounting and Reporting

Task

Part I – Research based report (15%)

As a new accounting graduate you have recently joined the accounting department of an ASX listed company operating in the energy and extractive industry. To complete this assignment you will need

to select a suitable company yourself that meets the following criteria:

The company must be a constituent of the S&P/ASX 300

The company must be in the ‘Materials or Energy’ sector – you can identify all companies in this sector by sorting the list based on the third column of the table

The company must publish audited annual financial reports in English, fully complying with IFRS or AASB standards;

The company must have a 30 June year end; and

Your manager, the CFO, has sent you an email containing a Media Release (MR) from the Australian Securities & Investment Commission (ASIC).

You have been asked to undertake some research and prepare a report for presentation at the next meeting of the Audit Committee, to be held on 1 June 2018. Your report must address each of the following:

a) The role of ASIC as a Corporate Regulator, specifically in relation to their Financial Reporting Surveillance Program. In your discussion provide a summary of ASIC’s findings from their review financial reports in relation to impairment testing and asset values.

b) Provide a detailed explanation of the impairment write-down(s) made by your company in the year ended 30 June 2017. Your explanation should include a discussion of the asset/s that were impaired, the amount of the impairment write-down, the indicators of impairment and relevant disclosures in the 30 June 2017 financial report in relation to impairment testing.

c) Based on your findings in part b, critically analyse to what extent the disclosures on impairment satisfy the fundamental and at least one of the enhancing qualitative characteristics of useful financial information. You will need to refer to AASB 136 paragraphs 126 - 133.

d) Based on your findings in part c, critically discuss to what extent the disclosures on Impairment align with the objective of general purpose financial reporting and, as a conclusion, recommend actions for improvement.