In the current environment, the quality of financial reports and related disclosures is more important than ever for investors and to maintain confident and informed markets” (Australian Securities and Investments Commission (ASIC) 2020, p.1).

In the current environment, the quality of financial reports and related disclosures is more important than ever for investors and to maintain confident and informed markets” (Australian Securities and Investments Commission (ASIC) 2020, p.1).
March 29, 2021 No Comments Assignment Assignment help

���In the current environment, the quality of financial reports and related disclosures is more important than ever for investors and to maintain confident and informed markets” (Australian Securities and Investments Commission (ASIC) 2020, p.1). The ASIC Chair, James Shipton, further added that, ‘Entities with businesses adversely affected by the COVID-19 pandemic should focus on the reporting of asset values and financial position. Investors will expect clear disclosure about the impacts on an entity’s businesses, any risks and uncertainties, key assumptions, management strategies and future prospects” (Australian Securities and Investments Commission (ASIC) 2020, p.1). In July 2020, Australian Securities and Investments Commission (ASIC) issued two media releases: • 20-157MR Focuses for financial reporting under COVID-19 conditions – where one of the key focus areas for the annual reports were the reporting of asset values and financial position; and • 20-329MR ASIC review of 30 June 2020 financial reports where they focused on Asset value and impairment testing. The links to the two media releases are provided below (and you can also find the file on iLearn): • 20-157MR: https://asic.gov.au/about-asic/news-centre/find-a-media-release/2020-releases/20- 157mr-focuses-for-financial-reporting-under-covid-19-conditions/ • 20-329MR: https://asic.gov.au/about-asic/news-centre/find-a-media-release/2020-releases/20- 329mr-asic-review-of-30-june-2020-financial-reports/ (If the above links are not working, please copy the link and paste it in the browser.) In the 20-329MR ASIC raised concerns about the assessments of the recoverability of the carrying values of assets, including goodwill and property, plant and equipment. You were lucky to get an internship with the Australian Securities & Investments Commission’s (ASIC) Financial Reporting Surveillance Program that aims to improve the quality of financial reporting by reviewing the annual financial reports of a selection of listed companies and other significant entities, to monitor compliance with the Corporations Act and Australian Accounting Standards. The Head of the Financial Reporting Surveillance Program (your boss for the time of your internship), Zachary King*, plans for the next review round to focus on the quality of financial information in the annual reports of listed companies to ensure that asset values are appropriately reflected and disclosed in these companies’ latest annual reports. For preliminary research into this matter, he asks you to provide a report which highlights the current compliance with AASB136 Impairment of Assets by one listed company in this regard. For this, you must research into a listed ASX300 company of your choice and write a report addressing the following: * Fictitious Name S12021 ACCG2024 Page 2 a. A critical analysis of some of the complexities and key issues involved in impairment testing especially in light of the COVID-19 pandemic. In your analysis, you can refer to one or more publications issued by the ‘Big 4’ firms, accounting professional bodies or academic journals. (10 marks) b. Provide a detailed explanation of the impairment write-down(s) made by your company in the year ended 30 June 2020. Your explanation should include a discussion of: i. the asset/s that were impaired; ii. the type of estimations required to record the impairment; iii. the amount of the impairment write-down; and iv. relevant disclosures in the 30 June 2020 financial report in relation to impairment testing. (10 marks) c. Based on your findings in part b, critically discuss and recommend how your chosen company could have enhanced the treatments and disclosures for impairment for the year ended 30 June 2020 so that your company could provide clear disclosure about the adverse impacts on company’s businesses from the COVID-19 pandemic. Please refer to the Media Releases by ASIC and AASB136 Impairment of Assets for the areas of disclosures that are considered relevant. (10 marks) d. Based on your findings in part b and c, discuss how the treatments and disclosures suggested by you for the year ended 30 June 2020 meet the fundamental characteristics of financial reporting as per the Conceptual Framework? (10 marks) You need to attach a copy of the relevant parts of the annual report showing the disclosures made by the company for asset values and impairment. Do not attach the entire annual report. 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 index (www.asx300list.com). • The company must publish audited annual financial reports in English, fully complying with IFRS or AASB standards. and • The company must have a 30 June year end. • Choose the annual report for the financial year ended 30 June 2020. • The company should be from an industry that has been impacted by COVID- 19