CS考试辅导 AASB 11 for classification and subsequent accounting methods. Finally stu – cscodehelp代写
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The purpose of this question is to consider the rules in AASB 11 for classification and subsequent accounting methods. Finally students must form an opinion on whether AASB 11 requirements are useful to financial statement users for their decisions.
Classification is based on the contractual rights and obligations of the parties to the arrangement AASB 11 para 8 or 14
Joint operation – joint operators have rights to individual assets and liabilities AASB 11 para 15
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Joint venture – joint venturers have rights to net assets of the arrangement AASB 11 para 16
Students cannot just state method. They need to say something about it as the question requires a description. Need to describe the line by line method and the equity accounting method.
Joint operation uses the line by line method (% consolidation) whereby joint operator includes on a line by line basis a % of the individual joint venture expenses, revenue, assets and liabilities in their separate financial statements.
Joint venture uses the equity accounting method which is a one line % measurement of the venturer’s interest in the joint venture’s net assets.
This is the part of the question where the student provides their own opinion in relation to the statement in the question that is both the classification and accounting rules under AASB 11 does or does not provide more useful information. To be a complete consideration, each student’s view needs to be supported by a reason. Each supporting reason will be considered on its merits, but most students will probably use the statement from the Parker article in the course pack. This article states the AASB 11 classification and accounting rules are superior as they increase consistency, transparency and comparability. Other supporting reasons that will be accepted are:
Venturers will only include assets they control and liabilities that are present obligations
Enhanced disclosures assist user understanding
If students are of the opinion that the AASB 11 approach does not provide useful information each supporting reason must also be considered in its merits. Possible supporting reasons could be:
Use of professional judgement may permit opportunities for earnings management
Lack of consistency in application
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