Non-current assets

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Coursework 2: Case Study (15%)

The objective of the case study is to assess understanding of complex business

environment and to analyse the financial and non financial data, exercise professional

and ethical judgment and develop conclusions and recommendations.

All companies make investment in non current assets. Accounting for these non

current assets is subjected to a number of protocols where revaluation, depreciation,

and disposal of them are also given consideration. IAS 16/MFRS 116 Property, Plant

and Equipment (PPE) prescribes the accounting treatment for property, plant and

equipment so that users of the financial statements can discern information about an

entity’s investment in its PPE and the changes in such investment. IAS 40/MFRS 140

Investment Property relates to ‘ property (land or buildings) held (by the owner or by

the lessee as a right of use asset) to earn rentals or for capital appreciation of both’

(IAS 40, para 5).

Both standards of IAS 16 and IAS 40 are very similar in nature and share certain

common guidelines as well. However, it should be noted that the differences between

IAS 16 and IAS 40 will be affecting the company’s performance reporting. To

determine the application of respective standards, depend on the nature, business

model and usage of the non current asset.

In accordance to the standards, the entities are permitted a choice in the subsequent

measurement for the non current assets to reduce the cost and burden of producing

financial statements. This often involves judgmental methodology throughout the

application of the respective standards and the information provided is crucial and

importance to the wider group of stakeholders.

Required:

Critically evaluate both accounting standards IAS 16 and IAS 40 together with the

impact on the company’s financial statements. (Note: You are required to select one

company that listed on Bursa Malaysia from any industry except financial sector in

writing a case study analysis).

 

Questions 1: (company: Genting group)

Introduction and background

 

1,

 

Identifies the key problems and issues in the case study

Uses own understanding of context and findings

Describes wider context

 

2,

—IAS about non-current assets

—IAS 16 and IAS 40

 

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