Preview

ACCG 224

Best Essays
Open Document
Open Document
2108 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
ACCG 224
ACCG 224 REPORT

COMPANY: DAVID JONES LTD

STUDENT NAME: SUDHARSAN SRIKANT

STUDENT NO: 42718961

TABLE OF CONTENTS
EXECUTIVE SUMMARY…………………………………. Page 3
INTRODUCTION:
CLASSIFICATION OF LEASES…………………………….................. Page 4
TREATMENT OF LEASES………………………………………………….. Page 5
NEW TREATMENT FOR LEASES:
CLASSIFICATION OF LEASES……………………………………………. Page 6
MEASUREMENT……………………………………………………………… Page 6
LEASE LIABILITY………………………………………………………………. Page 6
SUBSEQUENT MEASUREMENT AND REASSESSMENT………. Page 7
PRESENTATION………………………………………………………………. Page 7
IMPACT OF THE NEW ACCOUNTING SYSTEM... Page 8
CONCLUSION………………………………………………. Page 9
REFERENCES……………………………………………… Page 10

EXECUTIVE SUMMARY
Leases are an important way of financing for many big organizations but under the current accounting standards a majority of the leases are not reported under the lessee’s balance sheet and sometime the values are quite large and hence the existing standards have been criticized for failing to meet the needs of users of financial statements because they do not always provide a faithful representation of leasing transactions. Currently David Jones Ltd leases most of its offices and stores as it makes a lot of sense financially to do so, the firm has been making great profits over the last couple of years and is expected to grow at the same pace with new stores coming up in Perth and Melbourne. However, under the new accounting standards proposed by the IASB, an entity shall classify a lease as either a Type A lease or a Type B lease. An entity shall not reassess the classification after the commencement date. Hence leases now are classified differently from the “Operating and Finance leases” that existed under the previous accounting system and also treated in a different manner. Type A and Type B leases under



References: Dhaliwal, Dan, 2011. The Impact of Operating Leases on Firm Financial and Operating Risk.. Journal of Accounting, Auditing & Finance., [Online]. Volume 26 Issue 2, 151-197.. Available at: http://web.ebscohost.com.simsrad.net.ocs.mq.edu.au/ehost/detail?vid=3&sid=9317bb11-bcea-4e15-99f8-3930c890a726%40sessionmgr111&hid=103&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh&AN=67004285 [Accessed 23 September 2013]. http://www.pwc.com.au/assurance/ifrs/assets/proposed-accounting-standards/leases/Leases-Future-Leasing-Jun10.pdf. [Accessed 23 September 2013]. Mala, Rajni, 2013. Intermediate financial Accounting. 1st ed. Queensland: Wiley.

You May Also Find These Documents Helpful

  • Powerful Essays

    Demand can vary geographically and seasonally. The highly seasonal nature of demand at many locations makes it difficult for the company to manage the leasing. The lease rates of the market also vary over time due to the differential season. Owing to the competition of local markets and differential demand, the company may, therefore, have little control over the local spot rates. Consequently, the profit may not be as high as the company may want since the price is mostly controlled by the local market. In addition, the company has to compete not only with the Excel, but also the local businesses.…

    • 1823 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Acc 400

    • 795 Words
    • 4 Pages

    * Accounts receivables – Amount that is expected to be collected from the customers within the current accounting cycle…

    • 795 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    ACCG315

    • 442 Words
    • 2 Pages

    Finally we finished group report few days ago. I learnt a lot from other group members. Firstly, we got email address information about each other. Then we created a group message. The first group meeting was being hold in week 5. We actually did not talk anything about group project, instead of introduce ourselves. I think it is a good way to know each other first. Because it would be easier for each to talk about their own thoughts.…

    • 442 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Final Acc 340

    • 1422 Words
    • 4 Pages

    For each of the following course objectives, explain in 200-400 words what you learned in this course and how you could apply your learning of this course objective to your personal life or career. Refer to the syllabus to assist you in understanding what material was covered under each objective.…

    • 1422 Words
    • 4 Pages
    Powerful Essays
  • Good Essays

    Case 11 6 Lessee Ltd

    • 672 Words
    • 2 Pages

    Case 11-6 deals with Lessee Ltd., a company that operates in Britain and uses IFRS. The question in this case is how to classify a lease that Lessee, Ltd. acquired from Lessor Inc. The accounting standard that deals with leases under IFRS is IAS 17. IAS 17 was originally issued in September 1982 and was reissued in December 2003. It classifies leases as either finance leases or operating leases. Finance leases make it so that the lessee recognizes an asset and a liability and the lessor recognizes a receivable, basically transferring all the risks and benefits of ownership. Under operating leases, the lessor still recognizes the asset and the lessee recognizes an expense.…

    • 672 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Acc 105

    • 365 Words
    • 2 Pages

    The procedure that may be followed by the Human Resources Department in hiring new employees is:…

    • 365 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Acc 491

    • 1256 Words
    • 6 Pages

    | (Analytical procedures) In audit planning the audit of Construction Industry Resources, Inc., a building supply company. You have completed analytic procedures relevant to purchases and inventory. The results of these procedures are included in Figure 8.13.Figure 8.13. Selected Financial Information ($000)…

    • 1256 Words
    • 6 Pages
    Good Essays
  • Satisfactory Essays

    Acc 201

    • 272 Words
    • 2 Pages

    |(Actual input quantity x Actual price) |(Actual input quantity x Budgeted price) |(Budgeted input quantity |…

    • 272 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Lessee Ltd.- Lease Case

    • 954 Words
    • 4 Pages

    No, the junior accountant’s analysis is not correct in classifying the lease as an operating lease in accordance with IFRS. Whether or not a lease is classified as a finance or an operating lease depends on if all of the benefits as well as risks of ownership have been shifted from the lessor to the lessee.…

    • 954 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Health Care

    • 769 Words
    • 4 Pages

    5. “The health care borrower enters into a loan agreement with the governmental authority, the issuer of the bonds” (Zelman, McCue, & Glick, 2009).…

    • 769 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Acct 332 Db2

    • 358 Words
    • 2 Pages

    Question 4: Data integrity is essential for a company 's operations. Describe various steps companies can use to ensure the integrity of its information.…

    • 358 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    5. How material are assets acquired under capital leases in relation to total property and equipment?…

    • 638 Words
    • 3 Pages
    Powerful Essays
  • Good Essays

    Acc 290

    • 1919 Words
    • 8 Pages

    Whenever there is a question about what assignments are due, please remember this syllabus is considered the ruling document.…

    • 1919 Words
    • 8 Pages
    Good Essays
  • Satisfactory Essays

    Acct 429

    • 320 Words
    • 1 Page

    A tax issue that has been brought to me for assistance regarding an audit notice from the IRS for Peaceful Inc.…

    • 320 Words
    • 1 Page
    Satisfactory Essays
  • Powerful Essays

    Assigment 208

    • 3174 Words
    • 14 Pages

    Signs and symptoms of a stroke: Numbness of face, arm, or leg on one side of the body.…

    • 3174 Words
    • 14 Pages
    Powerful Essays