Accg224 Presentation Slides
Rio Tinto
Disclosure
Requirements of
Property, Plant and
Equipment
Purpose of Presentation:
1. Provide a description of Rio Tinto and its activities in relation to Property, Plant and Equipment (PPE)
2. Analyse how the disclosure requirements of PPE met by Rio Tinto satisfy the two fundamental characteristics of useful financial information along with two enhancing characteristics.
3. State the extent to which the disclosure requirements of PPE align with the objectives of general purpose financial reports
4. Recommend actions for improvement
Rio Tinto and PPE
British-Australian multinational metals and mining corporation Headquarters located in London and a management office in Melbourne
Disclosure requirements of PPE as of AASB 116
Rio Tinto’s 2013 annual report and its attempts to meet the disclosure requirements of PPE
Meets all requirements except one, 77f of the AASB
116
Rio Tinto and PPE
PPE and Qualitative characteristics Qualitative characteristics are used to make financial information more useful and achieve the purpose of financial reports.
We will look at the two fundamental characteristics relevance and faithful representation. Two enhancing characteristics understandability and comparability. Fundamental
Characteristics
Relevance
Relevance, predictive and/or confirmatory value, and materiality.
An example of relevance is the listing of useful lives of assets.
Faithful Representation
To be faithfully represented it must be complete, neutral and free from error.
Explanations provided are an example of complete information.
Due to absence of 77f, this information is not complete or free from error therefore not satisfying this qualitative characteristic.
Enhancing
Characteristics
Comparability
Similar information is presented for the entities PPE in two different years allowing comparability.
Financial information and methods used are analogous to other entities allowing comparability.
Understandability
Rio Tinto’s financial information
Disclosure
Requirements of
Property, Plant and
Equipment
Purpose of Presentation:
1. Provide a description of Rio Tinto and its activities in relation to Property, Plant and Equipment (PPE)
2. Analyse how the disclosure requirements of PPE met by Rio Tinto satisfy the two fundamental characteristics of useful financial information along with two enhancing characteristics.
3. State the extent to which the disclosure requirements of PPE align with the objectives of general purpose financial reports
4. Recommend actions for improvement
Rio Tinto and PPE
British-Australian multinational metals and mining corporation Headquarters located in London and a management office in Melbourne
Disclosure requirements of PPE as of AASB 116
Rio Tinto’s 2013 annual report and its attempts to meet the disclosure requirements of PPE
Meets all requirements except one, 77f of the AASB
116
Rio Tinto and PPE
PPE and Qualitative characteristics Qualitative characteristics are used to make financial information more useful and achieve the purpose of financial reports.
We will look at the two fundamental characteristics relevance and faithful representation. Two enhancing characteristics understandability and comparability. Fundamental
Characteristics
Relevance
Relevance, predictive and/or confirmatory value, and materiality.
An example of relevance is the listing of useful lives of assets.
Faithful Representation
To be faithfully represented it must be complete, neutral and free from error.
Explanations provided are an example of complete information.
Due to absence of 77f, this information is not complete or free from error therefore not satisfying this qualitative characteristic.
Enhancing
Characteristics
Comparability
Similar information is presented for the entities PPE in two different years allowing comparability.
Financial information and methods used are analogous to other entities allowing comparability.
Understandability
Rio Tinto’s financial information