Assessment 3Assessment Type: Individual assessment – research report.Purpose: Assess students’...

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Assessment 3Assessment Type: Individual assessment – research report.Purpose: Assess students’ knowledge of relevant accounting standards. Students are required to prepare a research report which evaluates their interpretation of accounting standards. This assessment relates to learning outcomes a, b, c, d and e.Value: 20% Due Date: Week 10 Topic: Research based individual assignment.Task Details: Students are required to attempt the following two questions.1. A customer filed a lawsuit against Delta Ltd in December 2018. The lawsuit was for costs and damages allegedly incurred as a result of the failure of one of Delta Ltd’s electrical products. The amount claimed was $3 million. Delta Ltd’s lawyers have advised that the amount claimed by the customer is extortionate and that Delta has a good chance of winning the case. However, the lawyers have also advised that if Delta Ltd loses the case it is expected that costs and damages awarded would be $500,000.Required:A) Explain the accounting for contingent liabilities with reference to AASB 137.B) Under AASB 137, how should Delta Ltd disclose accounting implications of this lawsuit in itsfinancial statements as at 31 December 2018?2. In the article entitled ‘U.S. firms challenged to get “intangibles’’ on the books’, Byrnes and Aubin XXXXXXXXXXnoted that some companies in the United States were accounting for intangibles such as brands, patents, and information technology differently depending on whether they were developed internally or acquired. Different accounting treatments can have a large impact on accounting numbers where internally generated intangibles developed at low cost by one company are sold at significantmark ups to another company. Required:A) Explain the accounting for internally generated intangible assets and impairment of intangible assets with reference to AASB138/IAS 38 and AASB136/IAS36 respectively.B) Discuss any differences between accounting for internally generated intangible assets and acquired intangible assets in AASB 138/IAS 38.C) Discuss why companies may be reluctant to press for changes in AASB 138/ IAS 38 to require more recognition of internally generated intangible assets.Presentation: 1000 words (+/- 10%); short report format. Title page, executive summary, table of contents, appropriate headings and sub-headings, recommendations/findings/conclusions, in-text referencing and reference list (Harvard – Anglia style), attachments if relevant. Single spaced, font Times New Roman 12pt, Calibri 11pt or Arial 10pt. In text referencing and reference list are excluded from the word count.Marking Guide:Research – extent and application 30% Analysis 30% Recommendations 20% Communication 20%Total mark will be scaled to a mark out of 20 subject marks

Sweta · Accepted Answer

Financial Analysis of BHP Billiton
                                                                                                                                                  May 23, 2019
 “Case Study on AASB 137, AASB 138, AASB 136”
Table of Contents
Executive Summary	3
1 A. Accounting for contingent liabilities as per AASB 137	3
1 B. Disclosure of Accounting implications by Delta Ltd	3
2 A. Accounting for Internally Generated intangible Assets & Their Impairment	4
2 B. Difference Between Accounting for internally generated and acquired intangible Asset	4
2 C. Reasons for Companies reluctance for pressing for changes in AASB 138 for more recognition of intangible Assets	5
Conclusion	5
Reference List	6
Executive Summary
The report deals with the study and application of AASB 137, AASB 138 and AASB 136. AASB 137 lays down criteria for recognition of provisions and charging the expenses to financial statements and if any criteria for recognition is not fulfilled, it must be reported as contingent liability in the notes to financial statements. AASB 138 provides criteria for recognizing internally generated intangible assets wherein the cost incurred by company in development phase is capitalized on satisfaction of given criteria and research phase is treated as an expense. The report contains difference between acquired and internally generated assets and also discusses provisions for impairment as per AASB 136. 
1 A. Accounting for contingent liabilities as per AASB 137
AASB 137 lays down the criteria for recognizing and measuring the Provisions, Contingent liabilities & Contingent assets and also states the required disclosures for their effective representation.
Provisions are liability with uncertain amount or time. In order to the accounted it must arise as a consequence of past events and outflow of resources to satisfy the obligation must be probable (more than 50%) and the benefits to be paid must be reliably estimated. Provisions must be accounted if the cannot be avoided by the entities future actions. (AASB, 2015)
Contingent liabilities can be said to be a possible obligation from past events which depends on the outcome of future uncertain events or it may be present obligation from past event in which outflow of benefits is not probable (less than 50%) or the amount of benefits may not be reliably measured.

Assessment 3Assessment Type: Individual assessment – research report.Purpose: Assess students’ knowledge of relevant accounting standards. Students are required to prepare a research report which...

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