Microsoft Word - Assignment ACCG8142 S2 2020.docx
ACCG8142 research assignment – due 29 September 2020
Indications of impairment
The Covid‐19 pandemic is affecting the economic prospects of businesses, significantly.
Economies have shrunk globally as borders close and trade declines. Economies that rely
upon international trade have gone into recession. Most other economies have been
pushed into recession globally, from reduced domestic demand caused by elevated
unemployment.
Businesses that rely upon international suppliers or international customers have stalled.
Businesses that rely upon domestic demand have stalled as communities are locked
down. Governments are supporting businesses and consumers in the short‐term, with
liquidity payments.
The World Trade Organisation predicts that the global trade will shrink 33% before the
end of the pandemic.
Required
Select a publicly listed company from the list at appendix 2. Obtain written approval from
the lecturer if you wish to select another company.
Analyse the latest financial and annual report of the company selected, to identify the
specific, economic risks to which that company is exposed.
Presume that the risk outlook illustrated in appendix 1 will emerge and that there are no
indicators that a return to economic growth is likely in the medium term.
Forecast financial effects on the company’s revenues, expenditures and on the values of
assets and liabilities, consequent to the risk outlook.
Write a 2,500‐word report that includes:
1. An explanation of the sources of impairment risk specific to the company selected.
2. Analysis and discussion of the forecast financial effects on the company selected, from
the global and local recessions. State all assumptions in detail and state the
accounting policies adopted in your analysis.
3. A discussion on whether the impairments identified and forecasts made in your
analysis affect the capacity of your company to report as a going concern.
Assessment
This assignment contributes 25% of your assessment and is marked out of 35. Marks are
awarded for both format and content. Appropriate referencing is required. Refer to
accounting standards as relevant. See appendix 3 for a marking grid used to assess this
assignment.
Reports must be uploaded into iLearn in either Word or PDF format.
Appendix 1 – outlook of economic risk
Level of
severity Macro Economic Conditions
9 Severe global depression over 2 years
8 Widespread business failures cascade through
economies, collapsing asset prices
7 A flood of business insolvencies, with capital
markets closing
6 Economies remain closed globally, with liquidity
drying up and recessions deepening
5 Global production stalls, with inputs blocked and
global demand for output collapsing
4 A sustained fall in consumer and business
sentiments, with widespread economic recessions
3 Governments pump liquidity into economies
through payments to consumers and businesses
2 Sovereign borders close, disrupting labour and
other inputs. Unemployment surges.
1 Uncontrolled, global transmission of Covid‐19
causes volatile global capital markets
0 Business as usual ‐ Fe
uary 2020
August 2020
Decembe
June 2021
Appendix 2 – list of companies
AIRLINES HOTEL GROUPS
Air New Zealand Hilton
Cathay Pacific Hyatt
Delta Airline IHG PLC
International Airlines Group Ma
iott
Japan Airlines Wyndham Hotels
Lufthansa
Qantas OIL & GAS
Singapore Airline BP Group
Chevron
AIRPORTS ExxonMobil
Australia Pacific Airports Corporation Royal Dutch Shell
Sydney Airport Limited Sinopec
CRUISE LINES TRAVEL COMPANIES
Carnival Corporation PLC Flight Centre travel Group Ltd
Genting HK Helloworld Travel Ltd
Norwegian Cruise Line Webjet Ltd
Royal Cari
ean
DEPARTMENT STORES
Harvey Norman Holdings Ltd
Myer Holdings Ltd
Appendix 3 – marking guide
FORMAT
Introduction 2
Clarity of discussion and format 3
Conclusion 2
CONTENT – clear explanations, analysis & discussion are required
Explanation of the sources of impairment risk to the company selected 8
Analysis and discussion of the forecast financial effects (impairment) 14
Discussion of the capacity to report as a going concern. 5
Appropriate referencing 1
Total 35