This assessment requirements are as follows: (Total 2000 words)Topic: Providing a business report on...

Question

This assessment requirements are as follows: (Total 2000 words)

Topic: Providing a business report on the evaluation of Fair Value Measurement (FVM) and a case study with special reference to the FVM using two selected ASX listed group companies

Part A:This part of the business report relates to a critical evaluation ofFair Value Measurementdebate in financial reporting.

Statement:

Laux and Leuz(2009) argue that “the fair value debate is far from over and much remains to be done” (p.833). As well, Whittington XXXXXXXXXXargues that “in a realistic market setting, the search for a universalmeasurement method may be fruitless and more appropriate approach to the measurement problem might be how to define a clear measurement objective and to select the measurement method that best meets that objective in the particular circumstances that exist in relation to each item in theaccounts”. (p.139)

Required:

Based on the above arguments, provide a business report on the relevance and critical evaluation of fair value measurement in contemporary businesses. In your demonstration, you should provide examples of FVM consequences along with its application/adaptations to a wide range of private and public sector organisations for financial reporting. The expectation is that a reasonable amount of research articles (academic and professional) is used in the body of the report.

For all other requirements please follow the instruction as suggested under section Submission of Assessment Tasks in COAC318 Corporate Accounting Unit Outline.

Reference (not least):

Laux, C., and C. Leuz, 2009, ‘The crisis of fair-value accounting: making sense of the recentdebate’,Accounting, Organizations and Society, Vol 34, pp XXXXXXXXXXabstract is available on Google Scholar–you are free to acquire this article from other sources)

Whittington, G., 2008, ‘Fair value and the IASB/FASB conceptual framework project: an alternativeview’,ABACUS, Vol. 44, No. 2, pp XXXXXXXXXXthe PDF version of this article is uploaded on Week 5 lecture folder on Moodle)

IFRS13/AASB13 Fair Value Measurement Link (available online):

https://www.aasb.gov.au/admin/file/content105/c9/AASB13_08-15.pdf

ED77 by IPSASB link:

https://www.ipsasb.org/publications/exposure-draft-ed-77-measurement

Kent Institute Australia Pty. Ltd.

Assessment Brief

Version: 4 March 2022ABN XXXXXXXXXXCRICOS Code: 00161E RTO Code: 90458 Page2of5TEQSA Provider Number: PRV12051

Part B:This part of the business report relates to the content analyses on comparativeFair Value Measurement(FVM) disclosures made by two selected ASX listed companies in their contemporary financial reporting.

Tasks: You will be required to extract and investigate two ASX listed consolidated companies’recent financial reports on Fair Value disclosures. The annual financial reports of the selected ASX listed companies should be contemporary, i.e., you are supposed to collect 2020/2021 annual reports. The selection of companies will be assigned by the coordinator. The selection of ASX listed companies will be provided in Week 5 when the topic onFair Value Measurementis covered in the lecture.

You are required to download the financial reports of the two selected companies and identify the required information from the notes on fair value disclosures. You need to compare of how twocompanies’ fair valuedisclosures are made. In your demonstration, you need to identify and report,not least, on comparative fair value hierarchies, tiers, and methods used for differing classes of assets by the selected two companies. In addition, you need to provide the company profiles and the risk management aspects and strategies of the selected companies.

coac318-t1-2022-ab-3-assessment-3-ibr-knro13wx-1v1ly00m.pdf

Prince · Accepted Answer

Critical Assessment Fair Value Measurement
Sabina Khadgi
Department Name and University Name
Name of the Course 
Name of the Professor 
22nd May 2022
Executive Summary
The present assignment aims to highlight the application of the accounting principles for the analysis of the financial products and the ways, in which these applications have changed over the due course of time. Many companies have evolved in order to incorporate the changes in the application of the accounting principles due to encountering their downfall in the process of using the obsolete processes. In fact, they have started implementing value management to evaluate the assets and liabilities at the current market price. These processes have been highlighted in the report with some elaboration on the specific contexts of the two famous organisations of Australia — Westpac Banking Corporation and Commonwealth Bank.
Introduction 
Accounting principles for the evaluation of financial products in accounting records have changed over the past decade to better represent the economic realities faced by publicly traded corporations. The collapse of Enron, dot-com, WorldCom, and other companies has been seen as a remembrance that our corporate accounting model – with its focus on historical data and a single EPS number – is really out of date and uncommunicative to today’s modern business model, complicated financial structures, and relevant business risk. Different firms employ fair value management to evaluate assets and liabilities at the current market price. This allows businesses to have accurate market rates. The report will include details about fair value management. In another section of the report, fair value disclosures will be used to analyze business reports. These will aid in the proper understanding of the subject. The corporations will be chosen from the ASX stock exchange. Westpac Banking Corporation and Commonwealth Bank have been chosen.
Company Overview 
Westpac Banking Corp 
Westpac Banking Corporation, or just Westpac, is an Australian bank. They provide banking and financial services to Australian citizens. Founded in 1817, the company changed its name to Westpac in 1982. Their headquarters are in the Australian state of New South Wales. Lindsay Maxsted is the chairman of Westpac. It is Australia's very first and oldest banking organisation, and one of the country's "big four" banks. In FY21, the company earned $5,458 million in net profit attributable to the owners, up 138 percent from FY20.
Commonwealth Bank 
The Commonwealth Bank of Australia is an Australian multinational bank. They operate in Asia, New Zealand, Australia, and the United Kingdom. They were founded in 1911 and are headquartered in New South Wales, Australia. In August 2015, Commonwealth Bank was listed on the Australian Stock Exchange. The company's chairman is Catherine Livingstone. The company's net income after tax was $8,843 million in FY21, up 19.7% from FY20.
Part A: a critical assessment of the Fair Value Measurement argument in contemporary corporate financial reporting
Fair value measurement also is known as 'market to market' value because the market worth of some items is taken into account during its computation. This approach is used by many businesses to obtain accurate market information. Over the years, a number of inconsistencies have been noticed. Companies have recorded various liabilities and assets using this technique on the depending on market value, which gives the actual or estimated market price.
Fair value evaluation aids companies in obtaining accurate asset and liability appraisals over time (Lin et al.,2017). When the value of assets and liabilities increases or has the potential to increase, the management adjusts those values to reflect the current market price. This aids them in obtaining realistic business values. On the other hand, it is also reported that the adoption of valuation caused challenges for corporations when the market fell (Prodanova et al., 2019). This may result in a decline in assets, resulting in lower profitability for the company. This can be a frightening situation for businesses as well.

This assessment requirements are as follows: (Total 2000 words) Topic: Providing a business report on the evaluation of Fair Value Measurement (FVM) and a case study with special reference to the FVM...

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