The paper entitled 'Australian Accounting Standards Board' is a perfect example of a financial and accounting case study. Australian Accounting Standards Board 140 is the Australian Board which is set to regulate the investment property. This was amended from the International Accounting Standards Board. These standards were made under the Australian corporations’ act 2001. It also contains the AASB amendments up to 2010. The main objective of the Australian Accounting Standards Board is to identify how the investment property should be treated in the accounting situation. AASB will be applied upon recognition, a measure of the investment property, and also will be applied when there is the disclosure of the property invested.
It is applied in the financial statements of the lessee of the property. AASB 140 excludes all matters which are discussed in the AASB 117 including; the types of finance leases, how income from the investment property is identified, and the transactions of selling and leasing back property. AASB 140 is not applicable in Agricultural related assets and minerals such as oils and gases (Australian Bureau of Statistics 2006).
The most common terms which are used in this Standard are; carrying amount- this refers to the recognition of the amount at which a property is valued. Cash is the amount of the monetary value paid for an asset. Fair value refers to monetary payment which the two parties agree to transact business. Finally, there is a property that refers to the investment and can be either a building or land. The purpose of the Australian Accounting Standards Board is to enhance the provision of the standards that guide the accountants in their financial obligations.
It also provides useful information to be used by managers of Companies when making decisions about investments. After separating the assets into individual and Company assets the accountants will be able to adjust their financial statements. Arguments and principals of AASBThey argue that any property under the lessee can be recognized and held responsible as the investment (Matolecsy & Wyatt 2006). This is only possible when the property can be defined as the property for investment and fair value is charged by the lessee. The assets by asset basis make this classification possible.
All the investment which is recognized as the property for investment will only apply fair value for its accounting. Any property that is held will earn profits or an appreciation (Chalmers & Godfrey 2006). Sometimes the investment property can earn both profits and appreciation of the capital. In this regard, the cash flows which are earned by the property investment are independent of other property. This aspect separates the property that is owned by the individual and the property investment. Examples of property investment include land which is used for long terms business, land that is held now whose future has not been recognized, a building that is held an organization, building which is not occupied but held for later lease and finally any property which is being maintained for the future investment (Chalmers & Godfrey 2006). On the other hand, the property which is not under AASB 140 includes the property which the owner intends to sale under the normal business operations, an investment which is being held and maintained by a third party as recognized in the law of contracts, the property of the owner like the land held by the owner for future use, an investment held by the owner for future improvement and any property of the owner which is due for disposal and finally we have the property which has been leased to another organization in the account of finance lease (Chalmers & Godfrey 2006).
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