The paper "Financial Reporting Disclosures in the Australian Corporate Sector - CCA Ltd" is a perfect example of a finance and accounting case study. Accounting standards on asset impairment are set to direct procedures that an organization may follow in ensuring that the organization’ s assets are carried at a cost that is not more than its recoverable amount. Accounting standards regarding Write-downs of intangible assets with an indefinite life are those that cover assets that do not exist physically such as trademarks and exclusive rights among others. Goodwill also applies in asset impairment where it is a payment made by an acquirer expecting to get economic benefits in the future from assets that cannot be identified individually or recognized separately. ASIC (Australian Securities and Investments Commission) states the accounting standards that all operating entities should observe in matters of asset impairment such as goodwill allocation on cash-generating units, impairment testing, and key assumptions among others. CCA (Coca Cola Amatil) ltd has its own accounting standards which it feels that they do not fully comply with the requirements of ASIC particularly on the matters of asset impairment.
There is, therefore, a need for all the companies to ensure that their accounting standards comply with those ASIC on all matters. ASIC accounting standards are also made in reference to the Australia Accounting Standards Board requirements which consider international accounting standards. Introduction Accounting standards on asset impairment are set to direct procedures that an organization may follow in ensuring that the organization’ s assets are carried at a cost that is not more than its recoverable amount. An asset may be said to be carried at an amount higher than its recoverable amount where the carrying amount is more than the amount that can be recovered when an asset is put to use or it is sold.
When such a situation occurs, the accounting standard on asset impairment requires that the organization should recognize the impairment loss for the asset (Yafeng, 2003).
Australian Accounting Standards Board, 2007, Compiled Accounting Standards AASB 136: Impairment of Assets, AASB, Melbourne Australia.
Australian Securities and Investments Commission (ASIC), 2011, Financial Reporting, retrieved on 13th September 2011 from http://www.asic.gov.au/asic/asic.nsf
Queensland Audit Office, 2004, QAO Guidelines on Accounting Standard AASB136: Impairment of Assets, QOA, The state of Quensland.
Tomasic, R., Bottomley, S. & AcQueen, R., 2002, Corporations law in Australia, Federation Press, Austria.
Yafeng, D., 2003, Asset impairment: an analysis on measurement attributes for productive assets, San Francisco, San Francisco State University.
Stickney, C., Weil, R., Scipper, K., & Francis, J., 2009, Financial accounting: an introduction to concepts, methods, and uses, Cengage Learning, Boston.
CCA, 2010, Annual Report, Sydney, Coca-Cola Amatil ltd.