Assessment Answers | Statement of Financial Position: ACT301

Assessment Answers | Statement of Financial Position: ACT301

1
Accounting Theory
Student Details
Course Details
Institutional
Professor
Deadline
2
Question D
Commonwealth Bank is an Australian internation …

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1
Accounting Theory
Student Details
Course Details
Institutional
Professor
Deadline
2
Question D
Commonwealth Bank is an Australian international bank with operations in countries
such as New Zealand, the United Kingdom, and the United States. In the section Consolidated
Statement of Financial Position.
They have divided liabilities in 2major category; we have non-current as well as current
liability; examples of current liabilities include, employee entitlement, Customer Give Back
Provision and Provision, Unearned premium liability, Tax obligations, Claims Liability, Trade
and other payable. While there are various examples of non-current liability including, employee
entitlement, Unearned premium liability, and Provision, Claims Liability. The liabilities are
measured in accordance with the underlying cost concept. When an obligation first arises, the
amount of the responsibility is equal to the current market worth of the resources normally
obtained when the transaction occurs. Liabilities are often measured, documented, and reported
in line with their own rules. Commonwealth Bank measures and reports liabilities on its balance
sheet at the amount required to cover and satisfy the obligation. The interest in the face amounts
of the accounts payable is normally taken from the face amount during the approach of reporting
the debt on the produced balance sheet. If obligations are not evaluated at cost, they are valued at
the fair market value of the services and commodities supplied. In the commonwealth’s
accounting system, liabilities are frequently shown on the balance sheet as the present value of
future payments. It is essential to monitor and evaluate the liabilities that typically develop at the
amount payable as aresult of the eternal states of the difference between the amount payable and
its present value (Barker & McGeachin, 2019).
Question E
3
According to the annual report, there is atax liability in the current liabilities section,
which is owing to the fact that tax requirements are due now. Furthermore, upon analysis of the
noncurrent liabilities, which include trade and other payables, Claims Liabilities, Unearned
premium liability, Provisions, and employee entitlements. These amounts correspond to the
report’s noncurrent items, which are to be settled for more than ayear and, of course, reflect the
amount that will be settled in the future. There are several scenarios in which liabilities are
regarded, which include; during the historical value whereby accounting standards are often tied
to the contractual grounds in which they were produced. Furthermore, liabilities are valued at
their discounted net values in the same way as assets are evaluated in the model of economics.
The organization’s accounting norms prescribe the valuation of present liabilities, which should
be based on the usual payable sum, while accounting practice improves in distinguishing
between long-term obligations and current liabilities. In terms of current obligations, there is a
little difference between the contractual value of liabilities and the discounted net value (Walker,
2020).
4
References
Barker, R., & McGeachin, A. (2019). The recognition and measurement of liabilities in ifrs.
Available at SSRN 1952739.
Walker, D. M. (2020). Commonwealth Bank of Australia.

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