Blackmores

ASC 360-10 provides guidance on accounting for property, plant, and equipment, and the related accumulated depreciation on those assets. This Subtopic also includes guidance on the impairment or disposal of long-lived assets. ASC 360-10 notes that long-lived tangible assets include land and land improvements, buildings, machinery and equipment, and furniture and fixtures.

(2) Accumulated Depreciation- This account accumulates the depreciation over the course of the 12 months. As mentioned above, the appraisal value of PP&E is referred to as “PP&E, net”, which is the original value of $200,000 minus the accumulated depreciation for each month.

They accomplish this by sourcing the highest quality ingredients from around the world, combined with innovative research and development to deliver products that have become industry standards in the health supplements sector (Blackmores, 2014).

According to IAS 16, The cost of an item of property, plant and equipment comprises, its purchase price, including

a. (i.) According to FASB Statement of Concepts No. 6, paragraph 25, assets are probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. They represent probable future economic benefits controlled by the enterprise. According to FASB Statement of Concepts No 6, paragraph 80, expenses are outflows or other using up of assets or incurrences of liabilities (or a combination of both) during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity's ongoing major, or central, operations. Expenses are gross outflows

ASC 805-10-25-23 indicates that acquisition related costs shall account as expenses in the period in which the costs are incurred and received. However, cost to issue debt or equity securities shall be recognized in accordance with other applicable GAAP. In our case, we assume that acquisition cost is not allocated for issuing debt or equity securities.

Property and Equipment—Depreciation and amortization are provided on a straight-line basis over the estimated useful fives of the assets. The following table shows estimated useful lives of property and equipment.

Adjusting entries have four types in which provide a method of breaking down transactions. When a business purchases supplies in order to stock, this would be considered a prepaid expense. After an adjusting entry is made for a prepaid expense, the ledger would reflect the correct portion of that expense, in this case supplies, in which was incurred during a specific time. (Editorial Board, 2012, p. 42) A depreciation expense is a sub category of a prepaid expense. This occurs when an asset is allocated over a certain amount of time. An

Expenses follow natural classification or their functional classifications. Property, plant, and equipment acquired by restricted or unrestricted

> The cost principle requires that companies record plant assets at cost. Cost consists of all expenditures necessary to acquire an asset and make it

The objective of AASB 116 is to stipulate the accounting treatment for property, plant and equipment, make user can understand information about an entity’s investment in its property, plant and equipment, and the changes in entity’s investment. The main issue for property, plant and equipment in accounting are the recognition of relationship between assets, the determination of their carrying amounts, the depreciation charges and impairment losses. AASB 116 required the entity disclose it’s information of gross carrying amount, depreciation method, depreciation rate, useful lives of PPE, accumulated depreciation and reconciliation of carrying amount at beginning of the reporting period and at end of the reporting period.

Aurora’s financial performance from 1999 to 2002 was barren and discouraging. The financial ratios in the table above show a clear image of Aurora’s financial situation. It is obvious that Aurora has been facing economic pressures because of the business risks that arose from the intensive competition in the textile industry, which led to the decline in sale margins. Sales after 1999 quickly fell below standards, additionally, sales growth steadily declined at an average of 15.3% (-40% between 1999 and 2002). The company has failed to turn a profit for the past four years, although in 2002 Aurora showed a positive operating profit (See the table above). In order to conserve cash, Aurora was forced to closed several manufacturing operations. Profit margins, ROA, and ROE (which were always negative), and the asset turnover declined, indicating that Aurora has not contracted with assets as fast as the decline in sales. Furthermore, a snap shot into their inventory and accounts receivable indicate major signs of poor management as sales (outstanding) and days inventory have both significantly increased since 1999 (most of the firm’s current assets are account receivables and inventories). Raw material cost also reflect potential management issues, the net sales (as percentage) declined from 54.01% to 44.05%. Aurora needs to manage its expenses to generate profits overall.

To account for inventory, the company uses, first in first out policy. Property plant and equipment are recorded at cost less the accumulated depreciation amount. Depreciation is charged on straight line method

CCA is a leading company in the beverage industry in Australia offers a wide range of products in 4 different countries. During the 2014 financial year, the company’s profit margin was increased by 2.9% due to the reduction in company’s expense. The debt to equity ratio was decreased by 22.6% due to the decreases in financial liabilities. RGP is a small to medium size company in the beverage industry offers limited products in the domestic market. During the 2014 financial year, the company’s profit margin was increased by 4.1% due to the increase in revenue and reduction in expenses. The debt to equity ratio was decreased by 16.5% due to the increase in net profit, capital shares and decrease in financial liabilities.

According to this concept the asset is recorded in the books of accounts at the price paid for it and not at its market value. For example: if a business entity purchases a building valued at $15 million from a friend for $12 million, this asset would be recorded at $12 million and not at $ 15 million, because for the business entity the cost was $12 million and not $15 million.