Assignment

Executive Summary
Due to lack of consistency in the measurement criteria for valuation of assets, various standards are issued by AASB to bring more comparability and transparency. The important standards from these are AASB 116, AASB 136, and AASB 138. AASB 138 deals with recognition, measurement and disclosure criteria related to assets. There is provision of impairment test in this which state that the values of various assets as appearing in the books of accounts to be compared with highest from value in use i. economic benefits from use and fair value of assets. AASB 136 deals with criteria regarding to capitalization of development cost incurred for developing intangible assets and state that cost of only development stage is to be capitalized that also if conditions of recognition and measurement of intangible assets fulfilled. AASB 116 state the usage of either cost or revaluation method for recording the plant, property and equipment, but revaluation method can be applied if there is active market for assets as carrying amount of assets is compared with fair market value in this.
Table of Contents
    Serial No.
    Topic
    Page No.
    1.
    Introduction
    1
    2.
    Report to the Accountant of Saferide Bus Company
    1
     2.1
    Requirements of AASB 136 regarding impairment of assets
    1
     2.2
    Reason for requirement of Cash Generating Units instead of single asset in impairment testing
    1
     2.3
    Factors to be considered for selection of CGU of Saferide Bus Company
    2
     2.4
    Identification of CGU of Saferide Bus Company
    2
    3.
    Circumstances in which development outlays can be capitalized as per AASB 138
    2
    4.
    Report on accounting measure and effect of proposal on West Ltd financial statements
    2-3
    5.
    Summary of accounting for revaluation of property, plant and equipment as per AASB 116
    3
    6.
    Report on decisions of the proposal for usage of revaluation model
    3
    7.
    Conclusion
    4
    8.
    References
    5
Introduction
The financial statement of an organization shows the financial position of the organization at a period of time. In earlier times, it was seen that the measures of various assets which were done as per historical value basis did not provide the good estimation of the true value of the company. So for overcoming all those issues and for providing more realistic valuation of the financial position various accounting standards are developed by AASB (Australian Accounting Standard Board). Some standards from these like AASB 136, AASB 138 and AASB 116 provides provisions regarding criteria for the recognition, measurement and reporting of tangible and intangible assets which developed or purchased under different conditions. These standards help in improving the global acceptance of financial statements prepared and also helps in keeping a check on the organization that they provide only true and fair information.
Report to the Accountant of Saferide Bus Company
Requirements of AASB 136 regarding impairment of assets: The purpose of AASB 136 standard is to ensure that no assets in the books of account are recorded at a value which is more as compared to value it can recover from the market from the same asset. This standard ensure that realistic values to be used in measurement of various assets. An impairment test is conducted as per this standard at the end of a particular reporting period or this can be done during a reporting period if there are external or internal sources that shows there is change in the value of any asset. Then fair estimate of the value is done and it is compared with value recorded in the books of accounts. If the value in books is more than estimated value, then impairment loss recorded and asset is brought to its estimated value in market. But the estimates should be realistic and made basis of value of the same asset in the market. This standard is applicable to all those assets for which there is no specific AASB standard for recognition, measurement and reporting criteria. Thus it helps in recording the assets at...