Foundations in Accounting GPT Group and Suncorp Group

Question: Discuss about theFoundations in Accountingfor GPT Group and Suncorp Group. Answer: Introduction The present report deals with categorising various assets of GPT group and Suncorp Group. An analysis of methodology used for valuation of assets, depreciation of property, plant and equipment has been presented in the report. A comparison of the same has also been prescribed. An assessment regarding their compliance with applicable standards is also being done. Evaluation Of Assets In Accordance To Its Nature: The GPT Group ($ m) Assets Value Current Assets Cash and Cash Equivalents 79.3 Loans Receivable 200.9 Derivatives - Prepayments 7.3 Non- Current asset held for sale 197.2 Total Current Asset 484.7 Non- Current Assets Investment properties 7,375.9 Equity accounted investments 2,525.1 Loans Receivable 82.2 Intangible assets 35.5 Inventories 101.5 Property, Plant Equipment 14.1 Derivative assets 342.5 Deferred assets 30.2 Other Assets 14.8 Total non-current asset 10,251.8 Total Assets 11,006.5 Suncorp Group Ltd. ($ m) Assets Amount Current Assets Cash and Cash Equivalents 1,216 Receivables due from bank 595 Trading securities 1,384 Derivatives 659 Investment Securities 26,130 Loans Advances 51,735 Premiums Outstanding 2,493 Reinsurance and other recoveries 2,413 Deferred reinsurance assets 813 Deferred acquisition costs 661 Gross policy liabilities ceded under reinsurance 476 Deferred tax asset 197 Total Current Asset 88,772 Non- Current Assets Property, Plant Equipment 191 Goodwill and other intangible assets 5,783 Other Assets 905 Total non-current asset 6,879 Total Assets 95,651 Comparison Of Methods Used Property, Plant Equipment GPT Ltd has accounted the value of plant, property and equipment at a cost reduced by depreciation charge and impairment. In the case of depreciation straight line method has been followed by the company. The estimated life of the above asset is estimated between 3 to 40 years. The life of the asset is a judgemental decision and depends on the use of the asset (Amiraslani, Iatridis, and Pope, 2013.). In case the carrying amount of asset is more than the recoverable amount, the same is written down and accounted at estimated recoverable value. But in the case of Suncorp Group Ltd depreciation and amortisation is being charged in accordance with the utilisation of assets by the appropriate segments. Figure 1: Notes on valuation of Property, plant and equipment (Source: The GPT Group. Annual Financial Report, 2015) Intangible Assets All intangible assets of Suncorp Ltd are having a finite useful life except goodwill. Reassessment of useful life is being done. Accordingly, $36 million amortised expense in the year 2014 has been reassessed, and an impairment loss of $191 million on customer contract intangible asset and $156 million on goodwill allocated to Life- cash generating unit has been charged during the year. In the case of GPT group management rights and IT, development software is part of intangible. The estimated life of above assets ranges from 3 to 10 years. In case the carried value is more than recoverable amount; the same in amortised to the extent of the recoverable amount (Bond, Govendir and Wells, 2016). The same methodology is adopted by the company. Figure 2: Notes on Intangible assets and goodwill (Source: Suncorp Group Ltd. Directors Report and financial statement. 2015.) Conclusion The above report depicts that a better presentation is available regarding notes to accounts in GPT Ltd. AASB 15, AASB 9 and other relevant standards comply. The policy adopted by the companies for impairment is in accordance with applicable standards. The statements are prepared in accordance with Corporation Regulations 2001 and provide a true and fair view of the company in a financial statement. References Books Journal Amiraslani, H., Iatridis, G.E. Pope, P.F. (2013). Accounting for asset impairment: a test for IFRS compliance across Europe. Centre for Financial Analysis and Reporting Research (CeFARR). Bond, D., Govendir, B. Wells, P. (2016). An evaluation of asset impairments by Australian firms and whether they were impacted by AASB 136.Accounting Finance. Online The GPT Group. Annual Financial Report. (2015). Retrieved from https://www.gpt.com.au/getattachment/f5a62b00-23bc-4a76-b026-4ce4b90bd710/2015-Annual-Financial-Report.aspx. Suncorp Group Ltd. Directors Report and financial statement. (2015). [PDF]. Retrieved from https://www.suncorpgroup.com.au/sites/default/files/pdf/reports/SGL_2014_2015_DirectorsReportAndFinancialStatements_6.pdf.