Critically evaluate the possible impact of the new leases standard on Woolworths

Your business report needs to be concise and informative. In preparing your report, you should investigate a range of issues:

(i) Provide a description of the leases arrangements and how these are currently being recognized in Woolworths financial statements based on the current requirements of AASB 117 Leases. You need to refer to the latest annual report for Woolworths.

(ii) Critically evaluate the current accounting treatment of leases under AASB 117 Leases and compare this to the new IFRS 16 Leases standard. Your evaluation should consider the impact of the changes to the new standard on financial reporting generally. Support your position and discussion with reference to theories covered in this unit and academic journal articles; and

(iii) Critically evaluate the possible impact of the new leases standard on Woolworths.

(iv) Provide a recommendation regarding treatment for existing leases and considerations about taking out new leases, which your CFO can take to the Board of Directors. Support your recommendation with reference to theories covered in this unit and academic journal articles.