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What are contingent liabilities and how can they arise

Q1. Identify in the Financial Statements, the notes to the financial statements, and the statements of significant accounting policies those parts that relate to property, plant and equipment. Read these notes and then illustrate, on a line by line basis with reference to the material, how this information complies with the disclosure requirements of AASB116 and AASB136. Your illustrations in the notes and statements should refer to the specific paragraphs and sub-paragraphs of the disclosure requirements. (25 marks)


Q2. In addition to goodwill, what are the categories of intangible assets of this organisation? How are they recognized and measured? How were their useful lives estimated? What are the policies on impairment of intangible assets? (15 marks)


Q3. Where do provisions appear in the statement of financial position? What are the accounting policies with respect to long service leave? Giving the page and paragraph reference what value has been placed on long service leave? Why do dividends appear that are unrecognized as a provision? Justify your answer by reference to the appropriate paragraph in the accounting standards and cross reference to the section in the annual report. (15 marks)


Q4. What are contingent liabilities and how can they arise? Making reference to the accounting standards, how are contingent liabilities recognized and what are the disclosure policies? List the contingent liabilities of this organization and comment on the disclosure of these contingent liabilities. What are contingent assets and how should they be disclosed? (10 marks)


Q5. Using the financial statements calculate, and comment on, the following ratios: Current ratio, rate of return on total assets, times interest earned, the debt ratio and the P/E ratio. The market price of the ordinary shares at the close of business on 30th June 2016 for your company was $31.58. (15 marks)

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