RMIT International University Vietnam COVER PAGE Course Code: Course Name: Location where you study: Title

of Assignment: File(s) submitted Student name: ACCT2159 Corporate Accounting HCMC Vietnam Group Assignment

"Huyen Lu (Amon)" <s3311513 u.vn>

Student e-mail address:

Learning Facilitator in charge: Assignment due date: Date of submission: Number of pages including this one: Word Count:

Chi Bui T <s3311483 u.vn>, Giang Ng <s3324376 u.vn>, Linh Pham <s3324379 u.vn>, Thi Nguy <s3297100 u.vn>, Thuy Mai <s3160867 u.vn>, Vi Phan H <s3342458 u.vn>, Vy Pham <s3325175 u.vn

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a)Describe the main sources of regulation of financial reporting in Australia There are four main sources of regulation of financial reporting in Australia:

Australian Accounting Standards Board (AASB) The AASB began operation in 1991. Under the Australian Securities and Investments Commission Act 2001, it is an Australian Government agency. The roles of AASB are to develop a conceptual framework, to make accounting standards under s.334 of the Corporations Act 2001, and to formulate accounting standards for other purposes. AASB aims to create and maintain best quality of financial reporting standards for Australian economys sectors and to be acknowledged as facilitating the inclusion of the Australian community in global standard setting. The operations of AASB are observed by Financial Reporting Council (FRC).

Australian Securities and Investment Commission (ASIC) ASIC, an independent government part, is responsible for administering corporation legislation and reports to the Commonwealth Parliament and Treasurer. ASIC enforces a wide range of legislative provisions include insurance, superannuation, investments, and deposit-taking activities (not lending) in order to protect customers and markets from unfair practices, manipulation and fraud.

Australian Securities Exchange (ASX) ASX, Australians primary securities exchange, was formed by merging the Australian Stock Exchange and the Sydney Futures Exchange in 2006. ASX acts as a clearing house, market operator and payments system facilitator. ASX provides one set of listing rules for all trading floors in each capital city which help ensure that information is disseminated in an efficient and timely manner. ASX is regulated by ASIC.

Financial Reporting Council (FRC) FRC is responsible for overseeing the quality and effectiveness of financial reporting framework in Australia. The key functions of FRC are supervised accounting and auditing framework, providing advice base on the quality of audits conducted by Australian auditors, setting processes for public and private sectors, and advising the Minister about all of these matters. FRC oversights the functions of AASB

b) Identify and fully describe each of the major operating activities of your company . WorleyParsons is a leading provider of professional services to the resources & energy sectors and complex process industries. The major operating activities of the company during the financial year 2012 are:

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Hydrocarbons Minerals, metals & chemicals Power Infrastructure & Environment

c) What are the major changes in operating activities of your company, identified in the Directors Report According to the Annual report (2012) of WorleyParsons, there are some major changes in operating activities of the company: The Group increased its ownership interest in ARA WorleyParsons SA from 50% to 94% The company has entered into Deeds of Access, Indemnity and Insurance with certain officers of the Group. In the financial year the Group held ownership interests in the Exmouth power station asset which holds appropriate licenses for environment. By linking pay to performance via incentive plans, the company increases the concentration on total reward and provides motivation to Executives to achieve outcomes beyond the standard expected in the normal course of ongoing employment. d)Describe the key elements of the financial performance of your company, identified in the Directors Report The key elements of the financial performance of WorleyParsons during the year end 2012 are: Revenue was $7362.6 million, an increase of 24.7 % on the prior financial year. Operating cash inflow for the period was $437.5 million, compared to $293.8 million in 2011 Profit after tax was $353.2, which was smaller when compare with 2011 ($364.2) Cash at 30 June 2012 was $247.3 million (2011: $171.2 million). Earnings before interest taxes depreciation amortization (EBITDA) interest cover for 2012 was 12.5 times e)What is the carrying amount of each class of Property, Plant, and Equipment, at reporting date, of your company Property, plant and equipment Land and buildings Lease hold improvement Plant and equipment Net carrying amount 2012 $M 1.5 78.9 46.8

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Computer equipment Total

8.5 135.7

f) Describe the information disclosed about Property, Plant, and Equipment in the annual financial report of your company. Depreciation method: Property, plant and equipment, except for land are depreciated or amortized over their expected useful life to the consolidated entity which range from three to 10 years on a straight line basis. The expected useful life for each class of assets is as follow: Property, plant and equipment 3 10 years Leasehold improvements Based on estimated useful life of the improvement (Point J Note 2 Summary of significant accounting policies) Gross amount of Property, plant and equipment (at cost) and accumulated depreciation: At cost Property, plant and equipment Land and buildings Leasehold improvements Plant and equipment Computer equipment Total As at 30 June 2012 $M 1.6 144.2 140.8 63.2 349.8 Accumulated depreciation $M (0.1) (65.3) (94.0) (54.7) (214.1)

Reconciliation of carrying amount at the beginning and the end of the period: Addition due to acquisition of entities Additions during the period Disposal during the period Depreciation and amortization during the period Net difference arising on translation of foreign operation

Property, plant and equipment

$M Land and building Leasehold improvement Plant and equipment Computer equipment Total 0.1 2.3 2.4

$M 0.0 37.7 23.8 4.0 65.5

$M (0.1) (0.2) (0.6) (0.4) (1.3)

$M (0.0) (20.8) (14.1) (5.0) (39.9)

$M 0.0 1.1 (0.1) (0.1) 0.9

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g) Describe the accounting policies relating to Property, Plant, and Equipment adopted by your company. According to AASB 116 Property, plant and equipment (PPE) are defined as tangible items that: Held for use for the purpose of production or supply of goods or services, for rental or for other administrative purpose; and Are expected to be used for more than one period.

Recognition of an asset: An item of PPE shall be recognized as an asset if it can bring future economic benefit to the entity and the cost of that item can be measured reliably. Measurement at recognition: An item of PPE that qualified for recognition must be measured at its cost The element of its cost include: Its purchase price including tax. Any direct cost related to the bringing of the asset to the location and setting up for it to be capable of operating.

Measurement after recognition: PPE shall be carried at its cost less any accumulated depreciation and any accumulated impairment losses. All expenditures subsequently to the acquisition of the asset are included in the assets carrying value or recognized as a separate asset, if appropriate, when it is probable that those expenditure will bring future economic benefits to the entity. All other expenditures are expensed during the period in which they incurred. Other than land, all PPEs are depreciated based on straight line method. Estimation of useful life: All PPEs: 3 10 years Derecognition of an asset: The carrying amount of an item of PPE shall be derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain of loss arising from the disposal process of the item shall be included in the profit or loss of the period when the item is derecognized. h) What is the carrying amount of each class of Intangible Assets, at reporting date, of your company?

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Intangible assets Goodwill Customer contracts and relationships Trade names Computer software Favorable property leases Other Total As at 30 June 2012

2012 $M 1,568.7 35.9 18.0 81.4 0.8 1,704.8

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i)Describe the information disclosed about Intangible Assets in the annual financial reports of your company. Gross amount of Intangible assets (at cost) and accumulated amortization or impairment: At cost Intangible assets Goodwill Customer contracts and relationships Trade names Computer software Favorable property leases Other Total As at 30 June 2012 $M 1,570.3 127.2 69.9 191.1 9.1 3.2 1,970.8 Accumulated amortization or impairment $M (1.6) (91.3) (51.9) (109.7) (9.1) (2.4) (266.0)

Reconciliation of carrying amount at the beginning and the end of the period: Addition due to acquisition of entities Intangible assets Additions during the period Amortization during the period Net difference arising on translation of foreign operation $M 2.5 (3.2) 0.1 0.0 (0.1) (0.7)

Goodwill Customer contract and relationship Trade names Computer software Favorable property leases Other Total Impairment testing:

$M 37.0

$M 34.8 34.8

$M (22.8) (7.1) (31.6) (1.3) (0.3) (63.1)

0.0

37.0

+ Goodwill is considered an intangible asset with an indefinite life which is tested at least twice per year for impairment. The goodwill allocated to the groups of cash generating units (CGUs) and key assumptions are as follows: 2012 Hydrocarbons Power Minerals, Metal & Chemicals Infrastructure & Environment Total Goodwill $M 1,186.7 150.1 74.8 157.1 1,568.7 Pre-tax discount %pa. 12.8 13.0 14.5 15.4

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The calculation of value in use for the CUGs is most sensitive to the following assumptions: Growth rates used in years 1 to 5 Change in discount rates; and Long term growth rate ( the growth rate beyond 5 years is assumed to be 3% per annum)

Goodwill is not impaired at reporting date and there is no indicator that would lead to impairment. The business segments form the basis of the CGUs. + Other identifiable intangible assets with finite useful lives carried at cost less accumulated amortization and any accumulated impairment loss. Impairment assess for this type of intangible asset is performed at reporting date. j) Descried the accounting policies relating to Intangible Asset adopted by Worley Parksons According to Worley Parsonss annual report, intangible asset policies that were compiled by the company are as followed: Good will Goodwill that is obtained by the controlled entities is recognized in intangible assets and goodwill on acquisition of associates is included in investments in associates. Goodwill is not amortized but will be tested at lease twice a year, for any impairment in the carrying amount, or more frequently if required. Identifiable intangible assets. Intangible assets are initially measured at cost. The intangible asset that acquired in a business combination is cost by its fair value as at the date of acquisition. Intangible assets which are internally generated are not capitalized and payment is included in the profit and loss in the year in which the expenditure is incurred. Intangible assets with finite lives are amortized over the useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least each financial year end. The amortization expense on intangible assets with finite lives is recognized in the statement of financial performance on a straight line basis over the following periods: Customers contracts and relationships Trade names Favorable property leases Computer software

3-15 years 5-10 years 5 years 3-10 years

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Other

3-10 years

Intangible assets with indefinite useful lives are not amortized and were tested for impairment annually. The useful life of an intangible asset with an indefinite life is reviewed each reporting period.

k) Are any items of Property, Plant, and Equipment, and/or Intangible Assets of your company impaired? If so, identify which assets are impaired, and the amount of accumulated impairment losses. Accumulated Depreciation and Impairment PPE Land and Building Leasehold Improvement 2012 $M 0.1 65.3

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Plant and equipment Computer eqipment Total

94.0 54.7 214.1

Accumulated Amortization and Impairment Asset Goodwill Customer contracts and relationships Trade names Computer Software Favorable property leases Other Total 2012 $M 1.6 91.3 51.9 109.7 9.1 2.4 266

l) What is the carrying amount of leased assets and lease liabilities, at reporting date, of your company? Lease assets Lease Comitment 2012 $M 30

Lease liabilities Operating lease payments Lease incentive liability

2012 $M 172.2 5

m) Describe the information disclosed about leased assets and lease liabilities in the annual financial report of your company. According to the Wonley Parksons Annual Report (2012), leases are recognized into two groups: The Group as a lessee:
Finance leases are capitalized at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments.

Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

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 The minimum lease payments of operating leases are recognized as an expense on a straight line basis. Lease incentives are recognized in the statement of financial performance as an integral part of the total lease expense. The Group as a lessor: Income on finance leases is recognized on a basis reflecting a constant periodic return based on the lessors net investment outstanding in respect of the finance lease. Operating lease rental revenue is recognized on a straight line basis.

n) Who is the auditor of your company? Explain whether the Audit Report of your company is qualified. The Company was audited by Ernst & Young at 30 June 2012 From the opinion of Ernst & Young, the Audit Report of Worley Parsons is qualified because: The financial report of the company is in accordance with the Corporations Act 2001: Provide a true and fair view of the companys and consolidated entitys financial position as at 30 June 2012 Following with Australian Accounting Standards and the Corporations Regulations 2001 The Financial report complies with International Financial Reporting Standards.

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