Woolworths Accounting Policy

In: Business and Management

Submitted By tanheyi
Words 1886
Pages 8
Executive summary:
This report is aiming to disclose how the Annual report of Woolworths for 2012 apply the accounting standard related to estimation uncertainty and accounting policy judgments. Furthermore, the potential gap between Woolworths’ current practice and the accounting standard requirements will also be discussed.

Paragraphs 122- 124 of AASB101 has explained the requirements of significant accounting policy judgments and paragraphs 125-133 has detailed what need to be done for estimation uncertainty.

According to these standards, Woolworths disclosed how the company determined the carrying amounts of assets and liabilities and explained the company’s policies to response the uncertainty due to foreign currency in their notes to the consolidated financial statement. Judgments about leases assets and liabilities and judgments about subsidiaries were also can be found in the notes.

However, it can be indicated that some potential gaps still exist between Woolworth’s report and the accounting standard. For example, there is no assumption for how to revalue the fair value of some tangible assets in specified circumstance. What’s more, the company did not mention the sensitivities of carrying amounts of inventories and how to face these sensitivities. Therefore, further improvements need to be done in the next year’s annual report of Woolworths.

Introduction:
This report is an evaluation of Woolworths’ Annual Report in 2012, it will judge whether notes to Woolworth’s financial statements satisfy the requirement of AASB101 related to estimates and accounting policy judgments.

Woolworths is one of the biggest retailers in Australia. Woolworths Limited is a company who owns not only supermarkets but also subsidiaries which includes Big W, Dick Smith, hotels and petrol (Woolworths Limited, 2012).

In main sections of this report, the…...

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