ACCT 3708 -...

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View Full Document Right Arrow Icon with ALP policy -> All companies to have a 29 per cent tax rate from 2013-2014 The retail and consumer industries are experiencing a period of market turmoil. Consumer confidence has fallen sharply, predicating a slowdown in retail sales. At the same time, the cost of doing business has also increased. Rents, interest, energy and wage costs are growing in a period in which sales are slowing down, within an environment of sustained competitive price and margin pressure. Against this backdrop is a reduced availability of debt facilities and a reduced capacity to refinance debt at previous rates, potentially producing opportunistic takeover situations. The business environment is changing. We are facing a global slowdown, volatility in commodity prices and increasing competition from both developed and emerging economies. There is also nervousness around interest rates, which is causing a sharp decline in consumer confidence. This has created an extremely challenging climate for retail and consumer goods companies. There are the immediate concerns of growing competitive pressures, an increase in the number of alternative sales channels, a blurring of roles between suppliers and retailers, and a shift in the balance of power to retailers. Proposals on lease accounting will significantly affect industries London, 18 August 2010 - The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) yesterday released a proposal to improve the accounting for leases under both IFRS and US GAAP. The proposal is designed to provide a single model for lease accounting for both lessees and lessors – a “right of use” approach. Ernst & Young’s Global IFRS Leader, Ruth Picker says, “The proposal represents a fundamental change to lease accounting. All assets and liabilities arising under lease contracts within the scope of the proposed standard would be recognized in the statement of financial position. The proposal is intended to address concerns about current accounting for leases under both IFRS and US GAAP, even though the relevant standards are similar. Concerns include the classification criteria between finance and operating leases, which can result in different accounting for economically similar lease transactions, and that material assets and obligations arising from operating leases are not recorded in the financial statements. We welcome the Boards’ efforts to create a converged and consistent approach to lease accounting but believe that there are important conceptual and practical issues that need to be resolved. Importantly, the new proposals represent a fundamentally different approach to recording executory contracts, which may have follow-on effects to other non-lease arrangements.” Impact on lessees
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This note was uploaded on 03/25/2012 for the course ACCT 3708 taught by Professor - during the Three '11 term at University of New South Wales.

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ACCT 3708 -...

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