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| Amcor Limited | 22743 Business Valuation and Financial Analysis | | | | | group assignment 2 | Muhammad Farhan | 11340041 | Zahid Mahmood | 11473485 | Table of Contents Executive Summary 3 Accounting Analysis 3 1. Accounting Policies and Standards 3 Revenue Recognition (AASB 118): 3 Property, Plant & Equipment (PPE) (AASB 116): 3 Intangible Assets (AASB 3, AASB 138): 4 Borrowing Costs (AASB 123): 4 2. Flexibility in Selecting the Key Accounting Policies 4 3. Accounting Strategy Employed by Management & Incentives 5 4. Quality of Disclosure: 5 5. Potential Accounting Numbers and Undoing Distortions 6 Financial Analysis 6 Executive Summary Having considered the economic…show more content…
Having strategically acquired rival businesses in the global financial crisis, set up its Botany Paper Mill and making its Australian division independent, Amcor expects its financials to improve dramatically as the ramifications of its moves unfold. Revenue Recognition (AASB 118): “Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, allowances and discounts. Revenue is recognised when the risks and rewards of ownership have transferred to the customer. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, the costs incurred or to be incurred cannot be measured reliably, there is risk of return of goods or there is continuing management involvement with the goods.” (Amcor Limited, 2012, p. 62). The business’ main source of income is sales revenue from packaging solutions and products across the globe. Flexible and Film Packaging has contributed around 40 % of the revenue as shown in graph 3 in appendix A.. Amcor also generates revenue from dividend income, being recognized when rights to receive dividend are established. Property, Plant & Equipment (PPE) (AASB 116): “Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item including borrowing costs that are related to the
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