200974 Accounting Standards and Governance

There have been changes in the accounting framework for leases and for understanding the changes, annual reports of Air New Zealand ltd and Qantas Ltd is considered for 2020. The annual report for both the companies shows that the adoption of AASB 16 and IFRS 16 brought about a retrospective change in the reporting process for leases (Davern et al. 2019). As per the annual report of Air New Zealand ltd, the business recognised a right to use the asset for $ 1298 million. The annual report for the company shows that changes were made in the values of current assets and some liabilities and the same is portrayed in the table below:

In the case of Qantas ltd, there was a retrospective amendments made in the books of accounts due to change in accounting policies. Unrealised foreign exchange movements were recognised in the accounts and thereby transparency was maintained due to adoption of AASB 16 (Xu, Davidson and Cheong 2017). Following the guidelines of AASB 16, interest rate movements on lease liabilities were treated as modifications against the corresponding right of use asset and lease liability (Qantas Investors | Investor Centre 2021). The interest expense and depreciation amount recognition was also changed under the new standard.

Reference

Davern, , 2019. Implementing AASB 16 Leases: Are Preparers Ready?.

Previous reports - Results centre - annual and interim results - Investor centre | Air New Zealand – Australia (2021). Available at: https://www.airnewzealand.com.au/previous-reports (Accessed: 22 April 2021).

Qantas Investors | Investor Centre (2021). Available at: https://investor.qantas.com/investors/?page=annual-reports (Accessed: 22 April 2021).

Xu, W., Davidson, R.A. and Cheong, C.S., 2017. Converting financial statements: operating to capitalised leases. Pacific accounting review.

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