Accounting Theory and Current Issue

 ACCOUNTING THEORY AND CURRENT ISSUE

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Executive Summary

In the following report, the accounting policies of Medibank Insurance and NIB Insurance is discussed. There are two parts of this report. The first part consists of the evaluation of the accounting policies and estimates applied by the selected organisation. These policies are critically evaluated further so that the quality of their applicability can be identified in the company. The second part consists of the investigative report which is based on the accounting and reporting strategy choices of the managers. In this section, the key accounting policies of the selected company are discussed, accounting flexibility is highlighted, the evaluation of accounting strategy is done, the quality of disclosures are prompted and the potential threats are identified.

Table of Contents

Executive Summary        2

Introduction        4

Accounting policies and estimates        4

Medibank Insurance        4

Impairment of assets accounting policy        4

Financial assets and financial liabilities accounting policy        5

Goods and Services Tax (GST) accounting policy        5

NIB Insurance        5

a) Basis of preparation        6

b) New and amended standards adopted by the Group        6

Investigative report on the Managers’ Accounting Strategy and Reporting Strategy choices        7

Identify Key Accounting Policies        7

Impairment of assets accounting policy        7

Financial assets and financial liabilities accounting policy        7

Goods and Services Tax (GST) accounting policy        8

Evaluate Accounting Strategy        8

Remuneration strategy        8

Evaluate the Quality of Disclosure        10

Identify Potential Red Flags        12

Conclusion        12

References        13

Introduction

In the following report, the accounting policies of Medibank Insurance and NIB Insurance is discussed. There are two parts of this report. The first part consists of the evaluation of the accounting policies and estimates applied by the selected organisation. These policies are critically evaluated further so that the quality of their applicability can be identified in the company. The second part consists of the investigative report which is based on the accounting and reporting strategy choices of the managers. In this section, the key accounting policies of the selected company are discussed, accounting flexibility is highlighted, the evaluation of accounting strategy is done, the quality of disclosures are prompted and the potential threats are identified.