Preview
Preview

Essay on Theoretical Analysis of Restoration Liability Accounting

:: 10 Works Cited
Length: 2711 words (7.7 double-spaced pages)
Rating: Aqua      
Open Document
Need writing help? Check your paper »



- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

I. Theoretical Analysis of Restoration Liability Accounting
Firms in the extractive industry usually follow a general pattern of evaluation & exploration, development, production, and finally rehabilitation of the site. According to the AASB Framework, “A liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.” (AASB Framework #49a, 2004, p.22) Looking deeper than just the legal form of the mining asset, the economic benefit from the land in such a scenario where the asset (mining site) is leased or bought would flow to the entity rather than its legal owner. Hence, the liabilities corresponding with the site shall also fall upon the company. One such liability is the cost of rehabilitation or restoration of the site at the end of its economic life.
The AASB Framework defines an Obligation as “a duty or responsibility to act or perform a certain way.” (AASB Framework #60, 2004, p.25) The restoration obligation should meet the criteria for a present obligation so as to fully satisfy the definition of a liability. In addition, this item should also meet the recognition criteria for a liability to be recorded in a company’s financial statements, whereby the future economic benefits associated with the item are probable and its cost can be measured reliably. (AASB Framework #83, 2004, p.30)
According to the AASB Framework, “An obligation normally arises only when the asset is delivered or the entity enters into an irrevocable agreement to acquire the asset. In the latter case, the irrevocable nature of the agreement means that the economic consequences of failing to honour the obligation, for exam...


... middle of paper ...


...Annual Report 2006.
BHP 2009. BHP Billiton Annual Report 2009.
BHP. 2006. Decommissioning, site rehabilitation and environmental costs [Online]. Available: http://www.wikinvest.com/stock/BHP_Billiton_(BHP)/Decommissioning_Site_Rehabilitation_Environmental_Costs [Accessed].
CPA 2010. Accounting Handbook 2010, Pearson Education Australia.
CPA 2010. CPA Program Ethics and Governance. Module 5 pp49
DEEGAN 2010. Australian Financial Accounting, 6th, Sydney, McGraw-Hill Australia. pp268-286, pp544-568
DOWNING, T. E. 2002. Avoiding New Poverty: Mining-Induced Displacement and Resettlement. Mining, Minerals and Sustainable Development, No. 58, pp15-19.
Joseph U Kish, J., Olin Mathieson, James Morris 1966. 3 New Executive Guides. The Journal of Accountancy, pp66-67.
LGL 2008. Lihir Gold Limited Annual Report 2008.
RIO 2009. Rio Tinto Annually Report 2009.






Click the button above to view the complete essay, speech, term paper, or research paper

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »







This essay is 100% guaranteed.


Title Length Color Rating  
Accurate Accounting Measurement: Fair Value Measurement Essay - ... On the other hand, when look at the statement of financial position , the net fair value of financial assets and financial liabilities approximates their carrying amounts as disclosed in the consolidated statement of financial position and notes to the financial statement. The fair value measurement hierarchy classified derivative hedging instrument as level 2. All other financial assets and liabilities carrying amounts are a reasonable approximation of fair values as they are short term trade receivable and payables....   [tags: historical cost accounting, liability] 1317 words
(3.8 pages)
Better Essays [preview]
A Cost Accounting System Analysis Essay - A cost accounting system is a framework used by firms to estimate the cost of their products for profitability analysis, inventory valuation and cost control. Its goal is to advise the management on the most appropriate course of action based on the cost efficiency and capability. Cost accounting provides the detailed cost information that management needs to control current operations and plan for the future. Costing is essential for every organization, as every manufacturing and other department has to be assigned accurate budget for proper operation (Hansen, Mowen and Guan, 2006)....   [tags: accounting, cost control, costing] 1059 words
(3 pages)
Strong Essays [preview]
Auditor Liability Essay - Auditor Liability Recently, the question of liability has become more prevalent in the practice of public accounting. The AICPA has been lobbying for liability reform in cases involving negligence or malpractice by public accountants. Opposition to this lobbying has come from consumer advocacy organizations, trial lawyers' associations, and state public interest groups to name a few. (Bolinger p. 53) The key to success for the AICPA, according to Gary M. Bolinger is creating an image as a, "profession performing high-quality services but faced with excessive liability burdens that harm the public interest." (Bolinger p.56) One should not be concerned, however, in the pending political outc...   [tags: Business Accounting] 2114 words
(6 pages)
Strong Essays [preview]
Financial Accounting Essay - The accounting system we use today started in Venice in renaissance period over 520 years ago. The trade business increased hugely during this time and all the financial recordings had to be written down to help people see how their business is doing. During that time in 1494 the first book about was published in accounting by Luca Paciolli and was called “The Collected Knowledge of Arithmetic, Geometry, Proportion and Proportionality”. He was called “The father of Accounting” and most of his described principles have been used up until this day....   [tags: Accounting]
:: 7 Works Cited
1499 words
(4.3 pages)
Powerful Essays [preview]
Overview Of Accounting Essay - Introduction This test is about an informational presentation to a group of small business owners with no accounting or financial knowledge. It is a report that identify the audiences, purposes, and natures of financial statements and managerial reports. In addition, it will explain the use of financial accounting information in making informed and ethical business decisions. Audiences, Purposes, and Natures of Financial Statements Prior to decide the audience, purpose, and natures of financial statement, it becomes necessary the definition of the words....   [tags: Business Accounting] 1014 words
(2.9 pages)
Strong Essays [preview]
Accounting Article Analysis Essay - Accounting Article Analysis One of the foremost problems facing the accounting profession today is the loss of respect that faces accountants in light of recent accounting scandals. In order to regain lost respect in the accounting profession an accountant must have integrity and ethics that are above and beyond the norm. This fact is true whether the accountant works for a business entity or for a government entity. In either situation the accountant is responsible for remaining steadfast, not only in professional behavior, but in personal behavior as well....   [tags: Business Accounting Ethics] 372 words
(1.1 pages)
Strong Essays [preview]
Essay about Accounting Analysis - The report focus on the financial statement analysis of Tick-Tock during 2005 to 2007.And at the same time provides the recommendation whether to purchase Tick-Tock for $275,000 or continue looking for another business. This financial statement has been divided into three segments: profitability, liquidity and financial stability .The first part is profitability which focuses on different aspect of return on investment & evaluating operating performance ratios. And the second segment concrete on the liquidity, as this ratio measures a company's ability to pay short-term obligations, the current ratio of 2007 shows that the firm has a good short-term financial strength to meet its current lia...   [tags: Accounting Finance Business] 1190 words
(3.4 pages)
Strong Essays [preview]
Essay about Accounting - According to the Generally Accepted Accounting Principles, T-Shirts by Tommy can account for the accident is to record an extraordinary item. Using the definition from our Intermediate Accounting textbook, extraordinary events are defined as, "…events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence" (Keiso). Because of the nature of the plane crash, and the fact that these types of accidents happen very rarely, it can definitely be categorized as extraordinary....   [tags: Business Analysis Accounting Finance] 1607 words
(4.6 pages)
Strong Essays [preview]
Accounting Essay - Accounting On September 28, 1998, Chairman of the U.S. Securities and Exchange Commission Arthur Levitt sounded the call to arms in the financial community. Levitt asked for, "immediate and coordinated action… to assure credibility and transparency" of financial reporting. Levitt’s speech emphasized the importance of clear financial reporting to those gathered at New York University. Reporting which has bowed to the pressures and tricks of earnings management. Levitt specifically addresses five of the most popular tricks used by firms to smooth earnings....   [tags: Accounting Finances Money Essays]
:: 15 Works Cited
2347 words
(6.7 pages)
Strong Essays [preview]
Essay about Accounting - Accounting Introduction The financial information is a very important matter in a company success. Allow them to see if they have been successful in the past, in the present and help them to predict a future performance of you company. The form, the use and the people involve with the financial and accounting information in a company is going to be developed in this report. Accounting Knowing the status of your company in every single area will allow you to improve your performance and developed strategies with a solid background for a successful operation....   [tags: Business Accounting Finance] 1235 words
(3.5 pages)
Strong Essays [preview]