What range of measures is used to determine amounts for these items in the reports of the individual companies?

The selected area here are the two famous banks of Australia. Range of measures used to determine amounts for the items is the amount of money here Australia is the country that has a decimal system for the currency, unit here is the dollar which is being divided into 100 cents. Notes from these banks in Australia are being issued in the form of denominations of $5, $10, $20, $50 and so on. On the other hand the coins in the denominations are the 5c, 10c, 20c, 50c and so on. Supply of the money is as measured as published by these banks that refers to the amount of cash that is also being held by the public plus deposits having some specified financial institutions. All such measures range from the narrowest category, money base and to the widest category with many other measures in between. Most of the measures that are being used for the determination of the items by the selected companies are: (Hossain, 2011)

Money base: This comprises of the different holdings of the notes along with the coins by a private sector, deposition of the bank liabilities to the different private sectors.

M3: This is the currency deposition of the private non-bank sector.

·         Do you think it is valid to add the items, given the measures used?

I think that it is completely valid to add all the items by the banks. There are different kind of the items in every company and their validity also varies from area to area depending upon their position. So according to me this is completely upon the company and the banks here which have been selected to add all these items for the proper working. But according to me this is absolutely valid to add all these items. (Jang, 2018)

·         How would you interpret the total amount for property, plant and equipment in the financial statements?

Interpretation of the total amount for the property, plant and equipment in the financial statement can be done by the help of a formula which is:

Net PPE = Gross PPE + Capital Expenditures – Accumulated Depreciation

Back in May 2017, these two banks owned a machinery with the gross value of $5,000,000. Accumulated depreciation for the same kind of machinery was $2,100,000. Because of the wear and the tearing of a machinery, the banks decided to purchase another one so it makes 1,000,000 in the list of new equipment. For this whole period or duration, the expense for the depreciation for the old and new equipment is $150,000

So in average the ending balance is $3,750,000. This has been found by taking the $5,000,000 + $1,000,000-$2,100,000-$150,000. (Kundu, 2019)

This is one of the basis and general formula that can be used by the companies, other formulas are also available but they are much more complicated and twisted one. This one can be understood by anyone because they don’t require complicated things like going in deep about the different studies.

Compare the measures used by the different companies for similar items. Are there any inconsistencies in how similar items are measured by the different companies?

Every company has their own measures for the selling of different items. But here for this report as we have selected the top two famous banks from Australia and according to their different studies and reading information about them it has been found out that both of these major banks almost use the same kind of the strategies for making their customers but somehow their policies do vary from one another to some aspects. Yes to some extent it can be said here that inconsistency have been found out for their different users because policies differ from one bank to the other and in the same manner to make more customers by making a different list of benefits for their customers on different scale.

2. Discuss the factors that accountants should consider when setting up company accounting policy relating to PPE

Here are some of the factors that accountants should consider. There is a particular nature of the PPE assets and these assets are the ones that needs to be fixed regularly or in other case they only need to get replaced for the prevention of different equipment failure or the last one is to adopt the more sophisticated kind of a technology to make the company work in an appropriate and better way. It is pretty much normal for the different companies to repair or even replace some of the old things or even the automobiles with the new assets when they feel like changing it or when it becomes really important and necessary. General policy for the accountants here is that repairing and replacement along with the maintenance work is being expensed. While all these replacements of the different assets are being capitalized. Repairing is the part that is really easy to record and one can also maintain their record without getting worried. It is simple a debit, repair or the maintenance expense along with the credit to get cashed. Replacements here no doubt are considered to be bit complicated. For the sake of doing replacements, the old cost of the assets are being de-recognized from the book of a company and then the cost for the replacement is being reorganized or recorded. These are some of some of the important factors which needs to be considered while setting up the company for the accounting policy that relates to the PPE. (Yousefinejad, 2017)

3. Detail your view on the subsequent measurement of PPE and provide recommendations to accounting standard setters.

There are different kind of the subsequent measurement of PPE, It cost up the model that contains different subgroups like different assets are being carried out at its cost that is less than any of the accumulated depreciation along with the accumulated impairment loss as well. Any kind of the increase in the fair value of the PPE item won’t be recognized that easily. Depreciation is the part that is based upon the cost that is less residual value. Next one is the Revaluation model and it consists of different parts, asset is the one that is being carried out at its revalued amount that is its fair value at the data of revaluation that is way less subsequent along with the impairment as well. Any kind of the model can also be selected easily if all the fair value can be measured out reliably. When the PPE is being revalued, all of the fair value can be measured reliably. This kind of revaluation needs to be done on regular basis. Some of the other major component of the PP&E formula is depreciation.  Depreciation reduces the value of property, plant, and equipment on the balance sheet as the value of assets is lowered over time due to wear and tear and the reduction of their useful life.  The depreciation expense is used to reduce the value of the net balance and it flows to the income statement as an expense. The easiest way to keep track of fixed capital assets is with a schedule.  This is the type of analysis a financial analyst would prepare and maintain for a company in order to prepare complete financial statements or build a financial model. (Net, 2018)

References of Review and evaluate the PPE disclosure of your selected companies which may include:

Hossain, M. S. (2011). Disclosure of Property, Plant and Equipment as per BAS# 16: A Study on Selected Pharmaceutical Companies in Bangladesh. . The Millennium University Journal, , 1-11.

Jang, G. B. (2018). Effects of Macro-economic Factors on Property, Plant, and Equipment Revaluation Decisions: Evidence from Korean Companies. 63-86.

Kundu, S. (2019). AN OBSERVATION OF DISCLOSURE PRACTICE REGARDING PROPERTY, PLANT AND EQUIPMENT ON TEN LISTED INDIAN COMPANIES. 85-90.

Net, A. R. (2018). Property, Plant & Equipment.

Yousefinejad, M. A. (2017). Value Relevance of Other Comprehensive Income and Its Available-For-Sale Financial Instruments (AFS) and Revaluation Surplus of Property, Plant and Equipment (REV) Components. Journal of Accounting and Governance,, 133-143.