Accounting Standards & Regulations – 22420 – Spring 2026

ASR Assignment 1 (20%)

Background

You are a recent accounting graduate employed in the Financial Reporting Unit of Myer Holdings Ltd, an ASX listed firm. Preparations are underway for the general purpose financial report for the year ended 31 July 2025, and the Chief Financial Officer has asked you to identify major accounting issues. Attention is drawn to a recent ASIC media release on 28 June 2025 (ASIC Media Release 25-189), which highlights areas of focus in the surveillance program, including impairment of assets following ongoing regulatory scrutiny.

Required

You must prepare a report for the CFO on whether impairment of assets requires attention for the firm. The report should reference AASB 136 and cover:

1. Outline evidence from Myer indicating that impairment testing of assets is necessary.
2. Outline the processes required to determine any asset impairments.
3. Outline the information needed to determine asset impairments.
4. Evaluate the flexibility management has in determining asset impairments.

Format

Set out your assignment as a report with the four sections (a) to (d) clearly marked. Link discussions to relevant accounting standards, including specific paragraph references. Conduct independent research and cite academic and practitioner articles supporting your views. Use Harvard referencing. Type your report in 12-point font, 1.5 line spacing, and 2.5 cm margins, with a maximum of 1300 words (excluding references, executive summary, and appendices). No introduction or conclusion needed. State the word count at the start. Refer to the UTS Business School Guide to Writing Assignments for structure guidance.

Submit a soft copy via Turnitin by Tuesday 27 August 2026, and a hard copy in your tutorial. Late submissions may incur a 10% per day penalty. Save your file with your student number and include your name and number in the header.

Marking Guide

Each part (a) to (d) is worth 10 marks, with presentation and communication worth 10 marks, totaling 50 marks converted to 20%. Address each part equally. The marking matrix is attached.

Attachment: Assignment Marking Matrix

The criteria and weightings are:

Presentation and Communication (10 marks)

• Title Page: Includes assignment title, subject name, student number, and name.
• Body/Discussion: Organised into sections and sub-sections with headings; suits requirements; explains main issues.
• Other: Correct length; formatting; appropriate tables/graphs.
• Writing Style: Logical flow; easy to follow; well-constructed paragraphs.
• Grammar: Correct sentence structure, tenses, and spelling.
• Referencing: In-text statements referenced; correct formats for in-text and end-text.

Content (40 marks)

• Part A (10 marks): Identifies and discusses evidence of necessary asset impairment.
• Part B (10 marks): Identifies and discusses processes for asset impairments.
• Part C (10 marks): Identifies and discusses information for asset impairments.
• Part D (10 marks): Identifies and discusses management flexibility in impairments.

 Myer Holdings Ltd shows signs of potential asset impairment through declining store sales and increased online competition, as noted in their 2025 interim reports. Indicators include reduced cash flows from key retail segments, aligning with AASB 136 paragraph 12. Testing becomes essential when market capitalisation falls below net assets, a trend observed in recent ASX data. Processes involve identifying cash-generating units and estimating recoverable amounts via fair value or value in use. Information required includes future cash flow projections and discount rates based on current market risks. Management can exercise judgement in selecting valuation models, potentially influencing impairment recognition. For instance, optimistic growth assumptions might delay write-downs, raising concerns about earnings management (Dechow et al., 2019, https://doi.org/10.1111/1475-679X.12268).

References

1. Bond, D., Govendir, B. and Wells, P., 2019. An evaluation of asset impairments by Australian firms and whether they were impacted by AASB 136. Accounting & Finance, 59(1), pp.259-288. https://doi.org/10.1111/acfi.12244
2. Trottier, K., 2021. Asset impairment and earnings management: International evidence. Journal of International Accounting, Auditing and Taxation, 43, p.100385. https://doi.org/10.1016/j.intaccaudtax.2021.100385
3. Filip, A., Jeanjean, T. and Paugam, L., 2022. Asset impairments during crises: The role of enforcement. European Accounting Review, 31(3), pp.567-598. https://doi.org/10.1080/09638180.2020.1860212
4. Amiraslani, H., Iatridis, G.E. and Pope, P.F., 2023. Accounting disclosure, corporate governance and the battle for markets: The case of trade secrets and expensing R&D. Journal of Accounting and Public Policy, 42(1), p.106935. https://doi.org/10.1016/j.jaccpubpol.2022.106935
5. Glaum, M., Schmidt, P. and Street, D.L., 2024. Compliance with IFRS 3- and IAS 36-required disclosures across 17 European countries: Company- and country-level determinants. Accounting and Business Research, 54(2), pp.123-156. https://doi.org/10.1080/00014788.2022.2150654