Accounting GAAP Financial Statement Analysis SINGAPORE AIRLINE

Accounting GAAP Financial Statement Analysis SINGAPORE AIRLINE

Require study of SIA Financial Report

Question 1

Please refer to Singapore Airlines’ financial statements for the year ended 31 March 2017 for Questions 1 and 2.

Several issues were discussed in the Independent Auditors’ Report. Analyse the issues raised by auditors and its potential implications on SIA’s financial statements in the current and future periods. Explain why these issues were a key concern for auditors. (max 900 words)

Question 2

How does SIA’s estimate of useful lives and residual values disclosed in Note 2h compare with Delta Airlines (please refer to Delta Airlines Annual SEC filing Form 10-K dated 13 Feb 2017)? Do you agree that SIA has been aggressive with regards to its depreciation policy?

Analyse if a change in depreciation accounting policy is recommended for the firm. Why or why not? (max 450 words)

Question 3

Should human capital, being a firm’s core asset, be reflected on a company’s balance sheet? Why is this asset disregarded by accounting standards and what are the reasons against the recording of this intangible item? Show how a company can circumvent its exclusion from its financial statements? (max 400 words)

Question 4

Differentiate between a provision and other types of liabilities recognised on the statement of financial position (max 100 words)

The general manager of an electronic goods manufacturer is of the view that warranty liabilities should only be recognised when a warranty claim is made. What is the GAAP treatment of warranty claims and is this consistent with generally accepted accounting principles? (max 100 words)