Contents

Executive Summary 2
Introduction 3
Current accounting policies and relative accounting standards 4
Accounting policies 4
Judgement in applying accounting standards 4
AASB101 4
Sources of estimation and uncertainty 5
AASB 101 5
AASB 108 5
The current accounting practice of Discovery Metals 7
Property, Plant and Equipment 7
Impairment of assets 8
Provision 9
The potential gap 10
Recommendation 10
Conclusion 11
Reference 12
Appendix A 13

Executive Summary

The purpose of this research report is to analyse whether disclosures in Discovery Metals’ annual report comply with the requirements in Australian Accounting Standards (accounting estimate and accounting policy judgement). The main part of the report is divided into three main parts which are relative accounting standards and policies, company’s current accounting practice and the potential differences between company’s current practice and the accounting standard requirements. The scope of the research report is limited by the Australian Accounting Standard Board (AASB) that it mainly focuses on AASB 101 and AASB 108.

Introduction

On 26 June 2012, Australian Securities and Investments Commission (ASIC) released the results of its analysis of financial reports for years and half-years ended 31 December 2011. Although the regulation of financial reporting in Australia is in a high standard, the ASIC still found some flaws, at a result the ASCI published its areas of new focus for 30 June 2012 financial reports (ASIC 2012). Since the Board was care about whether the annual report of the company has complied with the Australian Accounting Standards Board (AASB) or/and ASIC requirements, the Chief Financial Officer (CFO) authorised the accounting department to prepare a business research report in relation to the disclosures (mainly focuses on accounting estimation and