Assignment
On 28 August 2014, Qantas announced an annual statutory loss after tax of $2.8 billion for the 12 months ended 30 June. This result included a massive $2.6 billion write-down of its international aircraft fleet. These losses were the largest in the airline’s history and were seen to represent ‘one of the biggest clearing of the decks in corporate history’
(Bartholomeusz 2014)
In the media release announcing the loss, Qantas CEO Alan Joyce was quoted: ‘There is no doubt today’s numbers are confronting’, yet he remained remarkably optimistic about the future, going on to say ‘We expect a rapid improvement in the Group’s financial performance — and a return to Underlying PBT profit in the first half of FY15’ (Qantas Group 2014).
Required
1.Summarise the requirements of AASB 136 in relation to indicators of impairment of assets.
2.Explain how such a massive impairment loss could be linked to any improved future performance.
3.Review the 2015 and 2016 annual reports of Qantas to determine if Alan Joyce’s optimism was justified.
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