Do Marion’s actions comply with the requirements of IAS 16/AASB 116?

Pringles Ltd is a large department store that has used the straight-line depreciation method since the company was first formed. For the year ended 30 June 2015, the company made a record profit and management expected these high profits to continue at least into 2016 and 2017, although economists were originally predicting an economic slowdown and a subsequent fall in profits in 2018 and 2019.

The general manager, Peter Pringle, approached the accountant, Marion Mason, and asked her if she could find a way to reduce the profit in the next couple of years and transfer it to 2018 and 2019 when things may not be going so well. “This would give us consistent profits over the next few years and keep our shareholders happy,” said Peter.

Although Marion did not feel that Peter’s reason for the change was justified, she was concerned that her contract with the company would not be renewed if she upset the general manager. After some consideration, Marion decided to change the depreciation method from the straight-line method to the sum-of-years’-digits method. Marion did not disclose this change in the notes to the financial statements as she felt that the reason given by Peter would not give a good impression.



Do Marion’s actions comply with the requirements of IAS 16/AASB 116?


Answer must be:

– 550 to 600 words

– Include at least 4 or more references using Harvard Anglia style referencing

– Use academic journal or related (use Harvard Anglia Style Referencing)

– References are not included in the 550 – 600 words




*In a separate paper*

Please point out in bullet points in which section or highlight the text in the IAS 16/AASB 16 does Marion comply or not comply with the requirements of IAS 16/AASB 16 because I’m going to make a power point presentation out of it.


*Be specific with the answer like Yes or No does she comply with the IAS 16/AASB 16*


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