Dimalaluan, Clark Lawrence

Movilla, Jea

PILIPINAS SHELL PETROLEUM CORPORATION ANALYSIS

ACCOUNTING FINANCIAL STATEMENT ANALYSIS
PRINCIPLE
IAS 36: Provisions for impairment of The establishment of these
Impairment of receivables provisions exists since not all
Assets seeks to Provision for impairment of receivables will be able to collect all
ensure that an entities receivables is established when of their receivables. Provisions exist
assets are not carried there is objective evidence that because this would enable the
more than their the Company will not company to prepare for unexpected
recoverable amount be able to collect all amounts changes in their sales. A company
due according to the original is deemed prepare for unexpected
terms of the receivables. changes if their estimations are too
Impairment of Assets seeks to ensure that an entity 's assets are not carried at more than their recoverable amount (i.e. the higher of fair value less cos ts of d isposal and value in u se)

far from the actual impairment.

IFRS 13: Fair Value Trade receivables arising from Fair valuation of assets is followed
Measurements regular sales with average because the company would be
requires or permit fair credit term of 30 to 60 days and able to measure the value of their
value measurements other current receivables are assets. This would allow to disclose
or disclosures and initially recorded at fair value their assets to the public with ease
provides a single and subsequently measured at and the public would understand
IFRS framework for amortized cost, less provision why such assets are valuated at
measuring fair value for impairment. this specific cost
and requires Fair value approximates
disclosures about fair invoice amount due to short-
value measurements. term nature of the financial
The standard define assets.
fair value on the basis Other long-term receivables
of an “exit price” are recognized initially at fair
notion and uses a value and subsequently
“fair-value hierarchy”, measured at amortized cost
which results in a using the effective interest
market based, rather method, less provision for
than an entity specific impairment.
measurement
IAS 39: Financial Loans and receivables are Having a good recognition on all
Instruments: non-derivative financial assets your account titles would be able to
Recognition and with fixed or determinable make a company be understood by
Measurement payments that are not quoted the general public. Not being able
Financial statements in an active market and where to use proper title would confuse
are initially recognized management has no intention the users and would appear
when an entity of trading. These are included useless to them as they won’t be
becomes a party to in current assets, except able to understand what is written
the contractual for maturities greater than 12
provisions of the months after the statement of
instruments, and are financial position date, in
classified into various which case, these are
categorized classified as non-current
depending upon the assets.
type of instrument,
which then determines
the subsequent
measurement of the
instruments (typically
amortized cost of fair
value)