Boral Limited (Boral) is the largest building and construction materials company in Australia. The company is principally engaged in supplying and manufacturing, construction and building materials. The products offered by the company include pre-mix concrete and asphalt, flyash, cement, quarry products, timber, windows, plasterboard, concrete masonry products, clay and concrete roof tiles, clay bricks, and pavers. It serves customers in the construction and building industries. It consists of seven key operating divisions, namely, Australian Construction Materials Timber, Cement, Construction Related Business, Clay & Concrete Products, USA and Plasterboard.
2. Key accounting policies and standards
Boral Limited’s …show more content…
(Boral Limited, 2010) Hence, we can say that the flexibility of Boral’s financial instruments is low.
Boral Limited reviews the carrying amount value of the Group’s assets excluding the inventories and deferred tax assets to determine the existence of any indication of impairment every year. However, an impairment loss in respect of goodwill is not reversed. On 6 July 2010, Boral Limited announced a strategic review which identified a number of poorer performing assets and greater value assets. In addition, managers shut a number of inefficient plants. (Media release, 2010) These operations will lead to a non-operational impairment adjustment of $289m. Therefore, Boral Limited has shown moderate flexibility in the management of the impairment adjustment.
4. Evaluate accounting strategies:
Revenue has a big impact on button-line profitability; managers are often paying more attention to manage revenue. But most of industries were affected by economic recession; building industry also suffered great loss in such environment. According to the table of building product results (Figure 3), sales revenue of Boral decreased 6-12% to $4599 million during the year of 30 June 2009 which compared to $4875 million in 2009 and even $5199 million in2008. Although, there is no significant positive earning management has been adopted by the managers, from the