HI6026 Accounting Theory and Current Issues

a) Should KGC Ltd. revalue its major PPE assets from historic cost to fair-market value? (Discuss the principles, potential issues, and risks). 30 b) The PP&E is estimated to have a replacement value of $20.5 billion AUD and a value in use of $12.0 billion AUD under current expected operations (i.e. seven years) but rises to $30 billion AUD if the contract is renewed for 10 years in addition to the current seven years and new viable ore bodies are found. What is the “True and Fair” value of the PP&E? (Explain). 40 c) Discuss the merits and risks of KGC Ltd. including a “Triple Bottom Line” aspect to its reporting approach 30 d) Discuss the nature of “Legitimacy” and the importance of KGC Ltd. maintaining legitimacy in the eyes of the traditional land-owners, the government of PNG, and the people of Australia. 20 e) Is the “Legitimacy” of KGC Ltd. at risk and what consequences may KGC Ltd. suffer if it loses “Legitimacy”. 30  f) Discuss how KGC Ltd. can restore its legitimacy (include a section on the two types of stakeholder theory in this discussion). 20 g) List the various ways that KGC Ltd. could record the cost of the harm associated with the sludge spill in its GPFS, discuss the pros-and-cons of each method, choose a method and defend your choice.



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