Executive summary
This paper is the analysis of the 2013 annual report of the Sonic Healthcare Limited. According to the research and analysis, the key accounting policies are AASB10, AASB101, AASB112, AASB118, AASB102, AASB116 and AASB107. Following these accounting standards, the flexibility of management on selecting the key accounting policies will be evaluated. The accounting strategy for SHL is increasingly stable and the company needs a good risk management as well. To apply for the sustainability issue, the company has its own policy and will report the emission of greenhouse gas to the country each year. Next comes the evaluation of the quality of the disclosure, followed by the analysis of the unusual changing of the borrowing cost expenses and the intangible assets. Finally, a summary of the company’s performance will be given.

Sonic Healthcare Limited
As with any healthcare provider, science and patients outlay the main focus of healthcare companies needs. Sonic Healthcare Limited (SH) started its operations in 1987 under the name of Sonic Technology Australia Limited, and during this time it acquired its first pathology practice the “Douglass Laboratories” in Sydney. Throughout a period of 25 years, it grew into an international company driven by providing independent services in medical diagnostics and multidisciplinary medical practices. It operations extended to 7 different countries worldwide (New Zealand, the United Kingdom, Germany, Switzerland, Belgium, Ireland and the USA), with its parent company located in Sydney.
SHL main activities include laboratory medicine and pathology, radiology, medical centers, occupational and insurance medical services, clinical trials, food and water testing. In order to achieve excellence, meet its preset goals, distinguish itself from other competitors, SH adheres to certain strategies. These strategies are personalized service for doctors and patients (such as doctor referring), respect for its people, company conscience (the company getting to know itself), operational excellence, professional and academic expertise. SH also abides by an environmental policy in coordination with sustainability.
2. Key Accounting Polices
Sonic Healthcare adopts several accounting policies that relate to its success and continuing improvement on an international basis. In the following paragraph we will list the significant accounting policies used by SH and the accounting standard which applies in respect to the policy adopted. Basis of preparation (AASB 101), Sonic healthcare adheres to the Australian accounting standards stated under the corporations’ act of 2001. The principles of consolidation (AASB 10), the consolidated financial statement includes all the liabilities and assets of the subsidiaries under the control of the parent sonic healthcare for the financial year beginning on the 1st of July and ending at the 30th of June. Income tax of 30% Australian company rate (AASB 112). Revenue recognition (AASB 118), revenue is recognized when probable cash inflows can be reliably measured. Inventories (AASB 102), they are assessed using the FIFO and are assessed at lower of cost and net realizable value. Property and plant and equipment (AASB 116), are valued in terms of historical cost minus any depreciation and impairment, for financial modeling they use the straight-line depreciation of assets and any impairment is recognized in the period the asset is reviewed. Cash and cash equivalents (AASB 107), Sonic includes in this account cash in hand, cash deposited at the bank and readily available cash deposited at financial institutions. As for dividends, a provision is included during the year they are declared but they are not distributed at year-end.
3. Flexibility management
Following above, the flexibility of management has available on selecting the key accounting policies will be evaluated. There are three main accounting policies will be discussed specifically.