Background:

COVID-19 has caused enormous disruption to the Australian and global economies. Most companies are operating under significantly different circumstances to those existing 12 months ago. In particular, the travel and tourism industry sector has been severely impacted.

The Australian Securities and Investments Commission (ASIC) requires corporate management to prudently review the measurement and recognition of the elements of the financial statements for the 30 June 2020 financial year, in response to emerging issues and changing circumstances that have impacted on businesses during the COVID-19 pandemic.

Evaluates, taking an agency theory lens:

- Whether Qantas management is likely to engage in "big bath accounting" via impairment of assets as a result of COVID-19, and

- Whether "big bath accounting" is aligned with shareholders' interest.