Assignment 1
Value: 15%
Due date: 31-Aug-2015
Return date: 21-Sep-2015
Submission method options
Alternative submission method
Task
Complete the 2 questions given below. A total of 50 marks are allocated to the questions below, wh will then be converted to 15% in total.
All workings, when appropriate, must be shown to substantiate your answers.
Question 1 [35 marks]
The regulatory environment for financial reporting
You are a member of a large accounting firm which is responsible for preparing financial reports, including statements and notes to the accounts; and for advising staff in client firms who are responsible for preparing financial reports. The firm only deals with large Australian companies listed on the Australian Stock Exchange. One of your key tasks is to monitor the changes and developments in the financial reporting environment and summarise them in a regularly published newsletter.
Required:
Prepare a 2 page newsletter that identifies and summarises developments and changes in the financial reporting environment for the periodJune to August 2015, inclusive.
Detailed guidelines for completing this question:
1. Monitoring of changes and developments
This will involve regular monitoring of a number of sources over the required period. The sources should be varied in range, as you will need to identify and consider developments/changes relating to:
Technical issues such as issue of new accounting standards, exposure drafts or other pronouncements or interpretations.
Regulation and monitoring of financial reporting.
Political influences or other potential developments (such as identification of any reporting failures) that could impact or may be of interest to staff (such as Enron or Parmalat failure).
'Political' does not only mean action from politicians – it would also include lobbying/actions by other groups to promote their own interests – for example there may be articles about companies, or particular interest groups such as Group of 100, saying that if certain accounting standards are introduced this will disadvantage or have a negative impact.
You will need to consider both local (Australian) and international sources and developments. A
section on 'international' items/developments must be included in the newsletter.
2. Potential sources
Given the scope of the potential influences on financial reporting you will need to monitor a range of sources. Below is a list of sources that may be of interest, note that this list is not exhaustive, you should search for sources outside of these. You should not rely on any one type of source, but a range of sources from each category, i.e. do not just look at websites, also check journals, newspapers etc. Examples of possible information sources include:
(i) Websites such as those of:
Australian Accounting Standards Board
Financial Reporting Council
Australian Securities and Investment Commission
Australian Securities Exchange
International Federation of Accountants
Chartered Accountants in Australia and New Zealand
CPA Australia
International Accounting Standards Board Financial Accounting Standards Board Websites of large accounting firms.
(ii) Professional publications: In the Black (CPA)
Acuity (CAANZ)
(iii) Newspapers/journals
3. Contents
The restriction of a 2 page newsletter means that you need to use your own judgement as to wheth to include information about specific changes and developments and how much information to
include. It is not intended that you provide complete details of changes/developments (although you may consider in particular cases that more detail is needed). The purpose of the newsletter is to alert staff to changes and developments that may impact on their work and provide enough information about these changes/developments to satisfy the following:
For staff (the intended audience) to understand the nature of the development/change and its potential impact (so staff can decide whether they need to investigate further given the nature of their own work),
Provide sufficient information for staff to be able to obtain further information on the development/change if they wish to,
The newsletter should where possible be in your own words with sources adequately referenced using the appropriate referencing system.
Some examples of significant items to be considered include:
Revised or reissued accounting standards or interpretation (both national and international), ASIC reviews on financial reporting,
New ASX disclosures for listed companies.
Given the target audience, it would be assumed that they have a working knowledge of common terms and abbreviations (such as AASB, FASB) so abbreviations may be used. Don't be afraid to be creativ The effectiveness of a newsletter is impacted by how interesting the readers find it.
What not to consider?
You need to take care that the developments and the changes considered and included in the newsletter are relevant to the objective, in particular the issues/developments that directly relate to the preparation of financial reports for large companies listed on the Australian Stock Exchange. The newsletter SHOULD NOT consider areas only INDIRECTLY related to the preparation of financial reports such as (and this is not an exhaustive list):
Fraud, Auditing, Taxation,
Other disclosures by listed companies such as:
Industry disclosures required by peak organisations,
Voluntary disclosures in the area of corporate social responsibility, Voluntary Environmental disclosures.
4. Format
The newsletter should be in the following format:
The top of the newsletter must include the title (you need to decide on what to call your
newsletter) and details of the period the newsletter is considering.
The newsletter should not read as one continuous 'essay'. It must include headings and
sub-headings that assist in identifying the nature of changes/developments and help to guide the reader, and also enable the reader to distinguish between items of interest and the relative importance of changes.
You must refer the reader to specific sources so that they are able to obtain more detailed information of the development/change.
The newsletter must be printed in minimum font size of 11 points (You may wish to use larger fonts etc for headings etc). You may wish to set your newsletter out using
columns but this is optional. Apart from minimum font size, there are no specific requirements in relation to line spacing, margins etc. However, you should note that simply reducing line spacings, margins to 'fit more in' may impact on the presentation and
effectiveness of the newsletter.
There is no specific 'word limit'. The newsletter must be no longer than 2 pages. In cases where the newsletter exceeds the 2 page limit, only the first 2 pages will be marked.
Do not attach actual articles/printouts of web sources etc to your assessment. You are only required to
include details of these in the bibliography.
5. Bibliography and referencing
This assessment must include a bibliography rather than a reference list (this should not be part of yo newsletter and to be given on a separate page). A bibliography includes all materials used in the preparation of your assignment, not just those referenced within the paper. The reason a bibliography is required (rather than a reference list) is that this will provide an insight into the range and regularity of your monitoring activities (not just those specifically referenced within your 'paper') which is part
of the criteria for assessment. It is expected that the bibliography will be quite long. The bibliograp needs to include specifics of what you have actually accessed and read that is related to the area - not
just a general link to a website or newspaper etc. Therefore if you use a source such as the AASB website, please reference every article that you read separately. Assessments without a bibliography will not be accepted or marked.
When citing electronic sources, please include the date accessed. If you are unsure how to cite electronic sources check the referencing guides that are available from the library or online at the student services site. APA referencing style should be used for all citing format.
Please be reminded that plagiarism is regarded as a serious issue within the University system with severe consequences for students who have been found to have deliberately plagiarised, the minimum penalty being zero for the assignment. You should ensure that they are familiar with the plagiarism policy and referencing requirements before commencing assessment.
Question 2 [15 marks]
Preparation of a statement of financial position
The summarised trial balance of Smithy’s Ltd, a snack food manufacturing company, includes the following accounts at 30 June 2015:
DR ($) CR ($)
Cash on hand 5,000
Cash at bank 172,000
Trade debtors 744,000
Allowance for doubtful debts 18,000
Rent receivable 28,000
Prepaid insurance 114,000
Raw materials inventory 490,000
Work in progress inventory 151,000
Finished goods inventory 180,000
Investment in listed companies (available for sale) 252,000
Land, at valuation 1,250,000
Buildings, at cost 4,030,000
Accumulated depreciation – buildings 483,000
Plant and equipment, at cost 3,275,000
Accumulated depreciation – plant and equipment 726,000
Leased assets, at cost 775,000
Accumulated depreciation – leased assets 310,000
Goodwill 1,200,000
Accumulated impairment – goodwill 170,000
Trademarks 310,000
Deferred tax asset 18,000
Trade creditors 61,000
Sundry creditors 71,000
Bank loans 2,200,000
Debentures 825,000
Other loans 75,000
Lease liabilities 350,000
Current tax payable 52,000
Deferred tax liability 120,000
Provision for annual leave 175,000
Provision for long service leave 100,000
Provision for warranty 48,000
Share capital 5,100,000
General reserve 25,000
Asset revaluation reserve 250,000
Retained earnings 1,835,000
12,994,000 12,994,000
Additional information:
Bank loans and other loans are all repayable in 3 years time.
$325,000 of the debentures is repayable within 1 year. Lease liabilities include $125,000 repayable within 1 year. Investments in other companies are long-term investments. Provision for annual leave includes $107,000 payable within 1 year.
Provision for long service leave includes 12,000 payable within 1 year.
Provision for warranty includes $23,000 estimated to be incurred within 1 year.
Required:
Prepare the statement of financial position of Smithy’s Ltd at 30 June 2015 in accordance with AASB
101, using the minimum line items specified in AASB 101. Sub-classifications of the minimum line items should not be shown on the face of the statement. Show all workings. Notes are not required to be prepared.
Marking Guide - Question 2 Allocated marks
Minimum line items provided appropriately 10
Explanations/workings provided 3 appropriately
Presentation 2
Rationale
The purpose of this assignment is to help you further develop some of the skills and knowledge required and valued by the accountancy profession. The task that you will be required to undertake is similar to the tasks required of a professional accountant working within the financial reporting field. Accounting professionals need to ensure they are aware of current developments and that their knowledge is 'up to date'. They need to be able to identify changes that have occurred that may impact on their work and to know where they can obtain information about these changes. In this assignment you are asked to provide a summary of recent developments relating to financial reporting.
As such this assignment aims to:
Develop the student's ability to identify and source changes to financial reporting requirements so as to update professional knowledge required for practice;
Acquire an awareness of current developments and changes (both locally and internationally)
that may impact on current and future financial reporting rules and regulations;
Develop the student's ability to provide written material appropriate to the accountancy profession;
Help students appreciate the limitations of the currency of knowledge in a technical financial reporting area;
Allow students to understand the relationships between technical issues and community attitude to financial reporting.
This assignment will assess your ability to:
prepare basic financial statements for reporting entities; and
discuss critically and comprehensively the statutory and professional requirements upon which published financial statements are based.
Marking criteria
You will be assessed on the following:
QUESTION 1: Newsletter
The newsletter will be assessed in relation to the criteria specified in the following marking rubric:
Element Criteria HD D CR PS
Technical

Local

Correctly

Correctly

Correctly identify and

Correctly
content

reporting

identify and

identifies and

report some of the news identifies some
news [25%]

report a large

report most of

relating to changes in

relevant local
range of news

the news

local financial reporting news. Provides
relating to

relating to

environment.

some level of
changes in local changes in local

detail but
financial reporting environment.
International Correctly

financial reporting environment.
Correctly

Correctly identify and

newsletter has major omissions or incorrect reporting.
Correctly
reporting

identify and

identify and

report some of the news identifies some
news [25%]
Effectiveness Detail of discussion [15%]

report a large range of news relating to changes in international financial reporting environment.
Provides a high level of detail for all news.

report most of the news relating to changes in international financial reporting environment.
Provides detail for all news. Provides

relating to changes in international financial reporting environment.
Provides appropriate level of detail for most of the news.

relevant international news. Provides some level of detail but newsletter has major omissions or incorrect reporting.
Provides some level of detail for most of the
Element Criteria HD D CR PS
Creativity

Provides effective summaries and directions to staff to access further information where appropriate for all news. Discriminates between significant and minor news.
Titles/headings

detailed summaries and further information where appropriate for all news. Discriminates between significant and minor news events.
Titles/headings

Provides effective summaries and further information where appropriate for most of the news.
Accurately identifies significant and minor news.
Titles/headings

news. Provides effective summaries and further information where appropriate for some of the news.
Identifies significant and minor news.
Titles/headings
[15%]

provided attract

provided attract provided sometimes

provided
attention. Design of newsletter is highly creative, memorable,

attention. Design of newsletter is creative, well structured, and

attract attention.
Design of newsletter is original not based on a standard template.

sometimes attract attention. Design of newsletter is simplistic but
easy to read and is easy to read. exemplary.

effective.
Academic

The

Accurate use of

Accurate use of Accurate use of syntax,

Mostly accurate
writing skills newsletter

syntax, spelling

syntax, spelling vocabulary, spelling asnydntax, spelling
meets

and punctuation. and

punctuation.

and punctuation.
academic

Correctly refers

punctuation.

Correctly refers to more Correctly refers
standards of syntax, vocabulary,

to an extensive variety of sources to

Succinct and effective use of vocabulary.

than the minimum requirement of sources to support arguments,

to minimum number of sources to
spelling andsupport

Correctly refers including prescribed

support
punctuation

arguments,

to a broad range texts and recommendedarguments,
and reflects

including

of sources to

readings.

including
an awareness prescribed texts

support

Reference list formatted prescribed texts.
of audience and a broad needs [20%] range of
additional readings. Reference list

arguments, including prescribed text and a variety of further

in APA style, with minor errors.

Reference list used, formatted in APA style, with some errors.
of an extensive readings.
range of resources used, correctly formatted using APA style.

Reference lists
a broad range of relevant resources used, correctly formatted using APA style.
QUESTION 2: Preparation of Financial Statements
Criteria HD D CR PS
Question 2: Prepare financial

financial statements are

Financial statements are

financial statements are

Financial statements are
statements in

prepared without

prepared with

prepared with some prepared with some
accordance with the accounting standards.

flaw. Explanations shown are exemplary and clear. Appropriate

minor flaws. Explanations shown are clear and succinct. Appropriate workings are

errors. Explanations shown are adequate. Appropriate workings are

errors. Explanations shown are basic.
Some workings are shown.
Work shown is
workings are shown and accurate.
Work shown is logical and well presented.

shown and accurate.
Work shown is logical and well presented.

shown.
Work shown is logical and well presented.

presented fairly.
Presentation
It is essential that presentation of assignments adheres to acceptable standards in relation to neatness and layout, as you are practicing to present material in a work situation. Correct formatting and referencing procedures of materials should be strictly adhered to for all assignment tasks.
Requirements
You must submit your assignment via Turnitin using a 'Word' file only.