ACC00145 s2 2017 Report
Due date: 5pm Friday 29 September 2017
Weight: 20 marks

Special Instructions:
• Each student should choose a company that is listed on the Australian Stock Exchange (ASX). Find an annual report for the 20154/2016 or 2016/2017 financial year. Remember to use a complete annual report, not a concise financial report or a half-year financial report.
• You must reserve your company by adding a post on ‘Discussion Board’ under ‘Reserve a company here’. Write the name and code of the chosen company in the description line of your post. If you add the company name in the message and NOT in the description line, then the reservation is void because it will not be readily visible to others.
• To ensure your choice of a company does not duplicate one already chosen by other student, they will be allocated on a first come, first served basis.
• Word limit of this report should not be less than 10% of word limit (900 words) and exceeds 1100 words (excluding executive summary, references and appendix). A loss of 10% of the total marks will apply if you didn’t follow this instruction.
• You must use the electronic Assignment Cover Sheet provided, fill in details and then make this sheet the first page of your assignment. Do not send it as a separate document.
• The file name of the report should include (in order) your surname, your student number and the name of the company that you chose for your assignment. For example: ‘Parker1235456xyz'.
• Your assignments must be submitted as Word document. If you wish to submit in any other file format please discuss this with your lecturer before the submission date. Please note: you are not allowed to submit the report in PDF file.
• Unless otherwise indicated, all assignments are to be submitted online via the link for Turnitin assignment submission provided on the Blackboard site.
• If there are any references used in the report, the references should follow Harvard Referencing Style. The reference list should provide all materials supporting the report including a web link of the annual report of the chosen company.
Instructions for the report
This task requires you to prepare a report to evaluate and comment on information regarding leases provided in the annual report of a company listed on the Australian Stock Exchange (ASX). Your comments or evaluation should comply with the requirements of relevant Australian accounting standards (AASBs).
PWC states that ‘The new requirements (of IFRS 16) eliminate nearly all off balance sheet accounting for lessees and redefine many commonly used financial metrics such as the gearing ratio and EBITDA. This will increase comparability, but may also affect covenants, credit ratings, borrowing costs and your stakeholders’ perception of you.’ (accessed from https://www.pwc.com.au/assurance/ifrs/assets/ifrs16lease-brochure.pdf)
AASB 16 Leases was released in February 2016 in Australia. In this report, you should address the points outlined below:
Part A
1) Discuss the recognition criteria for a lease according to relevant AASBs.
2) Identify the differences between finance lease and operating lease.
3) Identify at least one example of a finance lease and an operating lease reported in the annual report of the chosen company.
Part B
From the perspective of the lessees, discuss the potential implication of the adoption of new AASB 16 Leases on assets, liabilities and debts, leverage, accounting-based debt covenants, expenses and profit of the chosen company. You should include the examples that you identified in part A3) in your discussion.
Further information regarding the report:
• The report should include an executive summary, a body of contents covering points listed above, and a reference list.
• You should refer to the requirements of AASB 16 Leases, AASB 110 Presentation of Financial Statements and AASB Conceptual Framework as the guidelines of your report.
• Other references used in the report such as annual report should be included in the reference list. Remember to provide a link of the annual report in the reference list.
• Sections extracted from the annual report or AASB to support your report should be included in the Appendix. Also, provide specific page numbers of the annual report and paragraph numbers of AASBs as in-text reference in your report such as annual report note 10 and AASB 101.26. If you choose to ignore this instruction, you will lose marks.
Assessment criteria:
The quality of the report will be assessed based on the following four areas:
1) Demonstrate and identify the accounting concepts applied.
2) Use paragraphs from related Australian Accounting Standard as guidelines to support your discussion.
3) Provide example(s) from the annual report to illustrate the implementation of an accounting concept(s) or principle(s) discussed.
4) Demonstrate effective communication, referencing, logical presentation and integrated evaluation.