HOLMES INSTITUTE
FACULTY OF
HIGHER EDUCATION
Assessment Details and Submission Guidelines
Trimester T1 2019
Unit Code HA2032
Unit Title Corporate and Financial Accounting
Assessment Type Individual Assignment
Assessment Title Corporate Takeover Decision Making and the Effects on Consolidation Accounting
Purpose of the assessment (with ULO
Mapping) Students are required to perform independent research of the key topics by reviewing the applicable accounting standards and other guidance documents available on the websites of the professional accounting bodies.
Learning Outcomes:
1. Explain the legislative requirements in company formation and how to account for equity, capital and distributions;
2. Explain the methods of raising company funds, that is, using share capital or debt, and how to account for each;
3. Demonstrate the ability to prepare consolidated financial statements and how the data is collected, adjusted and interpreted.
Weight 20% of the total assessments
Total Marks 20
Word limit 2,500 words
Due Date Week 10
Submission Guidelines • All work must be submitted on Blackboard by the due date along with a completed Assignment Cover Page.
• The assignment must be in MS Word format, single spacing, 12-pt Arial font and 2cm margins on all four sides of your page with appropriate section headings and page numbers.
• Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Harvard referencing style.
HA2032 CORPORATE AND FINANCIAL ACCOUNTING
HA2032 Assignment Specifications
Purpose:
This assignment aims to reinforce and extend students’ knowledge and understanding of key topics in this course (HA2032) including: business combinations, the corporate group, acquisition methods, intra-group transactions and non-controlling interests through independent research and detailed use of the relevant accounting standards.
Assignment Questions
Part A (5 marks)
You are a non-executive director attending a regular board meeting for JKY Ltd. At the top of the agenda is the proposed takeover of a smaller company called FAB Ltd, which is an ASX listed entity operating in the same industry. JKY Ltd is considering which acquisition strategy should be used. One director is arguing that the direct “purchase / acquisition method” is the best option, whilst another director is proposing a longer term strategy, which involves acquiring the shares of FAB Ltd by first acquiring “significant influence” over FAB Ltd. Given your experience as a qualified CPA, the Chairman has asked you for your opinion in writing based on your extensive knowledge of accounting for business combinations.
With reference to AASB 3: Business Combinations, AASB 128 Investments in Associates and Joint Ventures and AASB 10 Consolidated Financial Statements, prepare a detailed response to the
Chairman and the board, which outlines the key differences in methodology between Consolidation Accounting and Equity Accounting. Provide worked examples within your response which fully explain the two options.
Part B (5 marks)
At the same board meeting the CFO reported that a partially owned subsidiary provided professional services and sold inventory to the parent company JKY Ltd at a profit. The CFO is seeking clarification from the board in relation to whether profit should be deducted from the subsidiary’s reported profit for the sale of inventory and for providing the professional services to the parent entity. Secondly, how will this affect the non-controlling Interest (NCI) calculation in the subsidiary’s annual profit?
With reference to AASB 127 Consolidated and Separate Financial Statements and AASB 10 Consolidated Financial Statements and the issues raised in Part B, discuss the key principles and provide examples which explain how intra-group transactions should be treated.
Part C (7.5 marks)
You are now finalising the consolidated financial statements in the annual report for JKY Ltd as at 30 June 20X8. AASB 127 requires that the NCI is reported as a separate item of owner’s equity. As part of the preparation, you must also consider the allocation of other comprehensive profit to the NCI. The Financial Accountant responsible for the subsidiary has already informed you that the assets of the subsidiary were recorded at historic cost at the control date.
What changes may be required to ensure that the consolidated financial statements are correctly stated? How would any required changes affect the disclosure requirements in the annual report? With reference to AASB 127 Consolidated and Separate Financial Statements and AASB 101 Presentation of Financial Statements, discuss the effects of the NCI disclosure requirement as a separate item in the consolidation process.
The Assignment Structure should include the following details:
1. Holmes Institute Assignment Cover Sheet – Student Name, Student No., Session No. is required.
2. Executive Summary – 100 words (max.) – A brief and concise paragraph which states the main points and summarises the main conclusions. No in-text citation or direct quoting is required.
3. Table of Contents Page – 50- 100 words – Note - this will be excluded from the total word count.
4. Introduction - 100 words (max.) – A concise paragraph which introduces the main themes of each section in Parts A – C, coherently and logically.
5. Part A Response - 500 – 600 words – This section should address both Consolidation and Equity Accounting equally with examples to explain the key concepts and differences.
6. Part B Response - 500 – 600 words – This section should focus on Intra-group transactions and discuss how profit is allocated.
7. Part C Response - 850 – 900 words – This section should focus on the disclosure requirements of the NCI and explore the issues which arise from the consolidation process.
8. Conclusion – 100 words (max.) – This should be a brief and concise paragraph which reiterates the main points from each section in a coherent and logical manner.
9. Reference List – As required – Note - this will be excluded from the total word count. This should include the relevant Accounting Standards as well as relevant selected articles from Academic journals. Students should use “Proquest” or “Google Scholar” as a starting point with their research. Students can also refer to the CPA website www.cpaaustralia.com.au for more relevant information and additional content.
Marking Criteria Weighting
Documented responses with explanations provided to each question.
Use of appropriate and effective examples to accompany explanations. 87.5% (17.5 marks)
Evidence of research and use of Accounting Standards throughout the report. Written English Language competency. Coherent and logical explanations.
Spelling, grammar, syntax, word choice, proof reading and editing. 12.5% (2.5 marks)
TOTAL Weight 100% 20 marks
Assessment Feedback to the Student:
(Note - Students will be provided with detailed feedback on Blackboard. Students may also make an appointment with their respective lecturer for more feedback if required. Students should always review the feedback comments provided and view the assessment as a learning opportunity.)
HA2032 Assignment Marking Rubric
Section Excellent Very Good Good Satisfactory Unsatisfactory
Part A 5 marks Exemplary demonstration of knowledge of the topic. Substantial relevant research using correct referencing conventions. Correct application and appropriate use of Accounting Standards relevant to HA2032. Examples used are appropriate. Effective explanation and differentiation of
Consolidation and Equity Accounting within the limit. (4.5 – 5 marks) Effective demonstration of content knowledge with sufficient research and examples.
Application and use of Accounting Standards is noted. Referencing is noted and correctly performed. Competent explanations provided. No. of words is acceptable. (3 – 4.5 marks) Sound demonstration of content knowledge. Research is evident and relevant to the question. Correct referencing is noted. Accounting Standards are stated. More depth of analysis required. (2.5 - 3 marks) Reasonable demonstrati on of content knowledge. Some
research has been done. Accounting Standards are mentioned and referenced. (2 – 2.5 marks) Little or no demonstration of content knowledge. No evidence of research. No application and no use of any Accounting
Standards. Little or no referencing. No grasp of the fundamentals. The no. of words is unsatisfactory. (0 - 2 marks)
Part B 5 marks Exemplary demonstration of knowledge of the topic. Substantial relevant research using correct referencing conventions. Correct application and appropriate use of Accounting Standards relevant to HA2032. Examples used are appropriate. Intra-group transactions is well understood with appropriate examples. This section is within the word limit guidelines. (4.5 – 5 marks) Effective demonstration of content knowledge with sufficient research and examples.
Application and use of Accounting Standards is noted. Referencing is noted and correctly performed. Intragroup transactions has been explained. No. of words is acceptable. (3 – 4.5 marks) Sound demonstration of content knowledge. Research is evident and relevant to the question. Correct referencing is noted. Accounting Standards are stated. More depth of analysis required. (2.5 - 3 marks) Reasonable demonstrati on of content knowledge. Some
research has been done. Accounting Standards are mentioned and referenced. (2 – 2.5 marks) Little or no demonstration of content knowledge. No evidence of research. No application and no use of any Accounting
Standards. Little or no referencing. No grasp of the fundamentals. Over / under the word limit. (0 - 2 marks)
Part C 7.5 marks Exemplary demonstration of knowledge of the topic. Substantial relevant research using correct referencing conventions. Correct application and appropriate use of Accounting Standards relevant to HA2032. Examples used are appropriate. NCI disclosure requirements are explained. This section is Effective demonstration of content knowledge with sufficient research and examples.
Application and use of Accounting Standards is noted. Referencing is noted and correctly performed. NCI disclosure Sound demonstration of content knowledge. Research is evident and relevant to the question. Correct referencing is noted. Accounting
Standards are Reasonable demonstrati on of content knowledge. Some
research has been done. Accounting Standards are mentioned and Little or no demonstration of content knowledge. No evidence of research. No application and no use of any Accounting Standards. Little or no referencing. No grasp of the fundamentals.
within the word limit guidelines. (6.5 -7.5 marks) explanation is good. No. of words is acceptable. (5.5 – 6.5 marks) stated. More depth of analysis required. (4.5 -5.5 marks) referenced. Examples are provided. (3.5 -4.5
marks)
Over / under the word limit. (0 – 3.5 marks)
Overall
Report standard:
Research,
Accounting
Standards,
English
Grammar
2.5 marks
Well written. Only very minor errors in grammar, spelling, punctuation and syntax.
Exemplary demonstration of knowledge of the topic. Substantial relevant research using correct referencing conventions. Correct application and appropriate use of Accounting Standards relevant to HA2032. Examples used are appropriate. (2.5 marks) Effectively composed with minor errors. Effective demonstration of content knowledge with sufficient research and examples.
Application and use of Accounting Standards is noted. Referencing is noted and correctly performed. No. of words is acceptable. (2 marks) Competently written, but with some errors.
Sound demonstration of content knowledge. Research is evident and relevant to the question. Correct referencing is noted. Accounting Standards are stated. (1.5 marks) Some errors, but the written composition
is
satisfactory and understanda ble.
Reasonable demonstrati on of content knowledge. Some
research has been done. Accounting Standards are mentioned and referenced.
(1 mark)
Poorly written or insufficient. Little or no
demonstration of content knowledge. No evidence of research. No application and no use of Accounting Standards. No referencing or incorrect referencing. No grasp of the fundamentals. Significantly either over / under the word limit.
(0 marks)