ASSESSMENT 2
Course Name FNS60215
Advanced Diploma of Accounting
Subject/module Complex Financial Reports
Assessment method Scenario / Case Study
Weighting 50%
Units of Competency FNSACC614
Prepare Complex Corporate Financial Reports
Instructions
1. Assessments should be completed as per your trainer’s instructions.
2. Assessments must be submitted by the due date to avoid a late submission penalty.
3. Plagiarism is copying someone else’s work and submitting it as your own. You must write your answers in your own words and include a reference list. A mark of zero will be given for any assessment or part of an assessment that has been plagiarised.
4. You may discuss your assessments with other students, but submitting identical answers to other students will result in a failing grade. Your answers must be yours alone.
5. Your trainer will advise whether the assessment should be digitally uploaded or submitted in hard copy. Assessments that are digitally uploaded should be saved in pdf format.
6. You must attempt all questions.
7. You must pass all assessments in order to pass the subject.
8. All assessments are to be completed in accordance with WHS regulatory requirements.
Assessment 2 – Scenario / Case Study
Consolidated Financial Positions
Research the 3 scenarios below and answer the questions relating to each.
Scenario 1:
Elders: Visit the “Investor’s Centre” of Elders Limited’s website: http://bit. ly/2qAicSb. G. Locate the most recent financial report.
Answer questions 1-3 about the company. Concentrate on the current year and the consolidated or group figures. You may have to look at the ‘parent’ company figures for some details, especially in Question 2
1. Companies refer to other companies in which they own ‘equity – method investments’ as associated companies or associates. This signifies the close relationship between the two entities even though the investor does not have a controlling interest.
a. Does the company have any equity-method investments? (2 marks)
b. How can you tell this? (3 marks)
c. If present, what are the balances in the investment account at the beginning and the end of the current year? (If the company had no equity
method investments skip this question.) (3 marks)
2. Look at the income statements and the notes to the financial statements if equity-method investments are present.
a. What amount of profit did the company record from those investments
during the current year? (5 marks)
b. What amount of dividends did the company receive during the current year from companies in which it held equity-method investments? Note; the amount of dividends received may not be separately disclosed. However you may still be able to calculate the amount of dividends
received from the following T Account (5 marks)
Equity – method investments
Beginning balance
(from balance sheet)
Equity-method profits
(from income statement) XX
XX Dividends received
(Unknown to be calculated ??
Ending balance
(from balance sheet) XX
3. The company probably owns some subsidiaries.
a. Does the parent company own less than 100% of any subsidiaries?
(3 marks)
b. Examine the financial statements and the notes to determine whether there are any such minority interests. If so, how did they affect the
reported profit for the year? (3 marks)
c. Did the company acquire, or dispose of, any subsidiaries during the year? (3 marks) If so, what amount was paid for goodwill in respect of
subsidiaries acquired? (3 marks)
d. What profit (loss) was made on the disposal of any subsidiaries? (3 marks)
Total Marks – 30 Scenario 2
Consolidated Accounting for Investments Qantas:
Look at the latest Qantas http://bit.ly/2qAkMHX financial report and then answer the following questions. Concentrate on the ‘Qantas Group’ (‘Consolidated’) figures, although you may have to use the Qantas figures for some details.
1. What is the significance of having separate columns in the financial report
for ‘Qantas’ and the ‘Qantas Group’? (4 marks)
2. Does the Qantas Group have any
a. short-term investments (2 marks)
b. long-term investments in shares in other unrelated companies at end of
June? (2 marks)
c. What is the method of valuation and the carrying amount for any such
investments? (3 marks)
3. Does the Qantas Group have any investments in associated (equity-method) companies? (3 marks)
4. What was the carrying amount of any such investments? (3 marks)
5. What share of the profits of associated companies did the Qantas Group include in its total profit for the latest financial year? (3 marks)
6. What amount of dividends did Qantas receive during that year from
associated companies? (3 marks)
7. Qantas owns some consolidated subsidiaries.
a. Does Qantas own 100% of each subsidiary or are there any minority
interests? (3 marks)
b. If there are any minority interests, how did they affect the reported profit for the year? (3 marks)
c. What is the amount of any minority interest included in total equity at 30
June? (3 marks)
8. From your review of these reports explain how you think the company made sure the information was clear and conformed to statutory and other
regulatory requirements. (3 marks)
Total Marks – 35 Scenario 3:
Consolidated Method
Caesar Saled inherited some investments and he has received the annual reports for the companies. The financial statements of the companies are puzzling to Saled and he asks you to write a memo of each of the following questions:
1. The companies label their financial statements as consolidated balance sheets, consolidated income statement and so on. What are consolidated
financial statements? (3 marks)
2. The consolidated balance sheet lists the asset ‘goodwill’.
a. What is goodwill? (2 marks)
b. Does the presence of goodwill mean that the company’s shares have
increased in value? (3 marks)
Total Marks – 8
Assessment 2 total: 73 marks Notes: