Working ACC5215 Corporate Accounting

Case study assignment

Important Information

The course specification requires that your submission is your own individual work. You are strongly urged to complete this assessment yourself to receive clear feedback about your level of understanding of the course material. You will find information regarding plagiarism and academic misconduct, such as collusion and cheating in the course specification and on the USQ website.

References: you are required to include a reference page in your assignment.

o Please ensure that any ideas or data that you provide in your answer, other than your own original thoughts are properly referenced using the Harvard referencing style. A link to the university’s Harvard referencing style page is provided here.

http://www.usq.edu.au/library/referencing/harvard.htm

You might also find the following book useful:

Summers, J. & Smith, B. (2010), Communication Skills Handbook, John Wiley & Sons, Third Edition, Milton Queensland

If you are having difficulty for referencing, you can contact to the Library via the contact details at the link: https://www.usq.edu.au/library/contact

Case Study Preparation and Submission

Please read the following points carefully.

o This assessment must be lodged using USQ’s Moodle for Case Study submission link. Submission link is available from the course homepage (via the Study Desk).

o You are required to lodge one (1) Microsoft Word file (limit 2MB), using the correct file naming protocol – see next page.

o Your submission must have a header on every page, which includes your student name and the last 4 digit from your student number. If my student number is 601001234. e.g. Teruyo Omura 1234acc5215.

o The assessment is due at 11.50 pm on Monday, 27th August 2018 (USQ time). Submissions open on 6th August 2018.

Do I need to include the electronic version of the USQ case study holder/cover sheet?

o You do not need to include a USQ covers heetinyourassessment. Do I have to send in a hard copy?

o Nohardcopyisrequired.
Technical problems with online submission

o Pleaseemailorcall1900ifnecessary,talktoasystemexperttoseekforassistance. If you leave it until after 4pm on the due date, you might have to bear any undesirable consequences (late penalties will not be applied in genuine cases of technical problems but failure to read instructions will be no excuse). In the rare circumstance that the server is down (e.g. due to a storm), email the assessment file.

Keep your submission details

o You need to keep your submission details like date and time of your submission as well as a back-up copy of your assignment file.

Extensions

No extensions will be granted after the due date and time for the assessment has passed. All requests for extension must be addressed to the Course examiner [email protected] at least one day before the due date with supporting documentation (e.g. doctor’s certificate) and a copy of your Word file (even if incomplete) to show that you have attempted the assessment to a reasonable level. Extensions will only be granted in extenuating circumstances. Crashing of computers, too busy with other assignments, heavy workload, and such reasons are not considered extenuating circumstances. Requests for extensions due to work commitments generally will NOT be granted. You must organise your study time around these other commitments.

Marking Guide

Marks will be awarded based on the guidelines. High quality answers should address the requirements of the questions asked comprehensively with good grammar, spelling and punctuation. For case study questions, relevant theories should be explained and applied, citing the contents of the case studies as much as possible.

Please use the assigned word limit to gauge the level of work expected in each section.

ACC5215 Case Study S2 2018 Marking Guides

Value /20%

Excellent >17%

Very Good >15%

Good >13%

Satisfactory >10%

Unsatisfactory <9.4%

1.Evidence of Research 3%

Wide use of research materials

Research sought from several sources

Research evidenced

Minimal evidence

No evidence

2.Critical thinking 4%

High level of critical thinking evident

Good examples of critical thinking

Applied knowledge

Understood basic concepts

No evidence of critical thought

3.Argument 4%

Coherent and completely organized

Coherent and reasonable well organized

Fairly coherent

Some confusion and vagueness

Missed the point completely

4.Sources & Citation
4%

Sources are cited and are used critically

Sources are cited and some are used critically

Some sources are missing

Sources are not cited

Did not include

5.Writing 5%

Writing and graphics are nearly error free

A few writing and spelling errors but none that are critical

More than a few writing and spelling errors

Many careless writing and spelling errors that impede comprehension

Same as below standard

Marking sheet:

Minimum mark per grade

Case study Module 1

Mark

HD

A

B

C

F

T otal

M1 First selection (10 marks)

10.00

>8.5

>7.5

>6.0

>5.0

<4.5

Case study Module 2

M2 First (10 marks)

10.00

>8.5

>7.5

>6.0

>5.0

<4.5

Case study Module 3

M3 First (10 marks)

10.00

>8.5

>7.5

>6.0

>5.0

<4.5

Case study Module 4

M4 First (10 marks)

10.00

>8.5

>7.5

>6.0

>5.0

<4.5

/40

/20%

Comments:

Module 1: Select 1 Case Study and provide your answer

Case study A

Assuming that you are the director of a small proprietary company, find the ‘small business guide’ on the Corporations Act 2001 (https://www.legislation.gov.au/Details/C2008C00031) and learn of your rights and obligations under the Act for managing your business. Prepare a brief report for 3 topics from the following lists.

App. 600 words

  1. The meaning of registration, including shareholders’ and directors’ liabilities
  2. Rules for internal management of a company
  3. Company structure and setting up a new company
  4. Continuing obligations once the company is set up
  5. Company directors and secretaries
  6. Annual financial reports and audit
  7. Disagreements within the company
  8. Companies in financial trouble

Case study B

Select 3 organisations from the following lists and prepare a brief report of their roles in the regulation of financial reporting in Australia.

  1. the Financial Reporting Council (FRC)

    http://www.frc.gov.au/about_the_frc/

  2. the Australian Accounting Standards Board (AASB)

    http://www.aasb.gov.au/

  3. the International Accounting Standards Board (IASB)

App. 600 words

https://www.ifrs.org/groups/international-accounting-standards-board/

  1. the Australian Securities and Investments Commission (ASIC)

    https://asic.gov.au/

  2. the Australian Securities Exchange (ASX)

    https://www.asx.com.au/

Module 2: Select 1 Case Study and provide your answer

Case Study C Company accounting text p.601

Three areas where adjustment may need to be made subsequent to acquisition date are: 1. Goodwill; 2. Contingent liabilities; and 3. Contingent consideration. Prepare a report of ‘subsequent adjustments to the initial accounting for a business combination’ for each of the three areas.

App. 400 words

Case Study D Research on AASB 3

AASB 3 does not apply to all business combinations. Prepare a report of those business combinations excluded from the scope of AASB 3.

http://www.aasb.gov.au/admin/file/content105/c9/AASB3_08-15.pdf

App. 400 words

Module 3: Select 1 Case Study and provide your answer

Case Study E

Required
In the following independent situations, determine whether a parent–subsidiary relationship exists, and which entity, if any, is a parent required to prepare consolidated financial statements under AASB 10.

Road Ltd is a company that was hurt by a recent global financial crisis. As a result, it experienced major trading difficulties. It previously obtained a significant loan from
Wile E. Bank, and when Road Ltd was unable to make its loan repayments, the bank
made an agreement with Road Ltd to become involved in the management of that company. Under the agreement between the two entities, the bank had authority for spending within Road Ltd. Road Ltd’s managers had to obtain authority from the bank for acquisitions over $10 000, and was required to have bank approval for its budgets.

App. 400 words

Case Study F

The following comment was made by the Swedish Financial Reporting Board to the IASB in response to the issue of ED 10 Consolidated Financial Statements, and received by the IASB on 6 April 2009:

We agree that consolidated financial statements would be improved, if they include entities under ‘de facto’ control. However, the problem is to establish which entities are really under ‘de facto’ control. There are situations where it is very clear that the dominant shareholder de facto controls another entity, but there are also lots of situations, where it is not clear that the dominant shareholder de facto controls the other entity. We suggest that the requirement for consolidation based on ‘de facto’ control is restricted to situations, where it is beyond reasonable doubt that control really exists.

Required
Prepare a brief report do discuss whether AASB 10 meets the problem raised by the

Swedish Financial Reporting Board.

App. 400 words

Module 4: Select 1 Case Study and provide your answer

Case Study G CH19 Case study 5 Bargain purchase

The accountant for A Ltd, Ms Springfield is seeking your advice on an accounting issue that has been confusing her. When preparing the acquisition analysis relating to A Ltd’s acquisition of B Ltd, she calculated that there was a gain on bargain purchase of $20,000. Being unsure of how to account for this, she was informed by accounting associates that this should be recognised as income. However, she reasoned that this would have an effect on the consolidated profit in the first year after acquisition date. For example, if Lyra Ltd reported a profit of $100,000, then consolidated profit would be $120,000. She is unsure of whether this profit is all post-acquisition profit or a mixture of pre-acquisition profit and post-acquisition profit.

App. 400 words

Required
Compile a detailed report on the nature of an excess, how it should be accounted for, and the effects of its recognition on subsequent consolidated financial statements.

Case Study H

Moon Ltd has acquired all the shares of Sun Ltd. The accountant, Bob for Moon Ltd having studied the requirements of AASB 3 Business Combinations, realises that all the identifiable assets and liabilities of Sun Ltd must be recognised in the consolidated financial statements at fair value. Although he is happy about the valuation of these items, he is unsure of a number of other matters associated with accounting for these assets and liabilities. He has approached you and asked for your advice.

Required
Prepare a report for the accountant at Moon Ltd advising on the following issues:

  1. Should the adjustments to fair value be made in the consolidation worksheet or in the accounts of Sun Ltd?
  2. What equity accounts should be used when revaluing the assets, and should different equity accounts such as income (similar to recognition of an excess) be used in relation to recognition of liabilities?
  3. Do these equity accounts remain in existence indefinitely, since they do not seem to be related to the equity accounts recognised by Sun Ltd itself?

    App. 400 words