7702 AFE Accounting for Accountability

7702 AFE Accounting for Accountability

ASSIGNMENT 1- TP 4, 2021

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Description

  • This assignment requires you to answer requires you to answer problem-based questions relating to application of Accounting Standards, Corporate Governance and a Reflection question.

The Assignment Questions

  • Answer the questions contained in the word document
  • Marks allocated to each part of the are shown on the assignment document
  • The document includes the Rubric
  • Please include 5 additional references

Task Description:

The purpose of this assignment is twofold. First, it enables you to demonstrate comprehensive knowledge of Accounting Standards. Second, it gives you an opportunity to synthesize your knowledge through a self-reflection on understanding financial statements.

Students are required to complete this task individually. The assignment is worth of 30% of the final grade.

General Instructions to answer the assignment

● There are two parts to complete in this assignment:

v Part A: Application of Accounting Standards and Corporate Governance Principles: See the details in this document. Word limit 1700

v Part B: Reflective note. Word limit 300

● Marks: The assignment will be marked out of 30 as follows:

– Part A – marked out of 27

– Part B – marked out of 3

● All answers must use proper English expression and grammar. Please ensure that you Complete the requirements as set out in this document.

● Late submission: An assessment item submitted after the due date, without an approved extension, will be penalised. To understand how the mark is reduced please refer to Assessment Submission and Return Procedures.

Part A: Application of Accounting Standards and Corporate Governance Principles

A1: Inventory 8 marks

Australian Accounting Standard AASB102, Inventories, requires inventory to be measured at the lower of cost or net realisable value (paragraph 9).

Referring to Bellamy’s Organic Annual Report 2019 from the assessment tab:

1. Outline what method has been used by the company to measure the value of its inventory?

2. What are the different types of inventories reported by Bellamy’s in its 2019 annual report?

3. Under Note 9, (page 67), the company reports an inventory provision of $6.563 million (in 2018 $10.004 million). Explain what does this inventory provision mean? Why did the inventory provision decrease during 2019 compared to 2018?

4. How does the inventory provision affect the value of inventory in the balance sheet?

5. Why might a manager who receives a bonus based on the reported profit tend to record a lower level of provision for inventory?

6. Do you think the valuation of inventory requires subjective judgements? Why or why not?

7. Refer to page 102 of the Bellamy’s Annual Report 2019. What reasons have the auditors mentioned for identifying the valuation of inventory as a key audit matter?

A2: Intangible assets and Goodwill 7 marks

Australian Accounting Standard AASB138, Intangible Assets, defines an intangible asset as an identifiable non-monetary asset without physical substance (paragraph 8). The Accounting Standard includes Goodwill as an intangible asset.

Refer to the Mayne Pharma Annual Report 2020 from the assessment tab:

In the Balance Sheet, (p.41) as at 30 June 2020, you can see that Intangible assets and goodwill has increased substantially from the prior year. Note 13 of the financial statements will assist you in answering the following questions:

1. Describe the ‘intangible assets’ for Mayne Pharma for the 2020 financial year.

2. Explain the potential possible reasons for the increase in the goodwill and intangible assets balance.

3. The company has recorded amortisation expenditure on intangible assets. What is the difference between amortisation expense and impairment expense?

4. How many cash generating units (CGU) the company has identified for impairment testing of goodwill and intangible assets?

5. Which CGU has the highest buffer against possible impairment charge based on the test that the company has conducted?

6. Which CGU is the most sensitive to the adverse changes in the key estimates and assumptions (changes in net sales growth, terminal growth rate, and weighted average cost of capital)?

7. How could managers manipulate the outcome of the impairment test?

A3: Corporate Governance Principles 12 marks

The questions below require an application of specific sections of the Corporate Governance Principles to the corporate governance statements made by ASX listed organisation Bega Cheese Ltd in its annual report 2019.

Referring to the ASX Corporate Governance principles (4th ed), specifically Principle 2, review the 2019 Bega Cheese Ltd Corporate Governance statements and the Annual Report of 2019 and critically evaluate compliance with the following recommendations:

(a) 2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills that the board currently has or is looking to achieve in its membership

(b) 2.4 A majority of the board of a listed entity should be independent directors.

(c) 2.5 The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.

(d) 4.1 (a) have an audit committee which: (1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and (2) is chaired by an independent director, who is not the chair of the board.

Part B: Reflective note 3 marks

Reflective writing is a way of thinking to explore your personal development with learning content (e.g. case study, lecture topics). A reflective note encourages you to gain self-knowledge and achieve clarity and better understanding of your thought. Describe your personal reflection of your learning outcomes from Module 1 and 2.

Appendix:

Access relevant annual reports from the assignment tab

Mayne Pharma Annual Report 2020

Bega Cheese Limited Annual Report 2019

Bellamy’s Organic Annual Report 2019

Bega Cheese Limited Corporate Governance Statement

Accounting and Reporting: Rubric for Assignment 1

Criteria Excellent Very Good Good Satisfactory Unsatisfactory Mark
PART A: Demonstrate an understanding of judgement and accounting standards used to prepare financial information The student has shown a very high level of ability in demonstrating an understanding of judgement and accounting standards used to prepare financial information The student has shown a high level of ability in demonstrating an understanding of judgement and accounting standards used to prepare financial information The student has shown a good ability in demonstrating an understanding of judgement and accounting standards used to prepare financial information The student has shown some ability in demonstrated an understanding of judgement and accounting standards used to prepare financial information The student has shown limited ability in demonstrating an understanding of judgement and accounting standards used to prepare financial information /27
PART B: Reflective note The student has shown a very high level of ability in conveying their concept of accounting The student has shown a high level of ability in conveying their concept of accounting. The student has shown a good ability in conveying their concept of accounting The student has shown some ability in conveying their concept of accounting. The student has shown limited ability in conveying their concept of accounting. /3
TOTAL and comments /30

ASSIGNMENT 1- TP 4, 2021

Description

  • This assignment requires you to answer requires you to answer problem-based questions relating to application of Accounting Standards, Corporate Governance and a Reflection question.

The Assignment Questions

  • Answer the questions contained in the word document
  • Marks allocated to each part of the are shown on the assignment document
  • The document includes the Rubric
  • Please include 5 additional references

Task Description:

The purpose of this assignment is twofold. First, it enables you to demonstrate comprehensive knowledge of Accounting Standards. Second, it gives you an opportunity to synthesize your knowledge through a self-reflection on understanding financial statements.

Students are required to complete this task individually. The assignment is worth of 30% of the final grade.

General Instructions to answer the assignment

● There are two parts to complete in this assignment:

v Part A: Application of Accounting Standards and Corporate Governance Principles: See the details in this document. Word limit 1700

v Part B: Reflective note. Word limit 300

● Marks: The assignment will be marked out of 30 as follows:

– Part A – marked out of 27

– Part B – marked out of 3

● All answers must use proper English expression and grammar. Please ensure that you Complete the requirements as set out in this document.

● Late submission: An assessment item submitted after the due date, without an approved extension, will be penalised. To understand how the mark is reduced please refer to Assessment Submission and Return Procedures.

Part A: Application of Accounting Standards and Corporate Governance Principles

A1: Inventory 8 marks

Australian Accounting Standard AASB102, Inventories, requires inventory to be measured at the lower of cost or net realisable value (paragraph 9).

Referring to Bellamy’s Organic Annual Report 2019 from the assessment tab:

1. Outline what method has been used by the company to measure the value of its inventory?

2. What are the different types of inventories reported by Bellamy’s in its 2019 annual report?

3. Under Note 9, (page 67), the company reports an inventory provision of $6.563 million (in 2018 $10.004 million). Explain what does this inventory provision mean? Why did the inventory provision decrease during 2019 compared to 2018?

4. How does the inventory provision affect the value of inventory in the balance sheet?

5. Why might a manager who receives a bonus based on the reported profit tend to record a lower level of provision for inventory?

6. Do you think the valuation of inventory requires subjective judgements? Why or why not?

7. Refer to page 102 of the Bellamy’s Annual Report 2019. What reasons have the auditors mentioned for identifying the valuation of inventory as a key audit matter?

A2: Intangible assets and Goodwill 7 marks

Australian Accounting Standard AASB138, Intangible Assets, defines an intangible asset as an identifiable non-monetary asset without physical substance (paragraph 8). The Accounting Standard includes Goodwill as an intangible asset.

Refer to the Mayne Pharma Annual Report 2020 from the assessment tab:

In the Balance Sheet, (p.41) as at 30 June 2020, you can see that Intangible assets and goodwill has increased substantially from the prior year. Note 13 of the financial statements will assist you in answering the following questions:

1. Describe the ‘intangible assets’ for Mayne Pharma for the 2020 financial year.

2. Explain the potential possible reasons for the increase in the goodwill and intangible assets balance.

3. The company has recorded amortisation expenditure on intangible assets. What is the difference between amortisation expense and impairment expense?

4. How many cash generating units (CGU) the company has identified for impairment testing of goodwill and intangible assets?

5. Which CGU has the highest buffer against possible impairment charge based on the test that the company has conducted?

6. Which CGU is the most sensitive to the adverse changes in the key estimates and assumptions (changes in net sales growth, terminal growth rate, and weighted average cost of capital)?

7. How could managers manipulate the outcome of the impairment test?

A3: Corporate Governance Principles 12 marks

The questions below require an application of specific sections of the Corporate Governance Principles to the corporate governance statements made by ASX listed organisation Bega Cheese Ltd in its annual report 2019.

Referring to the ASX Corporate Governance principles (4th ed), specifically Principle 2, review the 2019 Bega Cheese Ltd Corporate Governance statements and the Annual Report of 2019 and critically evaluate compliance with the following recommendations:

(a) 2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills that the board currently has or is looking to achieve in its membership

(b) 2.4 A majority of the board of a listed entity should be independent directors.

(c) 2.5 The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.

(d) 4.1 (a) have an audit committee which: (1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and (2) is chaired by an independent director, who is not the chair of the board.

Part B: Reflective note 3 marks

Reflective writing is a way of thinking to explore your personal development with learning content (e.g. case study, lecture topics). A reflective note encourages you to gain self-knowledge and achieve clarity and better understanding of your thought. Describe your personal reflection of your learning outcomes from Module 1 and 2.

Appendix:

Access relevant annual reports from the assignment tab

Mayne Pharma Annual Report 2020

Bega Cheese Limited Annual Report 2019

Bellamy’s Organic Annual Report 2019

Bega Cheese Limited Corporate Governance Statement

Accounting and Reporting: Rubric for Assignment 1

Criteria Excellent Very Good Good Satisfactory Unsatisfactory Mark
PART A: Demonstrate an understanding of judgement and accounting standards used to prepare financial information The student has shown a very high level of ability in demonstrating an understanding of judgement and accounting standards used to prepare financial information The student has shown a high level of ability in demonstrating an understanding of judgement and accounting standards used to prepare financial information The student has shown a good ability in demonstrating an understanding of judgement and accounting standards used to prepare financial information The student has shown some ability in demonstrated an understanding of judgement and accounting standards used to prepare financial information The student has shown limited ability in demonstrating an understanding of judgement and accounting standards used to prepare financial information /27
PART B: Reflective note The student has shown a very high level of ability in conveying their concept of accounting The student has shown a high level of ability in conveying their concept of accounting. The student has shown a good ability in conveying their concept of accounting The student has shown some ability in conveying their concept of accounting. The student has shown limited ability in conveying their concept of accounting. /3
TOTAL and comments /30

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