First Question is of not more than 1000 words to make memorandum and its example is given at end of assignment and required points also given which need to discuss in this memorandum.
Second Question is to prepare Statement of Profit or Loss and Other Comprehensive Income for the year and Statement of Financial Position from given data and additional information and notes.
Third question is of about 500 word to write abstract of given article (additional resource) and own opinion.
Assessment Task 2 - Written and Practical Assignment
This assessment item relates to the course learning outcomes 2, 3 and 5.
Question 1
Astra Ltd is subject to a newly introduced emission rights scheme that has the objective of controlling the production of carbon dioxide (CO2) by providing incentives for entities to reduce their emissions.
On 1 July 2014, the regulator of the scheme will allocate emission allowances to Astra Ltdthat permit the emission of 60,000 tonnes of CO2 during the year ending 30 June 2015.
These allowances are allocated free of charge; there is no cost to Astra Ltd. During the year, Astra Ltd will deliver these allowances to the regulator to 'pay' for the CO2 emissions it makes. If emissions are made and no allowances are delivered, or the number of allowances delivered does not cover the emissions, then Astra Ltd will have to pay a shortfall charge by way of penalty.
If Astra Ltd requires additional allowances, it can purchase them directly from the regulator or from other entities through a trading market for allowances that has been established. Astra Ltd can also sell allowances through this market or 'surrender' them directly to the regulator for cash.
Diane Jones, the Chief Accountant of Astra Ltd, was unsure about how to account for the emission rights scheme so she called the accounting staff together to discuss the issue. However, this meeting produced conflicting views. Michael Knight, a senior accountant, proposed that all allowances (whether received for free or purchased) should be recognized as assets on the date of allocation or purchase. He also stated that, because the free allowances are allocated in anticipation of future carbon emissions, a liability for carbon emissions should be recognised on the date the allowances are allocated.
This approach was challenged by Rebecca Smith, another senior accountant, who stated that her opinion was that only the purchased allowances should be recognised as assets. Her reasoning was that, prior to the introduction of the emissions scheme, Astra Ltd could make unlimited carbon emissions at no cost. The free allowances do not alter the fact that Astra Ltd is in a worse position after the introduction of the scheme through being restricted in its ability to emit CO2.
Rebecca was also of the opinion that a liability for emissions should be recognised during the year as emissions actually occur.2
A different approach was taken by Rodney Kirby, one of the junior accountants. He agreed with Michael that all allowances were assets. However, he was of the opinion that the assets represented by the free allowances would offset the liability for emissions. He argued that whether an asset or liability was recognised by Astra Ltd would depend on whether there was an excess or deficiency of allowances held in relation to the liability for emissions. If the allowances held exceeded the probable emissions then the surplus allowances would be recognised as an asset. A liability would only be recognised when it was probable that the threshold (60,000 tonnes) would be exceeded and that additional allowances would need to be purchased. Concerned by these conflicting positions, Diane Jones has approached you and requested your advice on these issues. Required
Prepare a memorandum (of no more than 1,000 words) for the Chief Accountant that
Addresses the following:
How is an asset defined in the IASB Conceptual Framework for Financial Reporting 2010? What are the essential characteristics of an asset?
Apply this definition and discuss whether the emission allowances received for free and the purchased emission allowances satisfy the definition of an asset.
Is how an item is acquired (for example, through free allocation or purchase) relevant to whether or not it satisfies the definition of an asset?
How is a liability defined in the IASB Conceptual Framework? What are the essential characteristics of a liability?
Apply this definition to the three alternatives suggested at the meeting to determine when a liability for carbon emissions is incurred and should be recognised. The alternatives are:
When the free allowances are initially allocated on 1 July 2014.
As and when carbon emissions are made during the year.
Only when it is probable that carbon emissions will exceed the initial threshold and additional allowances will have to be purchased.
Discuss the extent to which the IASB Conceptual Framework provides guidance in selecting a measurement base for any assets and liabilities that might be
recognised? What other criteria in the IASB Conceptual Framework might be useful in selecting a measurement base?
Question 2
You have been asked to prepare the financial statements for Drayton Ltd for the year ended 30 June 2013. The following information has been made available to you:
Account Amount
(
000)
Notes
Debit Credit
Cash and cash equivalents 11,700
Inventories 15,600
Trade and other receivables 9,800
Property, Plant and Equipment 55,900
Investment properties 970
Finance lease receivable 525 1
Available-for-sale financial assets 4,380 2
Other financial assets 5,300 3
Intangible assets 14,300
Borrowings 36,600 4
Current tax liabilities 3,650
Provisions 3,900 5
Deferred income 400 6
Other financial liabilities 90 7
Retirement benefit obligation 260 8
Other non-current liabilities 21,300
Trade and other payables 9,200
Other components of equity (as at 1 July 2012) 3,286
Share capital 15,500
Retained Earnings (as at 1 July 2012) 11,879
Revenue 140,900
Other income 4,230
Loss for the year from discontinued operations 9,295
Distribution expenses 5,060
Cost of sales 87,600
Gain on revaluations of property, plant and equipment 3,150 9
Marketing expenses 3,350
Income Tax Expense 8,079
Occupancy expenses 2,040
Re-measurement of defined benefit liability 85 10
Administration expenses 12,800
Finance costs 4,450
Other expenses 2,900
Gain on re-measuring available-for-sale financial assets 280 11
Fair value gains on cash flow hedges 186 12
Income tax component of:
Re-measurement of defined benefit liability
Gain on revaluations of property, plant and equipment
Gain on re-measuring available-for-sale financial assets
Fair value gains on cash flow hedges
644
35
23
25
254,836 254,8364
Notes
1. $105 of this total will be realised within 12 months after the reporting period. The remainder will be realised beyond 12 months after the reporting period.
2. Management expects to dispose of these within 12 months after the reporting period.
3. These will be realised beyond 12 months after the reporting period.
4. $12,200 will be settled within 12 months after the reporting period. The remainder will be settled beyond 12 months after the reporting period.
5. $1,300 will be settled within 12 months after the reporting period. The remainder will be settled beyond 12 months after the reporting period.
6. This will be earned within 12 months after the reporting period.
7. This will be settled beyond 12 months after the reporting period.
8. This will be settled beyond 12 months after the reporting period.
9. Before tax amount. This item will not be reclassified subsequently to profit or loss.
10. Before tax amount. This will not be reclassified subsequently to profit or loss.
11. Before tax amount. This may be reclassified subsequently to profit or loss.
12. Before tax amount. This may be reclassified subsequently to profit or loss.
Other information
(a) In accordance with paragraph 60 of AASB 101 Presentation of Financial Statements, Drayton Ltd presents current and non-current assets and current and non-current liabilities as separate classifications in its statement of financial position.
(b) In accordance with paragraph 10A of AASB 101 Presentation of Financial Statements, Drayton Ltd presents a single statement of profit or loss and other comprehensive income, with profit or loss and other comprehensive income presented in two sections.
(c) Drayton Ltd presents the income tax related to items of other comprehensive income in accordance with paragraph 91(b) of AASB 101 Presentation of Financial Statements.
(d) Profit for the year plus the re-measurement of defined benefit liability (including the related income tax on the re-measurement) is closed to Retained Earnings.
(d) All other items of other comprehensive income (including the related income tax on these items) are closed to Other Components of Equity.5
Required:
Prepare, in accordance with AASB 101 Presentation of Financial Statements, the following
financial statements for Drayton Ltd:
(a) Statement of Profit or Loss and Other Comprehensive Income for the year ended 30
June 2013. (4 marks)
(b) Statement of Financial Position as at 30 June 2013.
Question 3
The following journal article is available in the course's Moodle page:
Hines, RD 1989, 'Financial Accounting Knowledge, Conceptual Framework Projects and the Social Construction of the Accounting Profession', Accounting, Auditing & Accountability
Journal, vol. 2, no. 2, p. 72-92.
Required
(a) Provide, in no more than 300 words, an abstract of this article. The abstract should:
? Consist of a single paragraph,
? Summarise and describe the major points of the article to the reader, and
? Be an original work (i.e. paraphrase) rather than a series of direct quotes from the
article itself. (5 marks)
(b) Provide, in no more than 200 words, your own opinion as to why you agree or
disagree (in full or in part) with the argument made by Ruth Hines in her article.
(2 marks) 6
Submission requirements
You must submit this assignment electronically through the link in the 'Assessment' block in
the course's Moodle page.
There is a 5% penalty per day for late submissions. This penalty starts to apply if you submit
your assignment after 11.45pm on the due date.
Referencing
Your assignment should include references (both in-text and in a reference list at the end of
the assignment) that conforms to the Harvard author-date style.
A copy of the Harvard Referencing Guide (author-date) 2013 can be accessed from:
? The 'Course Resources and Website Links' section in the course's Moodle page, or
? From the Moodle page for the Academic Learning Centre (ALC).
Assignment Presentation
? Use a Word Processing Package. For example, Microsoft Word.
? You do not need to include a title page or a table of contents.
? You do not need to include the Marking Sheet: this will automatically be included
when your assignment is downloaded for marking.
? You should number all of the pages and include your name and student number (as
either a Header or a Footer) on each page.
? Use the question numbers to indicate which question you are answering. Please do
not write the question as part of your answer.
? You should use a consistent font throughout your assignment. Suggested fonts
include Times New Roman or Arial.
? The font size should be 12-point and you should use 1.5 line spacing.
? Question One requires you to write a Memorandum. An example of this is shown on
the following page.7
MEMORANDUM
DATE: 6 February 2014
TO: Students in ACCT19062
FROM: D. Keene
SUBJECT: Format for a Memorandum
A Memorandum is a formal written document that, as in this example, is headed at the top
by MEMORANDUM in bold and centered. Below this are: (1) the date in full; (2) the person
to whom the Memo is addressed; (3) the name of the person sending the Memo; and (4) a
subject line that indicates the subject matter.
The body of the Memorandum begins with an introduction that identifies the subject and
provides an overview of the contents. The length of the introduction should be no more than
one paragraph but it depends on the needs of the reader: how much do they already know
about the subject? This is followed by the discussion which moves through the points to be
made in a logical order. At the end is a conclusion that reinforces and reiterates the main
points made in the discussion.
Heading
The body of the Memorandum consists of a series of paragraphs that begin flush with the
left-hand margin. One-and-a-half line spacing should be used and paragraphs should be
separated by a double space. A Memorandum does not contain a salutation (for example,
'Dear Diane') or a complimentary close (for example, 'Yours Sincerely' or 'Regards').
Headings can be used to organise the material but these should not be overused. Headings
should, as the example above indicates, be in bold so that they clearly stand out. 8
Assignment Advice
It is important that you commence work on the assignment as soon as possible. It will be to
your benefit to spread the work involved in completing the assignment over as long a period
as possible rather than leaving everything to the last minute.
It was evident last term, based on the time that assignments were submitted through
Moodle, that many students were still doing substantial work on their assignment on the day
the assignment was due. The consequence was that:
? Many assignments were submitted late and incurred a penalty,
? Answers had been 'cut and pasted' from another source and had little or no
relevance to the actual question,
? Questions were poorly answered, and
? Questions were left unanswered.
Furthermore, it was clear that quite a few students had not checked the Discussion Forums
in Moodle where many of the assignment questions had been discussed.
Overall, the assignment marks were, on average, disappointingly low. One effect of this was
that students had to obtain higher marks in the other assessment tasks in order to pass the
course.
You should not assume that starting and finishing your assignment early will guarantee high
marks; however, leaving it to the last minute does increase the likelihood of low marks.
In starting early, it is important to have a plan that provides structure to your activities. To
assist you with this, the following table contains a suggested timeline for the completion of
the assignment. You should use this as a starting point to develop your own plan based on
your specific circumstances. Furthermore, your plan will need to be flexible and, as you work
on the assignment, you should adjust or amend your plan as necessary.
Week: Date Beginning: Activity:
1 24 February Read questions/Research
2 3 March Read questions /Research
3 10 March Research/Writing
4 17 March Writing
5 24 March Writing/ Revising and editing
Break 31 March Revising and editing
6 7 April Finalise/Submit9
You should start by carefully reading through the questions with the intention of
understanding what is being asked of you. This may sound obvious but failure to address
the specific question that has been asked is a situation all too frequently encountered by
markers. If you are unsure about a question then please contact your tutor or lecturer or
post a message to the discussion forum on Moodle.
In the research phase, you will need to locate and read material relevant to the questions.
Once you have the material you can start the writing. Initially, your answers will be fairly
'rough' as you simply get your ideas onto the page.
Of critical importance is the next stage which is revising and editing. In the suggested
timeline above you can see that at least a week (if not more) has been allowed for this
activity. The more time you can devote to this the better.
Editing and revising involves carefully and slowly going through what you have initially
written with the following in mind:
? Has the specific question been addressed? Is there other material that should be
included in your answer? Is there information included in your answer which,
although interesting, is not directly relevant to the question?
? How well is your answer structured? This is of more relevance to essays and
reports. However, even for short answers, you should still consider how the individual
statements that comprise your answer are: (1) ordered; and (2) relate to each other.
? Look at the sentences and words used. Do these best convey the meaning that you
intend? Could a word be changed or a sentence rearranged to make your meaning
clearer? Also consider the length of your sentences.
? Check your referencing: both in-text and your reference list. It is useful to compile
the reference list as you write/edit. Ensure that all in-text references: (1) have been
included; (2) are in the appropriate format; and (3) are included in the reference list.
Edit and revise your assignment as many times as you can until you are satisfied. Then
ensure that it is appropriately formatted before submitting it.
The approach discussed here (of working to a structured plan with an emphasis on revising
and editing) is a good skill to develop when later on, in other courses you study, you are
required to write longer pieces of assessment. 10