Assessment Details and Submission Guidelines MA601 Theory and Current Issues in Accounting School Business Course Name Master of Professional Accounting (MPA) Unit Code MA601 Unit Title Theory and...

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Assessment Details and Submission Guidelines



MA601 Theory and Current Issues in Accounting




School



Business




Course Name



Master of Professional Accounting (MPA)




Unit Code



MA601




Unit Title



Theory and Current Issues in Accounting




Trimester



Trimester 1, 2021




Assessment Author





Dr Jayasinghe Hewa Dulige




Assessment Type



Report




Assessment Title



Assessment Task 4




Unit Learning Outcomes Addressed:



The purpose of this assignment is to assess the following Learning Outcomes:


c. Evaluate different accounting theories and their implications in policy choice by managers.


d. Synthesize the complex elements of the Conceptual Framework and apply them to accounting activities.


e. Apply their knowledge to identify strategies to meet accounting issues and problems in new situations.




Weight



20%




Total Marks



100




Word limit



1250-1500




Release Date



Week four




Due Date



Week 10




Submission Guidelines



· This assignment should be completed in groups of five


· All work must be submitted on Moodle by the due date along with a completed Assignment Cover Page.


· The assignment must be in MS Word format, 1.5 spacing, 11-pt Calibri (Body) font and 2 cm margins on all four sides of your page with appropriate section headings.


· Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using APA 6th
edition for the School of Business.




Extension



If an extension of time to submit work is required, an Application for Special Consideration and supporting documentation must be submitted directly to the School's Administration Officer via your MIT AMS login


[https://online.mit.edu.au/ams/default.aspx?ReturnUrl=%2fams%2f]. You must submit this application no later than three working days after the due date of the specific piece of assessment or the examination for which you are seeking Special Consideration. Further information is available at:



http://www.mit.edu.au/about
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mit/institute
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publications/policies
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procedures
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and
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guidelines/special

considerationdeferment




Academic Misconduct






Academic Misconduct is a serious offence. Depending on the seriousness of the case, penalties can vary from a written warning or zero marks to exclusion from the course or rescinding the degree. Students should make themselves familiar with the full policy and procedure available at:

http://www.mit.edu.au/about-mit/institute-publications/policies-procedures-and-guidelines/Plagiarism-Academic-Misconduct-Policy-Procedure. For further information, please refer to the Academic Integrity Section in your Unit Description.










Assessment Cover Sheet





















































Student ID Number/s:



Student Last name/s:



Student First name/s:
















































Course:



School:



Unit code:



Unit title:



Due date:



Date submitted:



Campus:



Lecturer’s Name:



Tutor:











































Student Declaration


I/We declare and certify that:


1. the work contained in this assessment is my/our own work/group work, except where acknowledgement of sources is made;


2. this assessment has not been submitted previously for academic credit in this or any other course;


3. I/we have read MIT’s Plagiarism and Academic Misconduct Policy and Procedure, and I/we understand the consequences of engaging in plagiarism, collusion and contract cheating;


4. a copy of the original assignment is retained by me/us and that I/we may be required to submit the original assignment to the Lecturer and/or Unit Co-ordinator upon request;




I/we have not plagiarised the work of others or participated in unauthorised collaboration or contract cheating when preparing this assessment.



MIT ID



Signature



Date























































Assignment Description


On 11 January 2016, the Chairperson of the IASB, Hans Hoogervorst, made the following comments in connection with the new accounting standard on accounting for leases in an address entitled ‘Introductory comments to the European Parliament’ in Brussels, Belgium (as reported 11 January 2016 on the IASB website at
www.ifrs.org): Extracts from the speech is as follows.


I would like to make some comments about our upcoming Leases Standard, which we will publish the day after tomorrow. Currently, listed companies around the world have around 3 trillion euros’ worth of leases, especially in sectors such as the airline industry, retail and shipping. Under current accounting requirements, over 85 per cent of these leases are labelled as operating leases and are not recorded on the balance sheet. Clearly, the accounting today does not reflect economic reality. Despite operating leases being off balance sheet, there can be no doubt that they create real liabilities. During the financial crisis, some major retail chains went bankrupt because they were unable to adjust quickly to the new economic reality. ………, In fact, their off balance sheet lease liabilities were up to 66 times greater than the debt reported on their balance sheet. Moreover, the current accounting for leases leads to a lack of comparability. An airline that leases most of its aircraft fleet looks very different from its competitor that bought most of its fleet, even when in reality their financing obligations may be very similar. There is no level playing field between these companies.


These problems will be resolved in the upcoming Leases Standard. All leases will be recognised as assets and liabilities by lessees. The accounting will better reflect the underlying economics. This change is expected to affect roughly half of all listed companies and will not be popular with everyone.


We do not deny there will be costs involved in updating systems to implement the new Leases Standard, but we have done our best to keep these costs to a minimum. ……The new visibility of all leases will lead to better informed investment decisions by investors, and to more balanced lease-versus-buy decisions by management. IFRS 16 will lead to improved capital allocation, which should be beneficial for economic growth.


On the following day, the Australian accounting standard board (AASB) issued its own media release in connection with the new IASB leasing standard and AASB 16 ‘Leases’ was issued in February 2016, replacing AASB 117 ‘Leases’. AASB 16 applies to annual reporting periods beginning on or after 1 January 2019. In contrast to the previous Standard, in AASB 16 the leases is no longer to classify each lease as either an operating lease or a finance lease. All Australian companies must recognize all leases as finance leases.


AASB16 states that:


“The previous accounting model for leases required lessees and lessors to classify their leases as either finances leases or operating leases and account for those two types of leases differently. That model was criticised for failing to meet the needs of users of financial statements because it did not always provide a faithful representation of leasing transactions. In particular, it did not require lessees to recognise assets and liabilities arising from operating leases” (AASB pp 5).




The Australian Financial Review on 21 March 2019, published an article entitled “$100b of lease liabilities head for balance sheets” (by Vesana Poljak, p.17) that the large listed company Wesfarmers had assessed the impacts of applying the requirements of AASB 16 to be estimated increase in reported assets (via right-of-use-assets) of between $5.5 billion and $6.5 billion, and an increase in reported liabilities (leases) of between $6.3 billion and $ 7.3 billion.




You are required to critically examine above and provide your opinion and suggestions about the issue of Australian accounting standard AASB16 leases, mandating Australian company accountants to recognise all the leases as finance leases in the balance sheet.




In your report:




1. Define a lease. Identify five key provisions that are likely to be included in a lease agreement.


2. Distinguish between operating leases and finance leases in accordance with AASB117 leases (previous standard).


3. Explain the motivation for accounting standard setters revising and releasing a new leasing standard, “AASB 16 leases”, in February 2016, effective from 1 January 2019.


4. Explain why the Chairperson of the IASB believes that the former accounting standard for leases did ‘not reflect economic reality’.


5. Describe why, under the former accounting standard, reporting entities’ ‘off balance sheet lease liabilities were up to 66 times greater than the debt reported on their balance sheet’?


6. Why does the Chairperson of the IASB argue that under the former accounting standard for leases there was ‘no level playing field’ between some airline companies?


7. Are the new requirements for lessee accounting under AASB 16 ‘Leases’ likely to overcome the problems associated with lease classification under AASB 117 ‘Leases’.




Australian Accounting Standard Board (2016). Leases, AASB 16. Retrieved from:
https://www.aasb.gov.au/admin/file/content105/c9/AASB16_02-16.pdf


Australian Accounting Standard Board (2007). Leases, AASB 117. Retrieved from:
https://www.aasb.gov.au/admin/file/content105/c9/AASB117_07-04_COMPapr07_07-07.pdf










This assignment must be written/structured in the form of a ‘business report’. That is, it must have a/an;


(a) Executive summary (between 75 to 100 words),


(b) Introduction that;


Succinctly summarizes this assignment’s topic and its key issues, controversies, etc. (no more than 100 words), and


(c) Body that addresses all the requirements – see above 1-7 (no more 1250 words),


(d) Conclusion that sums up the mains issues of this assignment (no more than 100 words), and


(e) Reference list containing all cited works.


(f) Proper English Grammar, appearance, format, etc.


At least 3 recognized journal article should be cited.





































































Marking criteria:



MA601 /
Theory and Current Issues in Accounting

/Semester T1, 2021, Assignment





































Name:







Student Number









Name:







Student Number








Name:







Student Number








Name:







Student Number





















































































Assessment


Criteria




Total Marks




Marks awarded




Part 1


Criterion 1 - Structure and Clarity of the Report/Assignment


Ø introductory paragraph


Ø logical flow of clarity and structure of ideas and arguments


Ø appropriate use of paragraph and headings to explain and discuss ideas


Ø appropriate concluding paragraph





3


2


2


3







Total marks for criterion 1



10






Criterion 2 – Part 1 - Body/contents


Ø Define a lease. Identify five key provisions that are likely to be included in a lease agreement.


Ø Distinguish between operating leases and finance leases in accordance with AASB117 leases (previous standard).


Ø Explain the motivation for accounting standard setters revising and releasing a new leasing standard, “AASB 16 leases”, in February 2016, effective from 1 January 2019.


Ø Explain why the Chairperson of the IASB believes that the former accounting standard for leases did ‘not reflect economic reality’.


Ø Describe why, under the former accounting standard, reporting entities’ ‘off balance sheet lease liabilities were up to 66 times greater than the debt reported on their balance sheet’?


Ø Why does the Chairperson of the IASB argue that under the former accounting standard for leases there was ‘no level playing field’ between some airline companies?


Ø Are the new requirements for lessee accounting under AASB 16 ‘Leases’ likely to overcome the problems associated with lease classification under AASB 117 ‘Leases’.





5



5




10


10




10




10




15



































Total marks for criterion 2



65






Criterion 3 - Research and Analysis


Ø quality of research undertaken


Ø accuracy and depth of analysis


Ø appropriate use of in-text and end text referencing


Ø quality of information sources


Ø appendices





6


5


3


3


3







Total marks for criterion 3



20






Criterion 4 - Presentation


Ø layout


Ø formatting


Ø spelling/grammar


Ø proof read


Ø professional format





1


1


1


1


1







Total marks for criterion 4



5







Total marks




100








Final marks




20







Other Comments















Using Technology for Assessment



















Rationale




Activities




Technological tools selected





· Industry knowledge & skills


· reflection on learning


· feedback on performance


· practice of critical thinking







· check for plagiarism


· problem-based learning





· online forum on Moodle


· Turnitin










Marking guide for assignment – MA601 T1 2021










































Criteria/ Grades








Fail (N) [Unsatisfactory]









Pass (P) [Satisfactory]




50%-59%





Credit (C) [Good]




60%-69%




Distinction (D) [Very Good]




70%-79%





High Distinction (HD) [Excellent]




80-100%





Evaluation of Information









Information is used with some interpretation/evaluation, but not enough to develop a coherent analysis or synthesis. Analyses and evaluates information to complete a limited range of activities. Analysis and evaluation reflect little expert judgment, intellectual independence, rigour and adaptability.



Selects relevant information to address the issues in the case. Identifies logical flaws in the information provided in the case. Analysis and evaluation reflect acceptable level of intellectual independence, rigour, authoritative judgment and adaptability.






Selects relevant information to address the issues in the case. Identifies and rectifies logical flaws in the information provided in the case. Information is often selected with interpretation/evaluation to develop a comprehensive critical analysis or synthesis. Evaluates available information, identifies missing information. Analysis and evaluation reflect good intellectual independence, rigour, authoritative judgment and adaptability.















Systematically selects relevant information to address the issues in the case. Identifies and rectifies logical flaws in the information provided in the case. Information is often selected with a high level of interpretation/evaluation to develop a comprehensive critical analysis or synthesis. Thoroughly evaluates available information, identifies missing information and makes reasonable assumptions to fill gaps in evidence. Analysis and evaluation reflect a high level of intellectual independence, rigour, authoritative judgment and adaptability.



Systematically selects relevant information to address the issues in the case. Identifies and rectifies logical flaws in the information provided in the case. Information is selected with a high level of interpretation/evaluation to develop a comprehensive critical analysis and/or synthesis. Very thoroughly evaluates available information, identifies missing information and makes reasonable assumptions to fill gaps in information needed to address issues in the case. Analysis and evaluation reflect a consistently very high level of intellectual independence, rigour, authoritative judgment and adaptability.




Use of Existing Knowledge









Often employs knowledge not relevant to the issues in the case, orrepresenting limited points of view/ approaches. Does not synthesise information and/or demonstrate an integrated understanding of accounting. Limited ability to demonstrate satisfactory understanding of theoretical accounting knowledge and professional practice.



Presents information and knowledge from relevant sources representing various points of view or approaches, demonstrating satisfactory understanding of theoretical accounting knowledge and professional practice.



Synthesises complex information and knowledge from relevant sources representing various points of view or approaches, demonstrating good understanding of theoretical accounting knowledge and professional practice.






Synthesises complex information and knowledge from a range of relevant sources representing various points of view or approaches, demonstrating mastery of theoretical accounting knowledge and understanding of professional practice.



Synthesises complex information and knowledge from a broad range of relevant sources representing various points of view or approaches, demonstrating a high level of mastery of theoretical accounting knowledge and expert understanding of professional practice.




Analysis









Rarely demonstrates the ability to organise and synthesise complex information to develop ideas. Often lacks reflection on conclusions and professional decisions



Organises and synthesises evidence to develop acceptable ideas. Attempts to reflect on advanced concepts and professional accounting practices. Demonstrates attempt of critical analysis and conceptualisation of information provided in the case study. Major conclusions and professional decisions interpreted and justified.



Organises and synthesises complex information to develop good ideas. Reflects on advanced concepts and professional accounting practices. Critically analyses and conceptualises information provided in the case study. Interprets and justifies conclusions and professional decisions.



Organises and synthesises complex information to develop insightful ideas. Reflects deeply on advanced concepts and professional accounting practices. Critically analyses and conceptualises information provided in the case study. Interprets and justifies conclusions and professional decisions.



Organises and synthesises complex information to develop highly insightful ideas. Reflects very deeply on advanced concepts and professional accounting practices. Critically analyses and conceptualises information provided in the case study. Authoritatively and succinctly interprets and justifies conclusions and professional decisions.





Answered 1 days AfterMay 24, 2021

Answer To: Assessment Details and Submission Guidelines MA601 Theory and Current Issues in Accounting School...

Harshit answered on May 25 2021
146 Votes
EXECUTIVE SUMMARY
This report explains concepts of AASB-117 its uses and its limitations which causes the board to withdraw it from the accounting standard and revise it and latter introduce a new standard for accounting for lease. This report also elaborates the new requirements of the standards and the changes made in the standard compared to the previous standard. This report presents a o
verall comparison between the new and old standards and describes new ways to deal the operating & financial lease.
INTRODUCTION
AASB 16 changes the manner in which organizations represent leases in their fiscal summaries, particularly yet to be determined sheet and pay explanation. It replaces the past rent bookkeeping standard AASB117. The reason for AASB 16 is to connect a significant bookkeeping hole in AASB 117: wobbly sheet working leases. You may likewise need to realize how to figure utilization rights. The option to utilize is the privilege of the tenant to utilize the resource during the rent term. The underlying measure of the rent obligation in addition to any rent installments made to the lessor before the beginning of the rent in addition to any underlying direct costs less any rent motivators got. They completely mirror every one of your responsibilities and furnish financial backers and investors with more valuable data in the budget summaries. Notwithstanding, there is a disservice. Adjusted, for certain special cases. For working renting organizations, this will be a significant change. The inhabitant recognizes the option to utilize and rent commitments. The estimation of rent liabilities under the new standard is essentially equivalent to the estimation of account rent liabilities under AASB 117.
1. As a useful choice, the element doesn't have to reevaluate whether the rent is a rent or a rent at the hour of introductory appropriation, however permits the substance to: (a) apply this norm to an agreement recently called a rent. The element applies the progress necessities in sections C5-C18 to this sort of rent. (B) This standard doesn't matter to gets that have not been recently resolved to incorporate leases appropriate to IAS 117 and translation Lease Rent start date (rent start date) The date on which the lessor gives the fundamental resources for the tenant for use.
Monetary life: The timeframe during which a resource is financially utilized by at least one client, or the quantity of creation units or comparative units that at least one client may acquire from the resource.
Change compelling date Both sides consent to change the date of the rent understanding. To apply the necessities of this norm to the bookkeeping records of the lessor, the reasonable worth can be traded for the measure of resources or liabilities liquidation.Stakeholders and educated gatherings in exchanges between free gatherings.
The loan fee implied in the rent decides the financing cost of (a) the rent installment and (b) the present value.The unstable remaining worth is equivalent to the amount of (I) the reasonable worth of the hidden resource and (ii) any underlying direct expenses of the lessor. Resources) for a while.
Rent installment the rent related costs paid by the lessor to the resident, or the lessor's reimbursement, or the renter's costs. o Consideration for leases that are not piece of the first rent terms (for instance, adding or ending the option to utilize at least one hidden resource, or broadening or shortening the rent term as indicated by the agreement)
2. A rent in which all dangers and prizes identified with resource possession stay with the lessor for the rented resource is called a working lease. In this kind of rent, the resource is returned by the renter subsequent to utilizing it for the settled upon rent term.
In a monetary rent (otherwise called a capital rent), the dangers and prizes identified with responsibility for resource being rented are moved to the...
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