Financial Accounting 3 Assignment Study Period 5 2020This assignment is designed to develop students’ knowledge and critical analysis and problem-solving skills around two course objectives:CO3. recognise and explain the theoretical principles and development processes that influence the development of International Accounting StandardsCO4. communicate in a professional manner in writing to both an accounting and non-accounting audienceAs the aim of Financial Accounting 3 is to develop your ability to use accounting standards generally, and not to just be able to apply the ones covered in the course, this assignment is extremely relevant to the course. It aims to develop your awareness of the process by which accounting standards are produced and changed so that in your future career you are able to follow the debates about the accounting standards and determine how these will impact on the organisations for which you work, or your clients. Some students may want the assignment to just be based on the accounting standards covered in concept videos. This suggests they have missed the main aim of Financial Accounting 3 and have a very narrow understanding of the education process. An assignment is an opportunity for you to develop deeper research, knowledge, critical analysis and problem-solving skills, and judgement skills that will serve you well in your future career. Course Objectives 3 and 4 are only assessed in this assignment and not in the exam. We hope you appreciate the opportunities this assignment affords you and that by the time you submit it, you will feel more empowered to research and explore future accounting standard issues.Importantly, assignments are an opportunity for students to develop the Threshold Learning Outcomes (TLO) of the Australian Qualifications Framework (AQF) that are essential for graduates to gain employment. As well as developing your understanding of the accounting standard setting process through the International Financial Reporting Standards (IFRS) that apply internationally and that you will need to use when you are an accountant, this assignment is designed to develop skills highly sought after by employers.Specifically, this assignment aims to develop the AQF TLOs of:• Knowledge, Judgement and Critical analysis and Problem-solving skills• Written communication skills: Hence the high weighting on spelling and grammar in the criteria• Self-management skills. These will be developed through working on the assignment throughout the study period as guided by the learnonline site and by keeping a diary as you develop the assignment.This assignment is also designed to develop the Program Learning Outcome of:• Written communication skills.You will progressively develop your report throughout the study period. Time will be allocated in workshops/virtual classes to discuss any questions that you may have regarding writing, knowledge, analytical and judgement skills. The course discussion forum will also be used to develop these skills. Please make the most of this feedback to identify and action learning opportunities and self- improvements. 1
Written Communication SkillsWritten communication skills are essential for an accountant. To this end 15% of the marks for this assignment are allocated to correct grammar. Students will lose 1 mark for each grammatical error up to a maximum of 15 marks (though the impact on your grade will be limited to one grade level, i.e. say P1 to P2, not P1 to F1). The following tips and websites are recommended to help you improve your grammar prior to completing the assignment:1. “Use a good dictionary such as a Macquarie. Some online sources cannot be trusted. (Make sure you use an Australian or UK dictionary, as US spelling would not be appropriate in the context of this assignment. As academics we change spelling according to whether we are writing for an Australian or a US journal.)2. Be careful with punctuation, especially apostrophes, because misuse can unintentionally change the meaning of a sentence.3. Make sure the subjects and verbs of your sentences agree. For example, ‘The icing on the cakes was white.’ not ‘were white’.4. Take care with tenses so you don’t confuse the times when events happened.5. When writing formally, use complete sentences. Broken sentences are acceptable inspeech, not in print.”Useful websites:Dr Julia Miller, The Advertiser, p.8 Monday 23 February 2015.• Use Studiosity help, it is on the left side of the course learnonline site.• Al-Maskari, KM (2012) A practical guide to business writing: Writing in English for Non-Native Speakers, Wiley, New York e-book (accessed 28 July 2020) The following links will also help you with improving your writing:• https://lo.unisa.edu.au/course/view.php?id=3839 (Referencing guides) (accessed 28 July 2020)• https://lo.unisa.edu.au/mod/book/view.php?id=252144 (Paraphrasing). This site is highly recommended. (accessed 28 July 2020).• https://lo.unisa.edu.au/mod/book/view.php?id=1144641 (Grammar: Punctuation resources). (viewed 28 July 2020)Although it would not be normal to reference in business memos or letters to clients in this assignment it must be remembered that this is also an academic exercise and hence the use of referencing is essential. You are required to use the Harvard Referencing style in this assignment. Use of headings in the memo and letter is encouraged. Headings are effective to organise text by dividing a document into manageable sections. Headings are also important signposts which guide the reader. They need to be brief and descriptive, in bold font, and not used excessively.Please also read and use the resources ‘Communicating with a target audience’ and ‘Editing a written document for professional submission’ which are available on the course learnonline site. 2
Self-Management SkillsBeginning assignments sooner rather than later tends to lead to better learning outcomes and less academic integrity issues. The assignment will be covered at various stages throughout the study period in workshops and virtual classrooms. Planning early and setting short term goals with a piece of assessment rather than just the due date results in higher learning outcomes (Zimmerman, Bandura & Martinez-Pons 1992, p. 664). By developing the assignment over time, rather than in a rush in the last day or two, provides students with the opportunity to develop the TLO for Accounting in the AQF of Self-Management: Reflect on performance feedback to identify and action learning opportunities and self-improvements. At the end of the assignment Template is a diary that has to be filled in by students. You have to do more than just put the dates in the left hand column. You are expected to explain fully what you have done in each step and when. Students who simply put the dates in the left hand column will be considered to have not completed the diary as a diary is a record of what has been done and not simply dates.Note: falsely completing the assignment diary would constitute a form of academic misconduct under paragraph 9.2.1 (c) and (f) of the Academic Assessment and Procedures Manual and will be referred to an Academic Integrity Officer with a view to imposing a penalty of at least zero for the assignment.3
Assignment taskThis assignment comprises two tasks: (1) Memo (2) Short letter. The detailed instructions are as below:Recently, the International Accounting Standards Board (IASB) has issued a new version of Property, Plant and Equipment—Proceeds before Intended Use, which made amendments to IAS 16 (AASB 116) Property, Plant and Equipment. These amendments were finalised after consulting a range of stakeholders. The IASB’s (2018) staff paper “AP12B: Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) – Feedback Analysis” provides an overview of stakeholder feedback and staff analysis.The However, a group of investors have approached the IASB expressing their concern over these amendments and have asked the board to review its decision because of the implications these have on extractive and petrochemical industries. In response, the IASB has formed a consultancy group comprising accounting professional bodies and accounting firms to gather expert feedback and opinion on the proposed amendments to Paragraph 17 of IAS 16. The accounting firm for which you work (this is just pretend, most students are not currently working for an accounting firm, use your imagination to make up a name and letterhead for your accounting firm) has also received an invitation to join the IASB’s consultancy group and comment on the proposed amendments to IAS 16 Paragraph 17.Your accounting firm has asked you to undertake rigorous research to explain the issues raised in the IASB’s (2019) staff paper “AP12A: Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) – Transition, Effective date and Due process” and advise whether or not your firm should support the proposed amendments to IAS 16 Paragraph 17.Important note: Although the above IASB’s (2019) staff paper covers various aspects of the standard amendment process, the scope of this assignment is limited to Summary of the amendments (paragraphs 5–7) and Transition issues for entities that are already applying IFRS Standards (paragraphs 8–15).(1) MemoIn your own words write a memo to your colleagues at the accounting firm providing critical analysis of the current requirements and proposed amendments to the accounting standard. Your memo should include:(a) Explain in what ways these proposed amendments to IAS 16 Paragraph 17 will change the accounting for such sale proceeds before an asset’s intended use.(b) Critical analysis of the current requirements of IAS 16 Paragraph 17.Note: Your critical analysis should include relative merits and demerits of continuing with the existing requirements of IAS 16 Paragraph 17. Therefore, you need provide both for and against evidence-based arguments.(c) Critical analysis of the proposed amendments to IAS 16 paragraph 17?Note: Your critical analysis should include relative merits and demerits of introducing proposed amendments to IAS 16 paragraph 17. Therefore, you need provide both for and against evidence-based arguments.(d) Advice on whether or not your accounting form should support the proposed amendments to IAS 16 Paragraph 17.Note: This advice should be supported with a well-justified logical argument based on the critical analysis of the current requirements and proposed amendments to IAS 16 Paragraph 17. 4
(2) LetterOne of the firm’s clients has recently acquired an item of Property, Plant and Equipment (PPE) and is in the process of testing the item to check whether it is functioning properly. This item is not yet available for use. The following is the equipment and testing related information for the period 2020-21:Acquisition cost of the item of Property, Plant and EquipmentCosts associated with the testing process to dateCost of samples produced during the testing processProceeds from selling sample items produced during the testing phase Average annual profit$200 million $7 million $6 million $9 million $30 millionDue to the current COVID situation, the client is experiencing a significant decline in the demand and selling price of its commodities. The client is highly concerned that the proposed amendments to IAS 16 will distort the company’s reported profit and net assets.Therefore, in your own words, draft a short letter to the client explaining the impact of proposed IAS 16 amendments (use your imagination for the client’s industry, name and asset). The client letter should:(a) Provide a brief overview of the current requirements and proposed amendments without technical using accounting terminology. Remember your client is not an accountant.(b) Explain and illustrate possible impact of the proposed amendments to IAS 16 using the above facts. Please assume that the effective date for the proposed amendments is 1 July 2020.Hint: Consider how the proposed amendments would impact key financial performance metrics and disclosure requirements in the financial statements of the client.When you are proud of what you have written, then you are ready to submit!5
Resources:• AASB 116 – Property, Plant and Equipment• www.ifrs.org > Projects > Completed projects > Completed research, maintenance and other projects > Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16).• You must use the key sources (i.e. IASB 2018 and 2019 staff papers) mentioned in the assignment task to develop your arguments.• Look at all tabs but in particular the “Project History” and “Consultation Feedback” tabs to develop your arguments. Refer to at least one comment letter when addressing the second and third criteria of the memo, i.e. you must refer to at least two comment letters.• FA3 Assignment Rubric SP5 2020 (this provides the key criteria against which your memo and letter will be assessed and hence provides a possible structure for these two documents.)• How to set out a business memo and a letter to a client. You can either use templates provided in Microsoft Word or you can find many examples on the Internet. Remember to reference any Internet site you use. The following is also an excellent resource available electronically via the UniSA library:Al-Maskari, K 2012, A Practical Guide To Business Writing: Writing in English for Non- Native Speakers, Wiley, New York e-book• Written communication skills: see earlier section for references and links. Key references:IASB (2019) “AP12A: Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) – Transition, Effective date and Due process”, IFRS Foundation, accessed on 27 July 2020, https://cdn.ifrs.org/-/media/feature/meetings/2019/october/iasb/ap12a-implementation- matters.pdfIASB (2018) “AP12B: Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) – Feedback Analysis”, IFRS Foundation, accessed on 27 July 2020, https://cdn.ifrs.org/-/media/feature/meetings/2018/november/iasb/ap12b-ias16.pdfGuidance:• The memo to your colleagues in the accounting firm should be no more than about 1,200 to 1,300 words and should use technical language that accountants could reasonably be expected to understand. The letter to the client should be about 600 to 700 words and in non-technical language and written specifically for their needs. The Course Outline suggests the assignment can be up to 1,800 words. There is no minimum word limit. Anything after 2,000 words will not be marked.• There is a lot of material in the suggested resources to answer the question. The best approach is to read the information, think about it and then summarise it in your own words. If you simply list many of the points from the suggested resources you will be heavily penalised and fail this objective of the assignment. Your colleagues at the accounting firm have the same access as you to the IFRS site so simply copying their papers is a waste or everyone’s time. A list of all the points in the IFRS papers would be 6
beyond the understanding of the client. Succinctly summarising the main issues for the readers is of value and will be rewarded.• Referencing is essential. Remember that changing a few words does not make a quote a paraphrase or “in your own words”. It is still a quote and must have quotation marks ‘ ‘ around it and an in-text reference. If you do manage to summarise or paraphrase ideas from somewhere it does not need quotation marks but it must still have an in-text reference as it is not your idea. Copying and pasting is never okay. If you are not sure how to paraphrase please see: https://lo.unisa.edu.au/mod/book/view.php?id=252144• Copying and pasting text into your assignment and then altering it gradually by replacing words, rearranging words, using the synonym function in Word to replace words etc. is not paraphrasing and any sections of assignments deemed to have been created this way will receive no marks. This is not an appropriate method of writing and suggests that the writer is not capable of writing something original for themselves. Putting your work through a translation or paraphrasing tool is considered a breach of the Academic Integrity policy and will be referred to an Academic Integrity Officer with an expected minimum outcome of zero for the assignment.• As the memo and letter are to be in your own words it is not appropriate to have quotes of more than a line, and no more than a couple of those. Lack of writing in students’ own words will be heavily penalised as you need to develop this skill. Anyone can cut and paste, but a professional can produce original work. As the markers will have read the original documents we have suggested as resources, copying from them would add no value and hence not be worth marks. What students can provide, which no-one else can, is their original writing of what they understand about the issue. That is worth marks.• Note that it is intended that assignments in this course will be checked, using text comparison software, for instances of plagiarism or collusion.• Seek help early and from appropriate sources. Asking your friends, ‘seniors’ or other students for assistance with this assignment is not appropriate. You may seek assistance from the Learnonline Student Forum, your tutor and the course coordinator.• Read the feedback rubric provided as this shows you the breakdown of the marks and any penalties that apply.• Make sure you plan well so that when you submit your assignment it is a piece of assessment on which you are very proud to have your name.7