S2 2019 ACCG224 Page 1 ACCG224: Financial Accounting and Reporting Session 2, 2019 Individual Assignment Accounting Policies and Estimates on Property, Plant and Equipment Part I - Research Based...

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S2 2019 ACCG224 Page 1 ACCG224: Financial Accounting and Reporting Session 2, 2019 Individual Assignment Accounting Policies and Estimates on Property, Plant and Equipment Part I - Research Based Report (15%) Due: Tuesday 1/10/2019, 5pm Word limit: 1,200 words Part II – Video Oral Presentation (5%) Due: Tuesday 8/10/2019, 5pm Time limit: 4 minutes S2 2019 ACCG224 Page 2 Part I – Research based report (15%) “In a perfect world, investors, board members, and executives would have full confidence in companies’ financial statements. They could rely on the numbers to make intelligent estimates of the magnitude, timing, and uncertainty of future cash flows and to judge whether the resulting estimate of value was fairly represented in the current stock price. And they could make wise decisions about whether to invest in or acquire a company, thus promoting the efficient allocation of capital. Unfortunately, that’s not what happens in the real world, for several reasons. First, corporate financial statements necessarily depend on estimates and judgment calls that can be widely off the mark, even when made in good faith…..” (Sherman and Young, 2106, p.1). The above clearly shows how crucial it is for accountants to apply their professional judgment in arriving to the most reasonable/appropriate accounting choices/estimates which can be quite a challenging process. There is not necessarily one correct answer in most cases and therefore accountants need to be vigilant while dealing with accounting information. As a student intern and future accountant, you have recently joined the accounting department of an ASX listed company. As a future accountant, and to demonstrate your understanding of the application of professional judgment, you have been asked to look into the company’s annual report, undertake required research on the company’s choices relating to the accounting estimates and policies on property, plant and equipment (PPE), and prepare a report for presentation to other accounting team members and the audit committee. To complete this assignment, you will need to select a suitable company yourself that meets the following criteria: • The company must be a constituent of the S&P/ASX 300 index (www.asx300list.com); • The company must publish audited annual financial reports in English, fully complying with IFRS or AASB standards and • The company must have a 30 June year end. Your report must address each of the following: a) Provide a summary of the criteria for selecting and changing accounting policies according to AASB 108 (you may refer to Paragraphs 7-14) and discuss how professional judgment can impact accounting policies and estimates. (10 marks) b) Identify and provide a detailed explanation of the accounting policies and the estimates your company uses to measure PPE for the year ended 30 June 2019. (10 marks) c) Based on your findings in parts a and b, critically evaluate whether the professional judgment applied in accounting estimates and policies of PPE has been reasonable/appropriate. You may refer to relevant information sources to answer the above question (e.g. compare to the norms in the industry). (15 marks) d) Based on your findings in part c, recommend actions (if any) for improvement in the accounting estimates and policies in PPE for your company. (5 marks) http://www.asx300list.com/ S2 2019 ACCG224 Page 3 Assessment of report The research-based report represents 15% of your total mark for ACCG224 and is compulsory. Your assignment will be marked out of 60 as shown in the Report Marking Rubric on page 7 of this document and will then be converted to a mark out of 15 percent. Report submission instructions Where to submit The written report must be submitted in electronic form using Turnitin (through iLearn via the ‘Assessment Tasks’ folder). Detailed submission instructions are provided on iLearn. Please ensure that you are familiar with these instructions and submit before the deadline in case of technical issues. A hardcopy submission is not required. When to submit Due: Tuesday 1/10/2019, 5pm No extensions will be granted. There will be a deduction of 10% of the total available marks made from the total awarded mark for each 24 hour period or part thereof that the submission is late (for example, 25 hours late in submission – 20% penalty). This penalty does not apply for cases in which an application for disruption of studies is made and approved. How to submit The report can be submitted either in a PDF or word format. The filename of your report must be as follows: ACCG224_XXXXXXXX (where the crosses represent your eight digit SID) S2 2019 ACCG224 Page 4 Report Format Before you start writing your report, it is recommended that you undertake the following (both of these can be accessed through the ‘Assessment Task’ folder on iLearn): 1. Watch the e-lecture on business report writing 2. Take a look at the sample Business Research Report provided on iLearn. Structure The report must contain the following (in this order): • Report cover page (You can design your own cover page) • Table of contents • Executive summary • Introduction • Body • Conclusion • Reference list • Appendix You should include relevant parts of the annual reports that you have used and referred to in your report. Do NOT attach entire annual reports. You can include the relevant parts of annual reports as screenshots rather than copying and pasting content, since it can impact the TurnitIn similarity percentage Length Total word count limit = 1,200 words. Your word count must be included on your cover page. Included in word count Excluded from word count • Introduction • Body • Conclusion • Report cover page • Table of contents • Executive summary • Reference list • Appendix Penalties for exceeding the word limit are as follows: Word count Penalty • 1,201 – 1,319 words • 1,320 – 1,439 words • 1,440 or more words • No penalty • 10% of total marks • 20% of total marks Style The report must be presented as follows: Font: Times New Roman 12 point Spacing: 1.5 times line spacing Margins: not less than 2.5 cm Footer Each page must have a footer containing the following: ACCG224 S2 2019 Your SID Page number Referencing In text referencing is required for all sources used and a complete list of references must be provided using the Harvard Referencing System. A copy of the Harvard Referencing System is available under the ‘Assessment Task’ folder on iLearn. Please note that as this is a research assignment it is not appropriate to reference to textbooks or lecture slides. Plagiarism All assignments will be manually and electronically checked for plagiarism and it is extremely important that you are familiar with the policy on Academic Honesty. S2 2019 ACCG224 Page 5 A link to the policy is available in the ‘Assessment Task’ folder on iLearn. Part II – Video Oral Presentation (5%) The accountant was impressed by your report and has asked you to prepare a video presentation to be played to the Audit Committee at the next meeting. Your video presentation should: a) Explain the criteria for selecting and changing accounting policies according to AASB 108. b) Identify the accounting policies and the estimates your company uses to measure Property, Plant and Equipment (PPE) for the year ended 30 June 2019. c) Discuss if the professional judgment applied in accounting estimates and policies of PPE has been reasonable/appropriate and recommend actions (if any) for improvement. Assessment of video The research based report represents 5% of your total mark for ACCG224 and is compulsory. Your assignment will be marked out of 40 as shown in the Presentation Marking Rubric on page 8 of this document and will then be converted to a mark out of 5. Video format Before you start recording your video it is recommended that you view the two YouTube videos by Vlog Brothers and Idea Channel. Both of these can be accessed through the ‘Assessment Task’ folder on iLearn. Length Time limit = 4 minutes Penalties for exceeding the time limit are as follows: Time Penalty • Up to 4:29 • 4:30-5:29 • 5:30 or more • No penalty • 10% of total marks • 20% of total marks Slides The use of slides (eg Powerpoint/Prezi) is not mandatory as you will not be marked on your slides, but on your communication skills. If you do wish to use slides please use a screen capture rather than a projected image. Physical presence Students must actually appear in their video – you must be visible as well as able to be heard. Audibility It is your responsibility to ensure that we can hear your presentation clearly. If we can’t hear it then we can’t mark it! If you are recording using screen capture technology consider using speaker and headphones. Technology You can record your video using one of the following: • Your mobile device or tablet – it editing is required iMovie can be used. • Screen capture technology such as Windows 10 Screen Recorder, Cyberlink or others These are suggestions only and you are free to use another method. S2 2019 ACCG224 Page 6 Video submission instructions Where to submit The video must be submitted in electronic form using the Oral Presentation Submission Guide link (through iLearn via the ‘Assessment Tasks’ folder). Detailed submission instructions are provided on iLearn. Please ensure that you are familiar with these instructions and submit before the deadline in case of technical issues. A hardcopy submission is not required.
Answered Same DaySep 29, 2021ACCG224Macquaire University

Answer To: S2 2019 ACCG224 Page 1 ACCG224: Financial Accounting and Reporting Session 2, 2019 Individual...

Sameeksha answered on Oct 01 2021
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ACCOUNTING POLICIES AND ESTIMATES ON PROPERTY, PLANT AND EQUIPMENT
Executive Summary
Accounting Policies and Estimates play an important role while preparing and reporting the financial statements and other events to concerned stakeholders be it internal or external. It is important that accountants mai
ntain consistency while applying the accounting standards however there is always a scope of applying professional judgment so that the most appropriate accounting estimates or choices can be attained. However it is not that easy especially in case of property plant and equipment (PPE) as there are many important factors like residual value, usefulness of asset, deprecation etc which may give different valuations on different accounting policies.
To understand these factors in accounting standards in the Australian background, Ridley Corporation is selected. This is registered on ASX 300 index and it year closing falls of 30th June. For a detailed analysis of PPE, their 2019 year closing audited financial reports are analysed.
Table of Contents
Executive Summary    2
Table of Contents    3
Introduction    4
a) Accounting Policies for Property, Plant and Equipment (PPE) as per AASB 108    4
b) Accounting Policies and the estimates to measure PPE    6
c) Critical Evaluation of Accounting Estimates and Policies of PPE    7
d) Improvement in the Accounting Estimates and Policies in PPE    8
Conclusion    8
References    9
Introduction
Accounting policies are those specific policies and regulations which guide a company to prepare and report its financial statements. It covers the methods of accounting, policies, procedures etc related to recording of the financial activities which are used by various stakeholders.
Accounting Standard (AAS) 116 for Property, Plant and Equipment under section 334 of the Corporations Act 2001 was formed on 7 August 2015 under the The Australian Accounting Standards Board (AASB).
a) Accounting Policies for Property, Plant and Equipment (PPE) as per AASB 108
With the purpose to distinguish information about an entity’s investment in its property, plant and equipment and the changes in such investment, this accounting standard’s objective is to set down the accounting treatment for property, plant and equipment. The main concern while accounting for PPE is associated with identification    of their respective carrying amounts and the depreciation along with impairment losses associated with the same .
The AASB set out the guidelines for recording the financial activities and transactions providing appropriate and consistent information related to activities and events of the business to the concerned stakeholders. Further as per AASB, it is not always possible to apply such policies however it is important to understand that considering activity immaterial and leaving it unattended to attain a particular financial reporting and presentation is not justified .
Further in case if there is no clarity regarding application of any AAS that related with a particular transaction or event, in that...
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