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Complete the 2 questions given below. A total of 50 marksare allocated tothe questions below, which will then be converted to a mark out of 15%. All workings, where appropriate, must be shown to...

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Complete the 2 questions given below. A total of 50 marksare allocated tothe questions below, which will then be converted to a mark out of 15%.

All workings, where appropriate, must be shown to substantiate your answers.

Question 1 [35 marks]

The regulatory environment and financial reporting

You are employed in a large accounting firm which specialises in preparing general purpose financial reports for large companies that are listed on the Australian Securities Exchange (ASX). As the training manager, one of your key tasks is to prepare a regular newsletter for staff involved in the preparation of the above financial reports. The purpose of the newsletter is to keep staff updated on the latest financial reporting news, alerting staff of changes and developments that may impact their work, and provide enough information to staff to satisfy the following:

  • For staff to understand the nature of the news / change / development and its potential impact (so staff can decide whether they need to investigate further given the nature of their own work);
  • Provide directions to staff of where they can access further information on the news / change / development if they wish to (including website links where appropriate).

Required:

Prepare a 2 page newsletter that identifies and summarises changes / developments and news in the financial reporting environment for the period from1 December 2017 to 31 March 2018.

Detailed guidelines for completing this task:

1. Identification of changes and developments

This will involve extensive research on a number of sources over the required period. You will need to identify and consider a range of developments/changes such as:

  • Technical issues: for example the issue of new accounting standards, amendments to accounting standards, updates on AASB or IASB projects in progress, outcomes of AASB or IASB meetings, amendments to ASX listing rules.
  • Regulation and monitoring of financial reporting: for example ASIC reviews on financial reporting.
  • Political influences or other potential developments. 'Political' does not only mean action from politicians – it would also include lobbying/actions by other groups to promote their own interests – for example there may be articles about companies, or particular interest groups such as Group of 100, saying that if certain accounting standards are introduced this will disadvantage or have a negative impact.

You will need to consider both local (Australian) and international sources and developments.

The restriction of a 2 page newsletter means that you need to use your own judgment as to whether to include information about specific news items and changes / developments, and how much information to include. It is not intended that you provide complete details of changes / developments (although you may consider in particular cases that more detail is needed).

Given the target audience, it would be assumed that they have a working knowledge of common terms and abbreviations (such as AASB, IASB), so abbreviations may be used.

What not to consider?

You need to take care that the news / changes / developments included in the newsletter are relevant to the objective, in particular that they relate directly to the preparation of general purpose financial reports for large companies listed on the ASX. The newsletter should not consider areas only indirectly related to the preparation of financial reports such as (this is not an exhaustive list):

  • Fraud
  • Auditing
  • Taxation
  • Other disclosures by listed companies such as: industry disclosures required by peak organisations, and voluntary disclosures in the area of corporate social responsibility.

2. Potential sources

Given the scope of the potential influences on financial reporting, you will need to research a range of sources. Below is a list of sources that may be of interest. Note that this list is not exhaustive, students should search for sources outside of these. Students should not rely on any one type of source, but a range of sources from each category, i.e. do not just look at websites, also check journals, newspapers etc. Examples of possible information sources include:

(a) Websites such as those of:

  • Australian Accounting Standards Board
  • Financial Reporting Council
  • Australian Securities and Investment Commission
  • Australian Securities Exchange
  • International Federation of Accountants
  • Chartered Accountants Australia and New Zealand
  • CPA Australia
  • International Accounting Standards Board
  • Websites of large accounting firms

(b) Professional publications:

  • In the Black (CPA)
  • Acuity (CAANZ)

(c) Newspapers/journals

3. Format and presentation

The following are to be observed for your newsletter preparation.

  • The top of the newsletter must include the title (you need to decide what to call your newsletter) and details of the period the newsletter is considering.
  • The newsletter should not read as one continuous 'essay'. It must include headings and sub-headings that assist in identifying the nature of news / changes / developments and help to guide the reader, and also enable the reader to distinguish between items of interest and the relative importance of changes.
  • You must refer the reader to specific sources (including website links where appropriate) so that they are able to obtain more detailed information of the news / change / development. If you include direct quotations in your newsletter, you need to include in-text citations using the APA referencing format.
  • The newsletter must be printed in minimum font set at XXXXXXXXXXpoints (you may wish to use different formatting (such as larger fonts) for headings etc. Apart from minimum font size, there are no specific requirements in relation to line spacing, margins etc. However, you should note that simply reducing line spacings or margins to 'fit more in' may impact on the presentation and effectiveness of the newsletter.
  • There is no specific 'word limit'. The newsletter must be no longer than 2 pages. In cases where the newsletter exceeds the XXXXXXXXXXpage limit, only the first 2 pages will be marked.
  • Do not attach actual articles/printouts of web sources etc to your assessment. You are only required to include details of these in the bibliography (see section 4 below).

Don't be afraid to be creative. The effectiveness of a newsletter is impacted by how interesting the readers find it.

Question 2 [15 marks]

Financial statement presentation

You are the senior financial accountant at Blake Ltd. One of the new trainee accountants has prepared the following statement of profit or loss and other comprehensive income and statement financial position from the trial balance, after its first year of operations:

Additional information:

  • Blake Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and presents an analysis of expenses by function on the statement.
  • In relation to the statement of financial position, where AASB 101 requires entities to disclose further sub-classifications of the minimum line items on the face of the statement or in the notes, the directors of Blake Ltd want to report only the minimum line items on the face of the statement, and leave the sub-classifications to be disclosed in the notes.

Required:

Review the financial statements prepared by the trainee accountant. Discuss what corrections / changes need to be made to the financial statements, to ensure that they comply with the requirements of AASB 101. Provide references to relevant paragraphs in the accounting standards where appropriate to support your answers. Note: You are not required to discuss any note disclosures that are needed, or prepare revised financial statements.

Answered Same Day Apr 04, 2020 ACC514 Charles Sturt University

Solution

Abr Writing answered on Apr 06 2020
136 Votes
3
“Financial reporting”
Financial reporting
Answer 1
(
“Financial reporting”
) (
Volume 1, Issue 1
)
(
INTERNATIONAL FINANCIAL REPORTING STANDARD 9
 
)
(
The international financial reporting standard 9 introduces several requirements for measurement or classification of the financial assets; the debt instruments which meets both the cash flow characteristics and the business model test will be measured at the amortized cost and the equity instrument investment will further be designated as the fair value through the other comprehensive incomes with recognizing only the dividend in the profits and loss.
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interim financial reports under the interim financial reporting standard, few disclosures are required such as the nature and effect of change in the accounting policy and computation method.
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pronouncement has specific transitional provisions. When the disclosures are associated with the accounting policies changes which results from the initial applications of the revised and new pronouncements

are less in
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The changes in the accounting estimates, accounting policies and e
ors contains the general requirement regarding the accounting policies changes but this case does not apply to the extent at which the individual
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Changes and developments in the international accounting standard
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international accounting standard 1 and the Australian accounting standard “presentation of financial statement”, the companies are required to prepare the third statement regarding the company’s financial situation as on the starting of the previous period as well as the minimum comparative financial statement which is prepared in the number of situations, including if the organization apply an accounting policy retrospectively and its application will further have material impact in the financial statement information at the starting for preceding period.
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International Financial reporting standards
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e updated in order to reflect the new measurement, recognitions and other requirement. The standard for the employees
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The new and revised accounting and financial reporting requirements are updated by the boards for the period ending 31
st
 march 2018.
These pronouncements can have substantial effect on the financial reports of the company including the updates to the accounting policy, disclosure regarding the changes in the accounting policies, impact of the transitional positions, earning per share, and third statement of the financial information of entity. The substance and the terminology of the accounting policies which are disclosed...
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