Exam - BUACC3706 - Sem...

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Exam - BUACC3706 - Sem XXXXXXXXXXpages!    BUACC3706:    Financial    Accoun&ngAssessment    Task    3    -    Take    Home    Examina&on    -    Essays    x    3        Contribu&on    to    overall    assessment:        60%__________________________________________________________________________________    Details: This examination material will be released to students at the beginning of the assessment period. Your answers to these examination questions are to be submitted via the Moodle Drop-Box y no later than 5 pm Friday 19 June 2020.   To be completed: You are to select and address three (3) of the short answer essay questions from the six (6) questions below. Note: Only three (3) questions should be answered. If you complete more than three (3) questions only the first three questions (in chronological order) will be graded. Length: Each short answer essay question shall be between 600 to 800 words in length. Essays exceeding this word count will only be graded to the length specified. This word count does not include the reference list or the front page identifier. No abstract/executive summary is required in this instance.  Referencing: A minimum of one (1) reference per 100 words is expected within each essay.  Referencing style: APA. Plagiarism: All essays to be submitted via a Moodle drop box. Federation University, as with all universities, regard plagiarism as a significant academic misdemeanour and as such student essays so identified shall be subject to academic penalty.  Note: All questions within this examination are based on the academic material addressed throughout the semester (per the the Course Description) including Accounting Standards, Moodle Shell articles, lecture slides and lectures, tutorial questions, textbook and associated references. Additional information:  • Refer to the Federation University guide for essay writing• Use 12 point Times font with 2 cm margins on your page and 1.5 line spacing.• Remember to reference your writing and include a reference list at the end of the essay.Evidence of the use of references is expected throughout the essay.• It is the student responsibility to ensure essays are lodged in a timely manner. Nonlodgement of an essay will receive a nil grade.• Each essay is worth 20% of the overall grade (total 3 x 20% = 60%).• Marking Guide as attached.Select and address three (3) of the following questions: 1. Compare and contrast the presentation requirements of the Conceptual Framework foFinancial Reporting and of AASB132 - Financial Instruments: Presentation in relation tosuch instruments as convertible notes, particularly when they concern the probability ofconversion. Are you more inclined to agree with the requirements of AASB132 or thesuggestions provided by the conceptual framework? Justify and support youperspective. (Adapted from Deegan, C., Financial Accounting, 2016).2. What are the major issues addressed by accountants when dealing with internationalfinancial transactions? How and why do accountants mitigate risk in such instances?3. The article entitled ‘One third of large Australian Companies pay no tax, ATO DataShows’ (ABC, 14 December 2018, Topic 3)  states ‘About one third of large companieshave failed to pay tax even though they made a gross profit … but the Tax Office saysmost have good reasons…’. In terms of the Code of Ethics for Professional Standardswhat issues may arise in this type of situation for the Professional Accountant?4. When IFRS15/AASB15 Revenue from contracts with customers was released, one ofthe large international accounting firms issued a short document entitled IFRS Industryissues: Construction and Real Estate. In the document the following was stated: ‘Theadoption of IFRS15 may lead to significant changes in the pattern of revenue and profitecognition. Careful consideration and planning will be needed for a range of issues,including the effect on compliance with bank covenants and performance basedcompensation.’ Why do you consider this advice was given? Do you agree with thisadvice? Why or why not? (Adapted from Deegan, C., Financial Accounting, 2016).5. Going forward, can you envisage a single universally accepted theory of accounting?Why or why not? Justify and support your response.6. If a company adopted a particular accounting policy that the Australian Securities andInvestment Commission (ASIC) considered to be questionable, in principle ASIC mightconsider taking legal action against the Company Directors for failing to produce trueand fair statements. However in your opinion why may it be difficult for ASIC to prove incourt that the company’s financial statements were not true and fair. What other actionmight ASIC take in this instance? (Adapted from Deegan, C., Financial Accounting,2016)Marking Guide: for each essay BUACC3706 Marking Scheme Names: Student Name and ID: Bases    of    assessment Marks    PossiblePart A - Content Amount of relevant information addressing the topic. Credible sources. Position or viewpoint. Focus and logic of argument. Support for position Evidence and examples. Accuracy.              /    70Part B: Structure Structure/organisation of the essay. Referencing  Linking of material throughout essay Concluding paragraph. Grammar, spelling, punctuation Line spacing Page numbering             /    30Total    marks                 /    100Total    out    of    60%

Harshit · Accepted Answer

ACCOUNTING
QUESTION 4
The Australian Accounting Standard board has taken out a new AASB 15: Revenue from contracts with customers. The treatment is same for all contracts except a few cases, for example where considerations vary, contracts provide customers with warranties etc. The various industries which are affected by this AASB15 are manufacturing, construction, real estate, software, etc.  Also, there should be certainty regarding its consideration. Under step 2, the performance obligations i.e. whether related to single goods/services or a group should be clearly identified based on certain conditions. If discount is provided in such type of contracts, it is allocated proportionately across all the performance obligations. The persons having bank covenants and/or compensation tied to revenues are most affected in terms to economic impact.
In this AASB, a five step model for recognition of revenue is followed:
· Identifying the contracts with the customers.
An agreement with customer is to be considered as customer contract only if-
· It is easy to identify each party’s right in relation to goods or services.
· The contract has some contractual agreement
· There is certainty regarding the collection of consideration.
· Identifying the distinct performance obligations.
After determining contracts, the next step is to identify the terms of contracts taking into consideration any promises made in regards to business practices. Under this performance obligations in regards to distinct goods/services are to identified or a series of goods or services are to identified that follow same process of transfer and are same.
· Determine the transaction price
The transaction price should include non-consideration, the impact of discounts, coupons etc., any financing components for deferred payments.
· Allocate the transaction price to performance obligations
Allocation should be done in such a way that it reflects the true prices of the goods or services.
· Recognize revenue when or as the performance obligations are satisfied.
There will be several implications of the steps stated above. Under the step 1, identifying the contracts with customers, the enterprise has to look into both present and past practices to identify which contracts are related to customers. It can be both oral and written. Customer contracts are those contracts where the parties are identifiable and risk and rewards measured. Also, there should be certainty regarding its consideration. Under step 2, the performance obligations i.e. whether related to single goods/services or a group should be clearly identified based on certain conditions. Under this performance obligations in regards to distinct goods/services are to identified or a series of goods or services are to identified that follow same process of transfer and are same. After that a standalone price is to be determined for such performance obligations based on certain units of measurement. Under step 3, the process of determining the transaction price for performance obligation is to be followed. This AASB has not clearly specified the transaction price in case there are various elements in a contract. In such cases, the main part is allocated the fair price and the remaining is allocated to residual items. If discount is provided in such type of contracts, it is allocated proportionately across all the performance obligations. In case, there has been a modification in the contract, the contract has to be reassessed to determine whether the same is to be treated as separate contract or to be included in existing contract. Under this performance obligations in regards to distinct goods/services are to identified or a series of goods or services are to identified that follow same process of transfer and are same.
QUESTION 5
SINGLE UNIVERSALLY ACCEPTED THEORY OF ACCOUNTING
Accounting theory means a certain set of principles and policies that are to be applied by companies in their accounting. Universal accounting will mean that a single accounting set of policies and rules that are accepted globally. Different countries have different set of accounting policies and principles based on the conditions on the economy of that country. As globalization is at its peak today where every country is involved in business with other countries, the need for a single accounting theory has become important. There are few accounting standards which are used my many countries but there is no single policy that is used by all the countries collectively. 
The International Financial Reporting Standards (IFRS) as established by the International Accounting Standards Board (IASB) are the most used general accounting policy across the world.

Exam - BUACC3706 - Sem XXXXXXXXXXpages ! BUACC3706: Financial Accoun&ng Assessment Task 3 - Take Home Examina&on - Essays x 3 Contribu&on to overall assessment: 60%...

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