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ESSAY ASSIGNMENT GUIDE
Introduction / Learning objectives: The objective of this task is to gain familiarity with, and experience in, the use of financial statements. You will be assigned a pair of Australian Stock Exchange (ASX) listed companies as the case for this assignment. As this is an individual assignment, each student will receive a different pair of companies. The aim is to explore the accounting policies applied by one or both of the companies in the preparation of their financial statements and identify an instance you find particularly interesting. Examples of accounting policies include those relating to:
l Revenue recognition l PP&E valuation: cost/impairment or market value model l Depreciation l Valuation of intangible assets l If your company is in the mining industry, then the application of the AASB 6 Exploration & Evaluation of Mineral Resources accounting standard l If your company is in the agricultural sector, then the application of the AASB 141 Agriculture accounting standard l Etc.
The reason you find something interesting is personal, i.e., it does not matter no-one else finds it interesting, it is enough that you do! After reflecting upon aspects of the financial statements, some reasons why you might find an instance of the use of an accounting policy particularly interesting are:
l You are curious about the apparent consistency/inconsistency of the accounting policy with the new Conceptual Framework (e.g., in relation to definition and recognition criteria of assets, income, etc.). l You query the relevance or reliability of the information that results from the application of the policy l you are interested that the companies chose different policies and wonder about the effect of the difference on the comparability of the statements, or perceived quality of the company’s reported earnings l you discovered something that surprised you, or contradicted something you believed.
Requirements: 1. State the name(s) of the company (or companies) and briefly describe the nature of their business; 2. State the accounting policy you find interesting in the context of the company/companies; 3. Paste a screenshot(s) from the Notes to the Accounts that describes the accounting policy. Make sure the screen shot(s) contains the details that relate to why you find the application of the policy interesting. 4. interpret the accounting policy and explain the meaning of it in your own words; 5. explain what you think is interesting about the application of the policy in the context of your company/companies. Word limit: Note l Make sure you do not waste words saying things that are not required! l A good assignment is one that constitutes a well-informed response and communicates it succinctly. For example, a 500 word response may score a better mark than a wordy and incoherent 900 word response. Thus, the following information is a guide; it is not prescriptive: l The word count required to respond to Requirements 1, 2 & 3 is very small. Words contained within screenshots are not counted. Stating company and accounting policy names require few words. The nature of the company can be summarized within a sentence of two. l Requirement 4: approx. 200 words l Requirement 5: approx. 400 words
Marking: Your mark will be determined by l 20%: Compliance with requirements 1, 2 and 3 l 30%: The quality of your interpretation of the accounting policy (Requirement 4) l 50%: How well you communicate that which you find interesting about the use of the accounting policy in the context of your assigned company/companies (Requirement 5). Submission Requirements: l The format of the assignment comprises simply a response to each of five requirements. Thus, the assignment is not a report: thus Introductions, Executive Overviews and Tables of Contents are NOT wanted. l In the first instance, your assignment will be processed by Turnitin, a system that measures the similarity of your work to other students’ and to sources of information available on the internet. Since your assignment concerns a unique company or pair of companies, it is expected that Turnitin will measure a low level of similarity. l However, if this is not the case, you must make your own judgement whether the level of similarity is acceptable (refer to academic integrity guidelines) by inspecting the sections highlighted by Turnitin as having similarity with other sources. You may then edit and resubmit it (provided the deadline for submission has not passed). Turnitin can again be used to check the level of similarity of your updated work.
Notes and tips: l You do not need to refer to both companies. A second company was provided only as a potential opportunity to find something interesting about the first. l The description of the accounting policy you find interesting may be found in the Statement of Key Accounting Policies section of the Notes to the Accounts (note: different headings may be used for this section). However, it is more likely you will find the detail in a note that is cross-referenced from an item in one of the financial statements. For example, a reference number that appears alongside the revenue item in the Income Statement will refer to a detailed note in one of the later pages.