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ACCT3011
Financial Accounting B
Group Assignment
General information: Completion of this assignment is compulsory. The assignment should be submitted as a word document in electronic form only using the ‘Turnitin’ assessment portal on Canvas. No submissions will be accepted via email. Please ensure only one submission for each group. Due date: 4pm 12 May 2022 (Thursday, Week 11). If you submit after the due date will incur a late penalty of 5% of the total marks per 24-hour period, or part thereof, late. Furthermore, any assignment submitted after the closing date of 4pm 22 May 2022, will not be marked and, therefore, result in a mark of zero. Responses will be considered on their ability to present relevant information and develop well supported arguments. Do not submit a series of dot points. Your response should be presented in an extended narrative format. T o provide students with feedback, your assignment will be graded against the assessment criteria included in Appendix 1 to this assignment. Format: 12-point font, Times New Roman, paragraphs formatted with 1.5 line spacing, and with margins of 2.5cm. This assignment must be done in ‘Word’ or other text format program. Do not use ‘Excel’ or other non-text programs to do this assignment. Your responses are required to adhere to the provided word count guidance for each question. You may also provide any bibliography/reference list and this will not be word counted. Any work above the suggested word count will not be marked. You will note that the unit of study outline specifies 1500 words in total; here we have 2 reinterpreted this into a word count guidance for each question, all using the font and spacing as per the preceding dot point. It is each group’s responsibility to ensure these requirements are complied with. Your assignment must be appropriately and properly referenced using the American Psychological Association referencing style (or APA as it is more commonly known). The University of Sydney library provides helpful guidance on using APA style referencing, You can also refer to Other Resources on the ACCT 3011 Canvas site for additional guidance. In the footer of your word document, you must show SID for each group member and include page numbers. For example, ‘123456789, 123456789, …..page 1”. Other guidance on how to submit using Turnitin is provided in the assessment folder on Canvas. The filename of your submitted assignment should also be in the format of “Your tutor name + Your tutorial time + Your group. For example, “Chuan2pmGroupA.doc”. As a student at the University, you are responsible for taking part in your education in an honest and authentic manner. It is therefore expected that you take extra care to ensure that there are no breaches of academic honesty. All assignments will be manually and electronically checked for plagiarism (copying). All sources of support for the assignment must be acknowledged. Failure to acknowledge such support may potentially breach the University’s academic honesty requirements.
Grade Descriptors: Due to the specific nature of this assignment, students are advised that generic submissions will not score high marks. The following can at best be considered as a general indication, assuming consistency in quality of component parts. High Distinction The attempted solution substantially exceeds minimal requirements, and is consistent and coherent. It excels in substantive content and demonstrates professional communication skills. It reflects consideration of your own well developed perspectives and is framed in your own words. Distinction The attempted solution substantially exceeds minimal requirements across most tasks and through effective communication demonstrates a strong understanding of the accounting issues and relevant accounting requirements. Good development of your own perspectives. Credit The attempted solution exceeds minimal requirements across most tasks, but is less well developed, less framing in your own words (e.g. dull reproduction of slabs of text from others), some errors or omissions in application. Pass A minimal standard is reached across various aspects of the task. Fail The task is not completed. The solution does not reflect an appropriate understanding of the question/assigned task. Poorly developed responses. Questions about the Assignment: Students are required to post all assignment queries to the Group Assignment Forum on Canvas. This is the required form of communication as i t provides an opportunity for all students to have access to the same information. Unit of Study teaching staff will NOT answer questions during lectures, tutorial or in consultation times.
Instructions, references and guidance for Parts A, B and C: Background to the assignment: In late 2018, Coles Group Limited (‘Coles’ hereafter, ASX: COL) became a separately listed company after the demerger from the corporate giant Wesfarmers Limited (‘Wesfarmers’, ASX: WES). Wesfarmers still holds a minority interest of 4.9% in Coles by the 2021 fiscal year end. Drawing on the annual reports released by Coles and Wesfarmers for the year ended 30 June 2021, this assignment will focus on the segment reporting disclosed in their ‘Notes to the Financial Statements’. The purpose of this assignment is to evaluate Coles’ and Wesfarmers’ segment performance disclosures and critically reflect on the accounting policies for segment reporting.
Responses will be considered on their ability to present relevant information and develop well supported arguments. Do not submit a series of dot points. Please note Part C requires you to prepare a persuasive extended essay response. Marks will be awarded for content as well as structure, and the quality of the communication. To provide students with feedback, your assignment will be graded against the assessment criteria included in Appendix I (page 10) to this assignment.
Part A (8 marks) Below are extracts from Section 1.1 of the Notes to Coles’ financial statements for the year ended 31 June 2021 on page 83 (URL details are provided under References on page 9).
Required:
a) Reflect on these recent segment disclosures, and discuss what you learn from them about the performance of the Coles Group (2 marks); b) Consider the disclosure requirements of AASB 8: Operating Segments paragraph 22 to 24 and other relevant accounting standards. Comment on what is NOT provided in these disclosure extracts, and explain how that additional information could have further assisted with your Part A (a) analysis of the performance of the Coles Group (3 marks); and c) Comment on how Coles might have justified not disclosing the additional information you allude to in Part A (b), within these recent segment disclosures (3 marks).
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Part B (6 marks) Below are extracts from the ‘Segment Information’ section in Wesfarmers financial statements for the year ended 30 June 2020, pages 132 to 133 (URL details are provided under References on page 9).
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Required: a) Compare and contrast the segment disclosures provided by Coles and Wesfarmers, comment on the strengths and limitations of each disclosure (3 marks); and b) Critically evaluate the comparability of the information provided by these two reporting entities (3 marks). Your discussion should focus on the full segment disclosure provided by each entity (i.e. full Note 1.2 in Coles annual report and full ‘Segment Information’ section in Wesfarmers annual report).
Part C (14 marks) In Australia, the first segment reporting standard was developed in 1984: AAS 16 Reporting Financial Information by Segment. The Accounting Standards Review Board (ASRB) subsequently endorsed this standard in April 1986 as ASRB 1005 Financial Reporting by Segments (later to become AASB 1005). That standard was then replaced by AASB 114 in 2004, when Australia adopted International Accounting Standards. The 1984 standard adopted ‘the industry approach’ for determining operating segments, based on ‘risk and returns’. In contrast, AASB 8 paragraph 5 now defines an operating segment as a component of an entity: (i) that engages in business activities; (ii) whose operating results are regularly reviewed by the Chief Operating Decision Maker (CODM); and (iii) for which discrete financial information is available. “Accounting standard setters have increasingly attempted to align external segment reporting disclosures to a firm's internal reporting” (Bugeja, Czernkowski, & Morgan, 2015, page 310). This so called “management approach” adopted by AASB 8, has arguably impacted the number of reported segments and extent of line-item disclosures provided in recent years by reporting entities.
Required: Develop a persuasive essay to critically reflect on the shortcomings of the earlier ‘risk and returns’ approach to defining operating segment and the flexibilities in AASB 8 that allows for variable presentation of a reporting entity’s segment disclosures.
8 In your response, discuss two (2) possible factors that could motivate how Coles and Wesfarmers construct and present segment disclosures in their financial statements in future years (apart from satisfying AASB 8 requirements). This might involve discussion around why management seek to opportunistically draw on these flexibilities in AASB 8 to affect a disclosure that reveals as little as possible, and/or presents a group’s segment information in a favourable light?
Each factor is to be linked to the arguments you developed in your Part A and Part B responses*. Furthermore, your arguments should draw on the findings of Bugeja, Czernkowski, & Morgan (2015), along with at least one (1) other relevant academic article(s) that you find#.
* Supporting examples developed from your Part A and Part B responses must explain in detail how and why it supports the possible motive. # Your references should be from papers published in peer reviewed academic journals. Not internet sources such as Wikipedia, not ACCT3011 course materials such as the Semester 1 2022 slides and tutorial materials, and not textbook chapters such as the Arthur et al. textbook.