Recent Question/Assignment

ACC5215 Corporate Accounting
Semester 1, 2015
Assignment
Due Date: Monday, 18 May 2015 Value: 15 %
Important Information
The course specification requires that your submission is your own work. You are strongly urged to complete this assignment yourself to receive clear feedback about your level of understanding of the course material. You will find information regarding plagiarism and academic misconduct, such as collusion and cheating in the course specification and on the USQ website.
The course specification also contains information about:
• Assignment late policy
• Assignment extension policy
Please ensure that any ideas or data that you provide in your answer, other than your own original thoughts are properly referenced using the Harvard referencing style. A link to the university’s Harvard referencing style page is provided here.
http://www.usq.edu.au/library/referencing/harvard-agps-referencing-guide
You might also find the following book useful:
Summers, J. & Smith, B. (2010), Communication Skills Handbook, John Wiley & Sons, Third Edition, Milton Queensland.
Please refer to the following information in relation to assignment lodgement.
Assignment Preparation and Submission
Please read the following points carefully.
• This assignment must be lodged using USQ’s Moodle for Assignment submission link on StudyDesk.
• You are required to lodge one (1) Microsoft Word file (limit 2MB), using the correct file naming protocol (see next page).
• Your submission must have a header on every page, which includes your name and student number.
• The assessment is due at 5:00 pm on Monday, 18 May 2015 (USQ time). Submissions will open on Monday, 4 May 2015.
• Please include a reference page in your assignment.
How do I name the Word file I have to lodge?
• When naming the Word file to be submitted as your assignment, the file name should use the following naming convention: first name, last name, last 4 digits of student number and course code (e.g. TeruyOmura7286acc5215.docx).
• For the submission, please read and follow “Instructions for Students: How to Submit an Assignment” in PDF file below this document in the Assignment section.
• Do not forget to press the “SUBMIT” button to complete the submission process.
Do I need to include the electronic version of the USQ cover sheet?
You do not need to include a USQ coversheet in your assignment.
Do I have to send in a hard copy?
No hard copy is required. The submission system is easy to use and reliable. You can rely on the system to submit your assignment online.
Technical problems with online submission
• Follow “Instructions for Students: How to Submit an Assignment” for the submission.
• If you need help with your online submission, please email the Course leader teruyo.omura@usq.edu.au and if necessary, a system expert may contact you to provide assistance. If you leave it until after 4pm on the due date, you might have to bear any undesirable consequences (late penalties will not be applied in genuine cases of technical problems but failure to read instructions will be no excuse). In the rare circumstance that the server is down (e.g. due to a storm), email the assessment file.
Keep your submission details
You need to keep your submission details like date and time of your submission as well as a back-up copy of your assignment file.
Extensions
No extensions will be granted after the due date and time for the assignment has passed. All requests for extension must be addressed to the Course leader teruyo.omura@usq.edu.au at least one day before the due date with supporting documentation (e.g. doctor’s certificate).
Extensions will only be granted in extenuating circumstances. Crashing of computers, too busy with other assignments, heavy workload, and such reasons are not considered extenuating circumstances. Requests for extensions due to work commitments will generally NOT be granted. You must organise your study time around these other commitments.
Marking Guide
Marks will be awarded based on the following guidelines. High quality answers should address the requirements of the questions asked comprehensively with good grammar, spelling and punctuation. For case study questions, relevant theories should be explained and applied, citing the contents of the case studies as much as possible.
Student Minimum mark per grade
Question 1 (25 marks) Mark HD A B C F Total
(1) finance lease or an operating lease, Justify 5.00 4.25 3.75 3.25 2.50 2.00
(2) Critical evaluate 10.00 8.50 7.50 6.50 5.00 4.00
(3) the conceptual framework/definitions 10.00 8.50 7.50 6.50 5.00 4.00
Subtot al Ques tion 1 /25
Question 2 (20 marks)
(1) NCI shareholders influence the decision 10.00 8.50 7.50 6.50 5.00 4.00
(2) necessary to show NCI separately? 10.00 8.50 7.50 6.50 5.00 4.00
Subtot al Ques tion 2 /20
Question 3 (15 marks)
BHP Billiton OR Qantas Airways 15.00 12.75 11.25 9.75 7.50 4.00
Subtotal Question 3 /15
Total marks /60
Percentage [total marks /4 = 15%] /15
Comments:
Assignment Feedback and results
• Feedback will be provided to students after marking is completed using the Assignment marking rubric shown.
Note:
The turnaround time for marking of assignments is at least 3 weeks. You can expect to receive your results with feedback in the week beginning 8 June 2015.
Question 1 (25 marks)

Springfield Ltd is a company involved in a diverse range of activities involving power generation, machinery retailing and agriculture.
The accounting policy note attached to the 2015 financial statements included the following under the heading ‘Leases’:
During the year the company entered into a refinancing arrangement which involved the sale of the Lily Mountain power station under a sale and leaseback arrangement. The difference between the carrying amount of the power station and its original cost has been included in profit and disclosed as a gain on sale of a non-current asset. Sales proceeds in excess of the original cost have been treated as deferred income in the statement of financial position. The amount of deferred income will be systematically amortised over the term of the lease.
The power station is a unique asset in that the licence to generate power from that station is held by Springfield Ltd and cannot be transferred. The leaseback period is for the remaining 20 years economic life of the power station and Springfield Ltd has guaranteed its expected residual value at that time of $55 000.
Requirement:
(1) Does the Springfield Ltd sale and leaseback arrangement involve a finance lease or an operating lease? Justify your choice.
(5 marks)
(2) Critically evaluate the accounting treatment adopted by Springfield Ltd with respect to the sale and leaseback agreement. Refer, where necessary, to relevant sections of AASB 117.
(10 marks)
(3) Compare the resulting deferred income account with the Conceptual Framework/Framework’s definitions of and recognition criteria for the elements of financial statements.
(10 marks)
Question 2 (20 marks)

Chapter 27 introduces accounting for equity interests in other entities, providing basic knowledge on the consolidation process, the history of the governing Australian accounting standards and an understanding of control.
The Qantas Group's main business is the transportation of customers using two complementary airline brands, Qantas and Jetstar. They also operate subsidiary businesses including other airlines and businesses in specialist markets such as Q Catering.
The airline brands operate regional, domestic and international services. The Group's broad portfolio of subsidiary businesses ranges from Qantas Freight Enterprises to Qantas Frequent Flyer.
Extract from Qantas 2012 Statement of financial position as at 30 June 2012
$m
Equity attributable to the members of Qantas 5,885
Non-controlling interests 4
Total equity 5,889
DISCUSSION POINTS
(1) The extract from the Qantas 2012 Annual Report shows that overall Qantas holds the majority shareholding of its subsidiaries with non-controlling interests (NCI) in the Qantas Group of $4 million. Explain what control, if any, the shareholders represented in the NCI could use to influence the decision making of Qantas.
(10 marks)
(2) AASB 10 defines ‘control’ and ‘subsidiary’. Given that the NCI represents only $4 million of the $5,889 million why is it necessary for Qantas to show the NCI separately?
(10 marks)
Question 3 (15 marks)
Identify 1 Australian listed company (select either BHP Billiton Limited or Qantas Airways Limited), with balance dates ending on 30th June 2014.
Please use the format of the table for answering each question.
Identify Australian listed companies BHP Billiton Limited OR Qantas Airways Limited
1. GICS Industry** (1 mark)
Board composition (No 2 - 5):
2. Number of directors (&Gender of directors) (2 marks)
3. Number of board meetings (1 mark)
4. Qualification of directors (2 mark) (expand if necessary)
5. Experience of directors (Whether they are on other boards) (2 mark) (expend if necessary)
6. Number of Australian and foreign subsidiaries (1 mark)
7. Number of Australian and foreign associates (1 mark)
8. Borrowing costs and estimated interest for company
(2 marks)
9. Number of employees (1 mark)
10. Method of reporting comprehensive income (2 mark)
URL to access the annual report and GICS Industry code
1. BHP Billion Limited http://www.bhpbilliton.com/home/investors/reports/Documents/2014/BHPBillitonAnnualRep ort2014.pdf
2. Qantas Airways limited
http://www.qantas.com.au/infodetail/about/investors/2014AnnualReport.pdf
GICS Industry code from www.asx.com.au/asx/research/listed Companies.do
END OF Assignment

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