• You are required to prepare a business letter to answer all of the following questions.
• You are also required to prepare a short video presentation (3 to 5 mins) summarising the key issues you have addressed in your letter.
Assume that you are a team of graduate accountants working for Hitech Group Ltd, an independent consulting & accounting firm Situated at 111 Avenue, Melbourne, and VIC 3000. The Manager of your firm, Ms. Araneda Jackson has asked you to draft a letter in response to an email received from Mr. Jason Alba, the General Manager of Qantas Airway Ltd, raising accounting issues – see the copy of the email on the next page.
The maximum length for the body of the letter is 1,500 words. You should address all the technical issues/discussion in the letter, followed by a Reference List.
• Part A: Technical component 10% - This mark covers the technical content of your advice and the explanation on each of the issues, the calculations, and the sources used.
• Part B: Communication Skills – Letter Writing 5% - This mark covers the generic skills of Letter writing; layout, clear meaning, structure and organisation, appropriate tone and grammar, spelling, and punctuation, etc. throughout the whole assignment.
• Part C: Communication Skills – Video Presentation 5% - You have to prepare a 3-5 minute video presentation that will keep the audience engaged; the presentation should be well-rehearsed and supplementary material, such as slides and visual aids must be of a professional standard.
Re: Accounting Issues: Year Ending 30 June 2021
From: Jason Alba (J.Alba@Qantas.com.au)
Sent: 20 August 2020
To: Araneda Jackson (A.Jackson@Hgroup.com.au)
Thank you for your phone call this morning, as agreed I am emailing you regarding the accounting issues we briefly discussed. By the way to assist the Management team in our decision-making process could you please make sure you reference any relevant sources relating to your advice, for example, AASBs, Corporations Act, and relevant websites?
Here is the background to our problem - Qantas Airways Limited is the flag carrier of Australia and its largest airline by fleet size. Qantas Airways Ltd leases Aircraft from Boeing and Airbus for 20 years at a time. The lease agreement can be cancelled, but a significant penalty will be incurred by Qantas Ltd. The lease payments required 20 payments of equal value at the end of every year up to the twentieth year.
On 20 August 2020, Qantas announced a $2 billion loss, with the coronavirus pandemic slashing its revenue by 21% for the year ended 30 June 2020. This result included a massive $1.4 billion write-down in the value of assets such as its Airbus 380 aircraft fleet.
In the media release announcing the loss, Qantas CEO Alan Joyce was quoted: “COVID will continue to have a huge impact on our business and we're expecting a significant underlying loss in FY [financial year] 21. Yet he remained optimistic about the longer-term prospects for the airline as the pandemic subsides’’, (Qantas Group 2020).
The General Manager of Qantas Airways Ltd is aware of the required disclosures under AASB136 ($1.4 billion write-downs in the value of assets) and therefore asked you to advise him with a summary of the other relevant accounting standards to be applied under the financial reporting framework.
Identify the relevant Australian accounting standards and explain the impact of COVID on Qantas Airways financial reporting for Financial Year 21?
Please respond by letter (not email) as I would like to present this to the Board. I look forward to hearing from you shortly.
General Manager, Qantas Airways Ltd
Level 111, 222 King Street,
Sydney NSW 2000
Any sources that you use need to be acknowledged in order to avoid plagiarism
Sources of information must be cited both in the body of the text (in-text referencing) and the end of the assignment (reference list). Failure to do so will result in penalties. Remember that when referencing an Annual Report, it is a corporate document that does not have a particular author but it will still require referencing any time you use information from it. Any other documents or books or other references you use will also require referencing.