BAC205 Corporate Reporting
Assessment – Assessment 2 – 25% weightage
Semester 1 2021
Submission: Using the Turnitin link on Moodle
Due Date: Week 9, 9th May 2021 at 5 pm
Word limit: Maximum 1,400 words
Students are to answer all of the following questions
Question 1
8 Marks
Management of Snapper Ltd., an IT service provider company, elected not to measure their PPE at fair
value, but preferred to use the cost model. In 2021, Snapper Ltd. acquired a block of land at a cost of $1
million. In 2022 the recoverable amount was determined at $900,000. In 2023 the company adopted fairvalue model. The land was considered to have a fair value of $1,020,000.
Required:
a) Explain some of the effects the decision not to revalue PPE might have on the Snapper Ltd’s financial
statements.
(2 Marks)
b) Discuss two (2) motivations that directors might have not to revalue the PPE.
(2 Marks)
c) Summarise any affect that the above decision to not revalue PPE would have on the wealth of the
shareholders.
(1 Mark)
d) Provide the accounting journal entries to account for the purchase of land in 2021 and to account for
the change in the value of this land in 2022 and 2023.
(3 Marks)
Questions 2
5 Marks
Crescent Ltd conducted research and development of a COVID vaccine in Melbourne. Following are some of
the costs at this centre:
i.
Medical senior consultant’s fees paid for the research phase and development phase of the project
(50% each).
ii.
Depreciation of laboratory equipment used during the development of Covid vaccine.
iii.
Salary of administration staff at the centre.
iv.
Chemicals used in the research phase and development phase of this vaccine.
Required:
a) In reference to AASB 138, explain why research expenditures and expenditures on internally generated
assets such as brands, mastheads and publishing titles are not capitalised regardless of whether they are
likely to generate future economic benefits.
(1 Marks)
b) Categories above mentioned costs (i-iv) in research, development or other categories
(4 Marks)
Assessment 2
BAC205 Corporate Reporting
2021 Semester 1
Question 3
6 Marks
Big Boom Ltd acquires Little Boom Ltd for a cash consideration of $1.2m on 30 June 2022. All assets of Little
Boom Ltd. presented on 30 June 2022 are fairly valued. At 30 June 2022 Little B Ltd. had Patent (fair value
250,000) that was internally developed identifiable intangible assets.
Following is the statement of financial positions of both companies:
Big Boom Ltd
Little Boom Ltd
20,000
10,000
300,000
110,000
Plant
1,400,000
1,000,000
Land
400,000
200,000
1,200,000
-
3,320,000
1,320,000
120,000
60,000
800,000
300,000
2,000,000
400,000
400,000
560,000
Current assets
Cash
Accounts receivable
Non-current assets
Investment in Little Boom Ltd
Current liabilities
Accounts payable
Non-current liabilities
Loans
Shareholders’ equity
Share capital
Retained earnings
3,320,000
1,320,000
Required:
a) Provide the consolidated statement of financial position for Big Boom Ltd and Little Boom Ltd as at 30
June 2022.
(4 Marks)
b) Provide the consolidation adjustment journal entry to eliminate the investment in Little Boom Ltd
(2 Marks)
Assessment 2
BAC205 Corporate Reporting
2021 Semester 1
Question 4
Prepare a one-page Infographic demonstrating following information:
4 Marks
a)
Compare the new accounting standard on leasing, AASB 16, with the former accounting standard AASB
117
(2 Marks)
b) Evaluate the impact of AASB 16 from the perspective of the lessee and management
(2 Marks)
Some tips:
•
•
•
•
•
A catchy headline – try to think of one that gets attention, makes the audience curious and gives a clear
idea of what the infographic is about
Ensure the Infographic is logically structured – the information you include should flow like a good
story, use different colours and images sensibly – creativity will be assessed!
Ensure your Infographic is visually striking, includes minimal text, is easily understood and enjoyable
(do not overcrowd the page!)
Referencing: your Infographic is still an assessment task! You are making a case by presenting facts and
data. You need to vouch for that information by citing your sources using the Harvard referencing style.
All secondarily sources images, figures (graphs, tables) used in the Infographic, must also be cited. Be
sure that all are subject to a Creative Commons license.
Resources:
•
•
•
The link below has really clear information with ' 7 steps to writing an infographic'. It shows visual
examples and also written explanations of what should be included in each part of the Infographic.
https://visme.co/blog/how-to-write-an-infographic/
Search images for some ideas of Infographic advertisement of an accounting firm in Google
You are recommended to use Pixabay (https://pixabay.com/) to source images
These last two criteria relate to all of the above questions
2 Marks
Professional communication
Appropriate resources and correct referencing
(1 Mark)
(1 Mark)
Assessment 2
BAC205 Corporate Reporting
2021 Semester 1
Rationale:
This assignment is designed to assess your ability to:
SLO 3. Prepare financial accounting records for specified transactions and events in accord with relevant
Australian Accounting Standards and generally accepted accounting principles.
SLO 4. Prepare financial statements and disclosures as required by the Australian Accounting Standards
including the preparation of consolidated financial statements and accounting for equity investments and
joint ventures (arrangements).
Marking Criteria:
Criteria
High
Distinction
Distinction
Credit
Pass
Fail
Explain some of
the effects the
decision not to
revalue PPE
might have on
the Snapper
Ltd.’s financial
statements.
Effects of
the decision
and
motivation
are
comprehens
ively and
clearly
explained
Effects of the
decision and
motivation are
comprehensiv
ely explained
Effects of the
decision and
motivation are
comprehensive
ly explained
with only a
minor
misconception
Effects of the
decision and
motivation
are
comprehensiv
ely explained
with many
misconceptio
ns
Explanation
and
discussions
are not
mentioned
or are not
adequate
with many
incorrect
assumptions
All journal
entries and
calculations
are presented
with only few
errors
All journal
entries and
calculations
are presented
with some
errors
Discuss two
motivations that
directors might
have not to
revalue the PPE.
Summarise any
affect that
above decision
to not revalue
PPE would have
on the wealth of
the
shareholders.
All journal
entries and
calculation
s are
presented
with no
errors
All journal
entries and
calculations
are presented
with only
minor errors
journal
entries and
calculations
are
presented
with major
errors or are
not
presented
Provide the
accounting
journal entries
to account for
the purchase of
land in 2021 and
to account for
the change in
the value of this
land in 2022 and
2023.
(8 marks)
Assessment 2
BAC205 Corporate Reporting
2021 Semester 1
Criteria
High
Distinction
Distinction
Credit
Pass
Fail
In reference to
AASB 138,
explain why
research
expenditures
and
expenditures on
internally
generated
assets such as
brands,
mastheads and
publishing titles
are not
capitalised
regardless of
whether they
are likely to
generate future
economic
benefits.
Reasons
and
discussions
on
capitalisati
on of
assets are
comprehen
sively
explained
Reasons and
discussions on
capitalisation
of assets are
comprehensiv
ely explained
with only
minor
misconception
s
Reasons and
discussions on
capitalisation
of assets are
comprehensive
ly explained
with some
misconception
s
Provided
explanation
and
discussions
are adequate
Explanation
and
discussions
are not
mentioned
or are not
adequate
Costs are
categorise
d with no
errors
Costs are
categorised
with only
minor errors
Costs are
categorised
with only few
errors
Costs are
categorised
with some
errors
Costs are
categorised
with major
errors or are
not
categorised
Categories
mentioned costs
(i-iv) into
research,
development or
other categories
(5 marks)
Assessment 2
BAC205 Corporate Reporting
2021 Semester 1
Criteria
Provide the
consolidated
statement of
financial position
Provide
consolidation
adjustment journal
entry to eliminate
the investment
(6 marks)
Compare the new
accounting
standard on
leasing, AASB 16,
with the former
accounting
standard AASB 117
Evaluate the impact
of AASB 16 from
the perspective of
the lessee and
management
High
Distinction
Consolidated
statement of
financial
position is
provided
without any
errors
Workings
shown are
logical and
well
presented;
with no errors
All journal
entries and
notes made
are accurate
Distinction
Credit
Pass
Fail
Consolidated
statement of
financial position
is provided with
only minor errors
Consolidated
statement of
financial position
is provided with
only some errors
Consolidated
statement of
financial position
is provided with
many errors
Workings shown
are logical and
well presented;
with only minor
errors
Workings shown
are logical and
well presented;
with few errors
Workings shown
are logical and
well presented;
with some errors
Journal entries
and notes made
are accurate with
only few errors
Journal entries
and notes made
are accurate with
some errors
All journal entries
and notes made
contain only
minor errors
Consolidated
statement of
financial
position is
provided with
major errors or
is not provided
No workings
provided or
workings
shown are
inadequate or
contain major
errors
Most of the
journal entries
or note made
are incorrect
Compariso
n and
evaluation
are
explained
comprehen
sively and
clearly with
well
supported
and wide
range of
evidences
Comparison
and evaluation
are explained
comprehensiv
ely and are
supported by
evidences
Comparison
and evaluation
are explained
with minor
misconception
s
Comparison
and
evaluation are
explained
with some
misconceptio
ns
Comparison
and
evaluation
are not
mentioned
or are not
correct
Work
contains
distinct
understand
able
statements
and
Infographic
poster (Q4)
Work contains
distinct
understandabl
e statements
and
Infographic
poster (Q4) is
presented
with minimal
Minor spelling,
grammar and
punctuation
misconception
s
Work contains
distinct
understandabl
e statements
Some spelling,
grammar and
punctuation
misconceptio
ns
Work contains
distinct
understandab
le statements
Many
spelling,
grammar
and
punctuation
misconcepti
ons found
and the
work is not-
(4 marks)
These last two
criteria relate to
the whole of the
case study.
Professional
communication
(Note: you are
required to
present an
Assessment 2
BAC205 Corporate Reporting
2021 Semester 1
Criteria
Infographic
poster (Q4) and
for whole
assignment
provide space
between
paragraphs; use
Arial 10pt or
TNR 12 pt; use
1.5 or double
line spacing)
(1 mark)
Appropriate
resources and
correct
referencing
(1 mark)
Assessment 2
High
Distinction
is
presented
with no
misconcept
ions
Extremely
well
organised.
Content is
structured
in a
manner
that
facilitates
the
reader’s
understand
ing
A range of
sources
have been
used. All
work has
been
referenced
correctly as
per
Harvard
referencing
style
Distinction
Credit
Pass
misconception
s
and
Infographic
poster (Q4) is
presented with
only few
misconception
s
and
Infographic
poster (Q4) is
presented
with some
misconceptio
ns
Answer is well
organised.
Content is
structured in a
manner that
facilitates the
reader’s
understanding
Three or more
sources have
been used. All
work has been
referenced
correctly as
per Harvard
referencing
style
Fail
readable
and lacks
structure
No or
minimal use
of
Infographic
poster (Q4
Two or more
sources have
been used. All
work has been
referenced
within the
body of the
answer and in
the reference
list, with some
omissions or
errors in terms
BAC205 Corporate Reporting
One or more
sources have
been used. All
work has
been
referenced
within the
body of the
answer and in
the reference
list, with
some
omissions or
errors in
terms
No
additional
sources
have been
used other
than the
text. Others’
work is not
always
acknowledg
ed and there
are a
number of
errors or
noncompliance
with the
Harvard
referencing
style
2021 Semester 1