Royal Holloway, University of London
School of Management
MN3245 – Accounting for Corporate Accountability
Study Guide
Autumn Term, 2013/14 Academic Year
Course outline
Date Thursday
03 Oct 13
10 Oct 13
17 Oct 13
24 Oct 13
31 Oct 13
07 Nov 13
14 Nov 13
21 Nov 13
28 Nov 13
05 Dec 13
Lecture
Workshop Topic
What is accountability?
NO WORKSHOP
Corporate disclosure – mandatory and
Accountability and users
voluntary
Voluntary reporting theories and
Regulating corporate reporting
practice
Conceptual frameworks –
The reporting entity – defining the
investment decisions or
group for consolidated statements
stewardship?
Qualitative characteristics and
Economic and social consequences
representational faithfulness –
of accounting regulation
employee share options
Defining assets and liabilities – leases Accounting for employee share
and off-balance sheet finance
options
Recognition and measurement –
Lease accounting
accounting for retirement benefits
Recognition and measurement Accounting for retirement benefits
revenue
Reporting social and environmental
Revenue recognition
impacts
Social and environmental reporting
Recap and revision lecture
– is it a waste of time?
Course co-ordinator:
Professor Christopher Napier
Room FBE133, Tel: 01784 276121, E-mail: christopher.napier@rhul.ac.uk
Office hours (Autumn term 2013/14): Thursday, 10:30-12:30
If you want to meet the course co-ordinator at any other time, please send an e-mail to
arrange a mutually convenient time outside these office hours.
MN3245 – Accounting for Corporate Accountability
Study Guide 2013/14
Aims of course
This course aims to:

develop students’ knowledge and understanding of key contemporary issues involved in
discharging corporate duties of accountability to third party stakeholders

develop students’ knowledge and understanding of subjectivities inherent in externally
published accounting information

develop students’ appreciation of the economic consequences of corporate reporting
practices
Learning outcomes
Upon successful completion of this course, students should be able to:
1. Demonstrate an awareness and understanding of corporate duties of accountability to
external stakeholders.
2. Discuss and analyse the nature of subjective judgements involved in several complex
areas of financial, social and environmental accounting and reporting.
3. Employ UK and international Generally Accepted Accounting Practice in analysis of the
financial accounting treatment of a range of complex types of financial transactions.
4. Explain the broad nature of economic consequences which can potentially flow from
different accounting and reporting practices
Teaching and learning methods
The course will be taught through 10 one-hour lectures and 9 one-hour workshops. Lectures
will provide a broad outline structure for each topic covered. Workshops will be used to
discuss issues in additional readings and/or work through numerical exercises related to the
lecture material of prior weeks.
Textbooks
No single book covers this course, while most of the standard textbooks in the area cover
many topics going beyond the scope of the course. A book that covers most topics is:

Alexander, D., Britton, A. and Jorissen, A. (2011) International Financial Reporting and
Analysis, Andover: Cengage Learning (5th edition). ISBN:978-1-4080-3228-2.
In addition, the following supplementary text may be helpful in providing alternative
perspectives on some of the material covered in this course:

Deegan, C. and Unerman, J. (2011) Financial Accounting Theory: Second European
Edition, Maidenhead: McGraw Hill. ISBN: 978-0-07-712673-5

Elliott, B. and Elliott, J. (2012) Financial Accounting and Reporting, Harlow: FT Prentice
Hall (15th edition). ISBN: 978-0-273-76079-5
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MN3245 – Accounting for Corporate Accountability
Study Guide 2013/14
The relevant chapters from these textbooks for each week’s topic are indicated in the
following weekly course outline. In addition, several journal articles are identified – these
should all be accessible from the course Moodle page.
Assessment
The assessment for this course comprises an in-course assignment and an end-of-course
examination. The in-course assignment carries a weighting of 30% and the 2 hour closed
book examination carries a weighting of 70% towards the overall course mark.
The format for the examination will be as in previous years, with a choice of three questions
from five.
The assignment should be approximately 2,000 words in length, including direct quotations,
but not including your list of references/bibliography (and any material in appendices). The
assignment question is set out at the end of this study guide.
LECTURE PROGRAMME
Lecture 1 – Thursday 3 October 2013
What is accountability?
Objectives of lecture:
To recap and develop students’ knowledge and understanding of:
 The concept of accountability
 The roles of corporate reporting
Key reading
Alexander, Britton & Jorissen, chapter 1
Supplementary reading
Deegan & Unerman, chapter 2
Elliott & Elliott, chapter 9
Sinclair, A. (1995), “The chameleon of accountability: forms and discourses”, Accounting,
Organizations and Society, Vol. 20, No. 2-3, pp. 219-237.
Cooper, S.M. & Owen, D.L. (2007), “Corporate social reporting and stakeholder
accountability: the missing link”, Accounting, Organizations and Society, Vol. 32, No. 7-8, pp.
649-667.
Messner, M. (2009), “The limits of accountability”, Accounting, Organizations and Society,
Vol. 34, No. 8, pp. 918-938.
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MN3245 – Accounting for Corporate Accountability
Study Guide 2013/14
Lecture 2 – Thursday 10 October 2013
Corporate disclosure – mandatory and voluntary
Objectives of lecture:
To develop students’ knowledge and understanding of:
 The distinction between mandatory and voluntary elements of corporate reports
 Economic theories of disclosure – agency theory; signalling theory
 Socio-political theories of disclosure - legitimacy theory; stakeholder theory; institutional
theory
Key reading
Deegan & Unerman, chapters 7 and 8
Supplementary reading
Alexander, Britton & Jorissen, chapter 10
Deegan, C. (2002), “The legitimising effect of social and environmental disclosures - a
theoretical foundation”. Accounting, Auditing & Accountability Journal, Vol. 15, No. 3, pp.
282-311.
Unerman, J. & Bennett, M. (2004), “Increased stakeholder dialogue and the internet: towards
greater corporate accountability or reinforcing capitalist hegemony?” Accounting,
Organizations and Society, Vol. 29, No. 7, pp. 685-707.
O'Dwyer, B. (2005), “Stakeholder democracy: challenges and contributions from social
accounting”. Business Ethics: A European Review, Vol. 14, No. 1, pp. 24-41.
Lecture 3 – Thursday 17 October 2013
Regulating corporate reporting
Objectives of lecture:
To develop students’ knowledge and understanding of:
 The regulatory framework for accounting in the UK and European Union
 Economic consequences of accounting regulation
Key reading
Alexander, Britton & Jorissen, chapter 3
Supplementary reading
Deegan & Unerman, chapters 3 and 4.
Elliott & Elliott, chapter 9
Hines, R. D. (1991) “The FASB’s conceptual framework, financial reporting, and the
maintenance of the social world”, Accounting, Organizations and Society, Vol. 16, No. 4, pp.
313-331.
Whittington, G. (2008), “Fair value and the IASB/FASB conceptual framework project: an
alternative view”, Abacus, Vol. 44, No. 2, pp. 139-168.
Bradbury, M. (2008), “Discussion of Whittington”, Abacus, Vol. 44, No. 2, pp. 169-180.
Bushman, R. & Landsman, W. R. (2010), “The pros and cons of regulating corporate
reporting: a critical review of the arguments”, Accounting and Business Research, Vol. 40,
No. 3, pp. 259-273.
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MN3245 – Accounting for Corporate Accountability
Study Guide 2013/14
Lecture 4 – Thursday 24 October 2013
The reporting entity – defining the group for consolidation purposes
Objectives of lecture:
To develop students’ knowledge and understanding of:
 The main issues arising in consolidated accounts
 Creative accounting with use of special purpose entities
Key reading
Alexander, Britton & Jorissen, chapters 25, 26 and 28 (pages 708-709 – you will not be
expected to be able to prepare consolidated accounts, but it is useful to understand the
basic approaches to consolidation and relevant regulations)
Supplementary reading
Elliott & Elliott, chapter 22
Hines, R. D. (1988), “Financial accounting: in communicating reality, we construct reality”.
Accounting, Organizations & Society, Vol. 13, No. 3, pp. 251-261.
Baker, C. R. & Hayes, R. (2004), “Reflecting form over substance: the case of Enron Corp.”,
Critical Perspectives on Accounting, Vol. 15, No. 6-7, pp. 767-785.
Unerman, J. & O'Dwyer, B. (2004), “Enron, WorldCom, Andersen et al: a challenge to
modernity”, Critical Perspectives on Accounting, Vol. 15, No. 6-7, pp. 971-993.
Sanderson, I. (2010), “What REPO 105 really means”, Accountancy, April 2010, pp. 28-29.
Lecture 5 – Thursday 31 October 2013
Qualitative characteristics and representational faithfulness – employee
share options
Objectives of lecture:
To develop students’ knowledge and understanding of:
 The role of employee share options
 Conceptual difficulties in accounting for employee share options
 Accounting requirements for employee share options (IFRS 2)
Key reading
Alexander, Britton & Jorissen, chapter 21 (pages 486 to 499)
Supplementary reading
Elliott & Elliott, chapter 15 (sections 13:18-13:22)
McKernan, J. F. (2007), “Objectivity in accounting”, Accounting, Organizations and Society,
Vol. 32, No. 1-2, pp. 155-180.
Ravenscroft, S. & Williams, P. F. (2009), “Making imaginary worlds real: the case of
expensing employee stock options”, Accounting, Organizations and Society, Vol. 34, No. 67, pp. 770-786.
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MN3245 – Accounting for Corporate Accountability
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Lecture 6 – Thursday 7 November 2013
Defining assets and liabilities – leases and off balance sheet finance
Objectives of lecture:
To develop students’ knowledge and understanding of:
 Reasons for using off balance sheet finance
 Accounting for leases (IAS 17)
Key reading
Alexander, Britton & Jorissen, chapter 15.
Supplementary reading
Elliott & Elliott, chapter 18
Collings, S. (2010), “In a tangle”, Accountancy, August 2010, pp. 70-71.
Nobes, C. W. (2005), “Rules-based standards and the lack of principles in accounting”,
Accounting Horizons, Vol. 19, No. 1, pp. 25-34.
Lecture 7 – Thursday 14 November 2013
Recognition and measurement – accounting for retirement benefits
Objectives of lecture:
To develop students’ knowledge and understanding of:
 Distinction between defined contribution and defined benefit pensions
 Conceptual difficulties in accounting for defined benefit pension obligations
 Accounting for pension obligations under IAS 19
 Key differences between IAS 19 and the UK’s FRS 17
Key reading
Alexander, Britton & Jorissen, chapter 21 (pages 499 to 526)
Supplementary reading
Elliott & Elliott, chapter 15 (sections 15.1-15.17)
Napier, C. J. (2009), “The logic of pension accounting”, Accounting and Business Research,
Vol. 39, No. 3, pp. 231-249.
Peters, B. (2010), “Far from final”, Accountancy, June 2010, pp. 68-69.
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MN3245 – Accounting for Corporate Accountability
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Lecture 8 – Thursday 21 November 2013
Recognition and measurement – revenue
Objectives of lecture:
To develop students’ knowledge and understanding of:
 Problems of determining when revenues and gains should be included in the income
statement
 Financial reporting standards on revenue recognition (IAS18, FRS5 Application Note G,
new IASB proposals)
Key reading
Alexander, Britton & Jorissen, chapter 18.
Supplementary reading
Elliott & Elliott, chapter 8.
O’Donovan, B. (2010), “Money, money, money”, Accountancy, August 2010, pp. 68-69.
Lecture 9 – Thursday 28 November 2013
Reporting social and environmental impacts
Objectives of lecture:
To develop students’ knowledge and understanding of:
 The role of sustainability reporting
 Stages of sustainability reporting
Key reading
Deegan & Unerman, chapter 9
Supplementary reading
Alexander, Britton & Jorissen, chapter 10 (pages 193 to 210)
Elliott & Elliott, chapter 32.
Adams, C. A. (2004), “The ethical, social and environmental reporting-performance portrayal
gap” Accounting, Auditing & Accountability Journal, Vol. 17, No. 5, pp. 731-757.
Dillard, J. F., Brown, D., & Marshall, R. S. (2005), “An environmentally enlightened
accounting” Accounting Forum, Vol. 29, No. 1, pp. 77-101.
Gray, R. (2010), “Is accounting for sustainability actually accounting for sustainability. . .and
how would we know? An exploration of narratives of organisations and the planet”,
Accounting, Organizations and Society, Vol. 35, No. 1, pp. 47-62.
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MN3245 – Accounting for Corporate Accountability
Study Guide 2013/14
Lecture 10 – Thursday 5 December 2013
Recap and revision lecture
Objectives of lecture:
To:
 Recap the course
 Revise areas as requested by students
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MN3245 – Accounting for Corporate Accountability
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WORKSHOP PROGRAMME
Workshop 1 – Thursday 10 October 2013
Accountability and users
Think of different examples of accountability – these need not involve companies, and
accountability need not be financial. What are the common factors in accountability
relationships? To whom do you think companies should be accountable?
Note: it may be helpful to read the paper by Stuart M. Cooper and David. L. Owen
“Corporate social reporting and stakeholder accountability: the missing link”, Accounting,
Organizations and Society, Vol. 32, No. 7-8, 2007, pp. 649-667. A copy of this paper is
available on the course Moodle page.
Workshop 2 – Thursday 17 October 2013
Voluntary reporting theories and practice
It has been claimed that the predominant reason for companies disclosing voluntary
information in accounting reports is to protect, and increase, the relative power and wealth of
managers and providers of financial capital. Critically evaluate this claim, supporting your
discussion with both theoretical arguments and practical examples.
Workshop 3 – Thursday 24 October 2013
Conceptual frameworks – investment decisions or stewardship?
It has been claimed that financial reporting has increasingly moved away from recording
transactions and reporting on stewardship, that is, how well a company and its management
use the resources invested by shareholders, and possibly by other stakeholders. This has
been replaced by reporting values, with an emphasis on providing information to help
investors make their investment decisions. Those who hold this view point to the focus on
the balance sheet (financial position) rather than the income statement (financial
performance) in conceptual framework documents. Do you agree with this? Does it matter?
Note: it would be useful to read the paper by Geoffrey Whittington “Fair value and the
IASB/FASB conceptual framework project: an alternative view”, Abacus, Vol. 44, No. 2,
2008, pp. 139-168, and Michael Bradbury’s “Discussion of Whittington”, Abacus, Vol. 44, No.
2, 2008, pp. 169-180. Copies of these papers are available on the course Moodle page.
Workshop 4 – Thursday 31 October 2013
Economic and social consequences of accounting regulation
“Accounting standards merely regulate the reporting of economic transactions, they have no
impact upon the underlying economic performance or social impact of an entity.” Do you
agree or disagree with this claim? Give both theoretically based reasons and practical
examples.
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MN3245 – Accounting for Corporate Accountability
Study Guide 2013/14
Workshop 5 – Thursday 7 November 2013
Accounting for employee share options
On 1 January 2010 Wolt plc issued options over 500 of its £1 ordinary shares to each of its
2,000 employees. These share options will become vested and can be exercised only by an
employee if that employee remains employed by Wolt plc for the whole of the three year
period ending on 31 December 2012. The directors of Wolt plc estimated on 1 January 2010
that 30% of their 2,000 employees would have left the company by 31 December 2012.
The option exercise price is £6.50 per share, and the market price of Wolt’s £1 ordinary
shares was £4.35 on 1 January 2010. It has been calculated that the fair value of each of
these employee share options on 1 January 2010 was £1.25 per share option.
150 of the employees who had been granted share options left the company during 2010,
and on 31 December 2010 the directors of Wolt plc revised their estimate of the proportion of
employees whose options would not become vested to 25%.
A further 250 of the employees who had been granted share options left the company during
2011, and on 31 December 2011 the directors revised their estimate of the proportion of
employees whose options would not become vested to 28%.
A further 120 of the employees who had been granted share options left the company during
2012, and on 31 December 2012 all remaining employees exercised their options. The
market price per £1 ordinary share in Wolt plc was £9.25 on 31 December 2012.
Required:
(a)
Calculate the expense (charge) to be included in Wolt plc’s income statement in
respect of these share options each year from the year ended 31 December 2010 to
the year ended 31 December 2012, in accordance with the provisions of International
Financial Reporting Standard number 2 (IFRS 2).
(b)
Show how the above share options would be treated in the balance sheet of Wolt plc
as at 31 December 2010 and 31 December 2011 in accordance with the provisions of
IFRS2.
(c)
Show how the exercise of the options on 31 December 2012 would be accounted for.
(d)
Discuss how your answers to parts (a), (b) and (c) would be different, if at all, if the
market price of Wolt’s shares on 31 December 2012 was £4.25 per share, and the
remaining employees behaved rationally.
(e)
Critically evaluate how the accounting treatment of share options required by IFRS 2
conforms to the International Accounting Standards Board’s conceptual framework.
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Workshop 6 – Thursday 14 November 2013
Lease Accounting
Latir plc was incorporated and commenced business on 1 April 2013. On that date it entered
into the following leases:
1. A five year lease for machinery at a rental of £450,000 per annum payable in advance.
The present value of the lease payments at 1 April 2013 was estimated as £1.9 million,
equal to the market value of the machinery leased. Latir plc is responsible for insuring
and maintaining the machinery during the period of the lease.
2. A three year lease for computer equipment, with an annual rental of £50,000 payable in
arrears. The present value of the lease payments at the beginning of the lease was
estimated as £120,000, which was the same as the market value of the computer
equipment on that date. Latir plc is responsible for insuring and maintaining the computer
equipment until the end of the lease.
3. A 15 year lease for the new building occupied by the company. The annual rent payable
for the building is £300,000, payable quarterly in advance. The present value of the lease
payments had been estimated as £2.7 million on 1 April 2013, when the market value of
the land and building was £5 million. Latir is responsible for maintaining and repairing the
building during the lease, but insurance is the responsibility of the landlord. The building
is expected to remain in good condition and suitable for use as offices until well after the
year 2100.
Latir plc has not entered into any other leases, and has not purchased any fixed assets. Its
accounting policy is to depreciate leased assets, where appropriate, on a straight line basis
over the term of the lease and to apportion interest charges on finance leases using the
sum-of-the digits method. However, the company’s directors also wish to consider the effect
on the company’s financial statements if the company were to use the actuarial method.
Required:
(a)
Show how the above leases will be reflected in the financial statements of Latir plc for
the years ended 31 March 2014 (the first year of operation) and 31 March 2015 (the
second year of operation) in accordance with the requirements of International
Accounting Standard 17 (IAS 17), including relevant notes to the accounts. Clearly
explain why you have adopted the accounting treatment you have chosen for each of
the leases. You should use both the actuarial method and the sum-of-digits method.
(b)
Without carrying out any further calculations, explain why and how the accounting
treatment of leases you have adopted in your answer to part (a) of this question would
change if the distinction between operating and finance leases were removed, so all
leases were accounted for on the same basis.
Note: The interest rate implicit in lease 1 is 9.25%. The interest rate implicit in lease 2 is
12%, and the interest rate implicit in lease 3 is 8%. All of these are annual rates.
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Workshop 7 – Thursday 21 November 2013
Accounting for retirement benefits
Brno plc operates a defined benefit pension scheme. On 1 January 2013, the present value
of its pension fund obligations amounted to £100 million, and the market value of its pension
fund assets also amounted to £100 million. The company’s policy is to recover any actuarial
surpluses of pension fund assets over pension fund obligations by reducing future
contributions from the company to the pension fund. The following information relates to
Brno plc’s defined benefit pension scheme for the financial years ended 31 December 2013
and 31 December 2014:
2013
2014
6.0%
5.0%
10.0%
8.0%
Current service cost
£15m
£17m
Benefits paid from the pension scheme
£12m
£18m
Contributions paid into the pension scheme
£10m
£14m
Present value of pension scheme obligations at end
of year
£105m
£120m
Market value of pension scheme assets at end of
year
£110m
£112m
Yield on high quality corporate bonds at beginning of
the year
Expected rate of return on pension scheme assets
(forecast at beginning of year)
Brno prepares its financial statements in accordance with International Financial Reporting
Standards, and will apply the most recent version of International Accounting Standard 19
(IAS 19) in preparing its financial statements. You should assume that all cash flows related
to the pension scheme occur at the end of each year. Ignore taxation.
Required:
(a)
In accordance with the accounting requirements of IAS 19 calculate the following
amounts to be included in the financial accounts of Brno plc for each of its financial
years ended 31 December 2013 and 31 December 2014, and identify the accounting
statement in which each item would appear:
(i)
The net pension asset or liability
(ii)
The pension operating cost (or credit)
(iii)
The net pension financing cost (or credit)
(iv)
The actuarial gain or loss
(b)
“IAS 19 is based on the assumption that pension obligations can be calculated
precisely. Given the uncertainties involved, this is nonsense.” Discuss this statement.
(c)
Accounting standards such as IAS 19 have been blamed for the decline of defined
benefit pension schemes in the UK. How far is this allocation of blame fair?
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Workshop 8 – Thursday 28 November 2013
Revenue Recognition
Clementi Airways operates a long-haul air passenger service from London to Sydney via
Bahrain and Singapore four times weekly. Because the flying time is considerably longer
than more direct flights, Clementi has difficulty in selling all seats in the business class
section of its planes. To increase demand, Clementi has advertised a special offer.
Passengers booking a return flight from London to Sydney departing and returning between
1 September and 15 November 2013 are charged a return fare of £2,000 (which is
considerably less than the fare charged by other airlines), and are given a voucher to
exchange for a free return flight between London and Sydney departing and returning
between 15 January and 15 April 2014. 1,000 customers took advantage of the offer.
It is early January 2014, and Clementi must now decide how to account for the revenue
relating to these fares in its financial statements for the year ended 31 December 2013.
Various members of the accounting staff have been asked for suggestions.
(1)
Ali suggests that the easiest way of accounting is to treat half of the fare (£1,000) as
revenue in 2013 and the remaining half as revenue in 2014.
(2)
Bassam notes that the second flight is described as “free” and therefore all of the
£2,000 should be recognised in 2013.
(3)
Khaldoun points out that the incremental costs of carrying a business class
passenger from London to Sydney and back again (in-flight service, additional fuel,
ground handling, ticketing and administration) are £200, and this should be allowed
for. So Clementi should recognise £1,800 in 2013 and carry forward £200 to cover
the costs that would be incurred in 2014.
(4)
Davoud argues that the transaction is not complete until the second flight has been
taken, and therefore Clementi should recognise no revenue until 2014. He would be
prepared for the incremental cost of the first flight to be carried forward rather than
expensed in 2013, and offset against the revenue when this is recognised in 2014.
(5)
Eliezer comments that about half of the passengers holding vouchers will not in fact
use them. He suggests that Clementi should recognise £1,500 per ticket in 2013 and
£500 per ticket in 2014 to allow for this.
(6)
Fatimah reminds her colleagues that an alternative marketing approach that had not
been adopted was to sell return flights between London and Sydney taken between
1 September and 15 December 2013 for £1,700, with no voucher being offered. She
recommends that Clementi should recognise revenue of £1,700 in 2013 and the
remaining £300 in 2014.
Required:
(a)
International Accounting Standard 18 Revenue defines revenue as “the gross inflow of
economic benefits during the period arising in the course of the ordinary activities of an
entity when those inflows result in increases in equity, other than increases relating to
contributions from equity participants”. What problems arise in deciding whether
revenue can be recognised from the sale of goods and supply of services, and how
does IAS18 provide guidance on how to deal with these problems?
(b)
Evaluate the six suggestions for recognising Clementi Airways’ revenue by reference
to IAS18 and consider whether IAS18 leads to a reasonable accounting treatment in
this case. Would the IASB’s current (2010) proposals for revenue recognition lead to
any change in your answer?
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Workshop 9 – Thursday 5 December 2013
Social and environmental reporting – is it a waste of time?
Download either the Tesco plc social report for 2012/13, available at
http://www.tescoplc.com/files/pdf/reports/tesco_and_society_2013_ipad.pdf or the BP plc
sustainability report for 2012, available at
http://www.bp.com/content/dam/bp/pdf/sustainability/groupreports/BP_Sustainability_Review_2012.pdf
Read through your chosen report and:
(a) Identify two aspects of the report that you think are particularly good;
(b) Identify two aspects of the report where you think that the company is trying to
“manage impressions”;
(c) Think about whether there is anything that should, in your view, have been included
in the report but that was omitted;
(d) Assess whether what is measured in the report is (i) relevant, and (ii) capable of
being measured objectively; and
(e) Look at how the material in the report is independently “assured” – does this make
you more comfortable with the information disclosed?
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Assignment question
The International Accounting Standards Board’s preferred measurement basis for financial
reporting is fair value, which is defined in IFRS 13 Fair value measurement as “the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.” The IASB makes it clear that fair
value is a market-based measurement, not an entity-specific measurement. This may make
sense for an item that is actively traded on broad and deep markets, but it is more of a
problem for items that are not actively traded.
Required:
(a) Choose a listed company in any one of the following three sectors: retail, food and
beverage manufacture, hotels. (The company need not be listed on the London
Stock Exchange, but should be listed on a leading stock market. Also, the company
may carry on business in several different business sectors, as long as its main
business is one of the three identified).
(b) Identify the principal types of non-current (fixed) asset owned by your chosen
company (depending on the company chosen, these may be intangibles or tangibles,
or both).
(c) Discuss the problems that your chosen company is likely to have to deal with in order
to measure the fair value of the types of asset you have identified.
(d) Comment on whether the IASB’s approach to fair value measurement is actually
practical for companies with non-current assets that are not actively traded on broad
and deep markets.
A good answer will go a long way beyond mere description of the issues involved, including
analysis and criticism. Some reading suggestions will be provided through Moodle, and
good answers are likely to use other relevant sources.
The deadline for submission of your essay is Tuesday 12 November 2013. Your essay
must be submitted in accordance with the standard School of Management submission
procedures. Please submit your essay as a Word file through the Turnitin plagiarism
software – a link for uploading your essay will be provided on the course Moodle page. Also
submit a printed version of your essay to the undergraduate office. Further details of the
submission process will be given before the submission date if this is necessary.
Any essays submitted after the deadline will be subject to the standard Royal Holloway late
submission penalties (10 percentage points deducted from the mark awarded for essays
submitted up to 24 hours after the deadline, a mark of zero for any essays submitted more
than 24 hours after the deadline). Extensions to the deadline will only be granted in very
exceptional circumstances. Failure or inaccessibility of computer equipment will not be
accepted as an adequate reason for granting an extension, so if you decide to leave printing
of your essay until the morning of 12 November then you have made the choice to take a
risk of having marks deducted if you experience problems accessing printers etc.
When writing an academic piece of work it is perfectly acceptable to quote or paraphrase
items you have read, provided you enclose direct quotes in quotation marks and state
the original source of the item. This requirement also applies if you copy, cut and paste, or
paraphrase material found on the internet. Failure to attribute quotations in this manner
will result in your assignment being penalised for plagiarism. All written academic work
must have a bibliography attached, listing all items referred to in researching and writing the
piece of work.
The aim is to return the assessed coursework by Monday 25 November 2013.
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