ACC2115 Company Accounting 2019 SEM 2
Assignment Due: Monday 16 September 2019
The scenario
Imagine that you are a recent graduate working for an accounting practice and yourmanager has asked you to prepare a ‘basis of advice’ report and a ‘draft letter of advice’(you should make up a name for your manager and the accounting practice and create your own letterhead and report header). You are familiar with the client, as you prepare the monthly BAS statement for this company. These two documents will be reviewed by your manager before being sent to the relevant partner of the firm.
The Client
Curly Waters is the owner of Bad Boards Pty Ltd, a large proprietary company under the Corporations Act, which makes surfboards and other surfing equipment. Bad Boards has a strong social media presence and has built a significant customer list from its use of Facebook and Instagram. The company has an annual marketing budget of about $800,000, used to growits list and to build the ‘Bad Boards’ brand. It also hasseveral part-time staff (total wage cost of approximately $200,000 per year), who maintain the customerlist and the company’s social media presence.
Recently, Curly was approached by a local IT developer, who offered to sell him another customer list for $500,000 (Australian customers only). She developed an app, which has proved very popular on Facebook. The app takesimages from the user’s device,merges them into a surfing image from a world famous surf break and provides an image showing the user riding the wave. The resulting image looks very realistic and the user can then share it over a number of social media platforms. The app is free and under its terms and conditions it is able to extract a user’s demographic data and other details, which are used to construct regional customer lists, which can then be on-sold.
Curly has approached your accounting practice for advice in relation to the potential acquisition of the customer list from the IT developer and the treatment of the marketing expenditures and the wage costs. He is concerned that in the previous two financial years, profit has been understated because these expenditures have been treated as expenses, whereas he sees the customer list and brand name as important assets of the business. He is worried that the balance sheet does not reflect the value of the firm, which is particularly important to him, as he is considering selling the company, preferably to an ASX listed company that can, in his words, ‘pay me top dollar’.
Required:
Prepare a‘basis for advice’report for your manager in which you define the issues raised by your client, identify and apply the requirements of relevant legislation and accounting standards to each issue, describe any other relevant factors that need to be considered and describe and justify the advice you suggest for the client in the draft‘letterof advice’.
Prepare a draft‘letter of advice’to Curly Waters, the owner of Bad Boards Pty Ltd, to address each of the issues he has raised. The letter of advice needs to inform him of the requirements of relevant legislation and accounting standards, describe other relevant factors and provide relevant business advice.
University of Southern Queensland 1 |P a g e
ACC2115 Company Accounting 2019 SEM 2
Requirements–Basis of Advice Report:
The report should outline the advice provided in the draft letter of advice to the client and justify the advice by reference to the specific paragraphs/sections of the relevant accounting standards/legislation. An appendix to the report is to be provided in which you provide the exact quote for each paragraph/section identified/discussed in the report (the appendix will only be referred to by the manager if necessary; the partners of this firm do not like to see quotes in the report itself and want it to be in your own words).
You should use headings and sub-headings in your report to organise your thoughts. Tables and diagrams can also be used if it is an effective way of presenting your ideas.
Requirements–Draft Letter of Advice
Your client is a very good businessperson, but has limited knowledge of accounting terminology. Your letter of advice needs to be less formal than the report and should be in a style suitable for a non-accountant. Again, headings etc. are suitable in your letter (it is not an essay). The client is not interested in all of the technical arguments, sodon’t include them.
Assignment requirements:
Your submission is to be typed using size 12 font, 1.5 line spacing and 2.5 cm margins on all sides of the page. You are to submit one document only (a Word document) and the document should have a header, consisting of your name and student number and a footer, showing the course code and name and a page number.
The word limit for the report is 1,000 words (excluding the appendix) and for the letter the limit is 500 words.
For each requirement, you are to use the Harvard style of referencing * and to
provide a bibliography (the word limit does not include the in-text references and
bibliography).
* In a real letter of advice /report you would not use an academic style like this, however it is a requirement of the university, for assessment purposes.
University of Southern Queensland 2 |P a g e
ACC2115 Company Accounting 2019 SEM 2
Graduate accounting skills
One of the aims of ACC2115 Company Accounting, is to focus on knowledge and skills (as defined below) that are highly sought after by employers and expected of an accounting Bachelor graduate. In setting the learning objectives for this course, we have referred to the following learning standards, as identified by Hancock et al (2016, p. 8):
Knowledge:
Integrate theoretical and technical accounting knowledge in a business context.
Judgement:
Exercise judgement under supervision to provide possible solutions to routine accounting problems in straightforward contexts using where appropriate social, ethical, economic, regulatory, sustainability, governance and/or global perspectives.
Critical analysis and problem solving skills:
Critically apply theoretical and technical accounting knowledge and skills to provide possible solutions to routine business issues.
Communication:
Justify and communicate accounting advice and ideas in straightforward contexts to influence specialists and non-specialists.
I urge you to reread the case provided in this assignment and relate it to these learning standards, particularly the Communication standard, which will carry a significant weighting in the marking of your work. In fact, I commend reading the Accounting Learning Standards document to you, as it sets out what you are expected to know and be able to do upon graduation (it is not a long document).
Course objectives
A major aim of ACC2115 Company Accounting isfor students’to develop a deep understanding of many of the accounting standards and the ability to apply their requirements in a business context. In this course, we strive to increase your awareness of the degree of professional judgement required in many contexts, but also relieve you of the burden of thinking you need to be at this level at the end of your studies. Thelearning standard makes it clear that judgement is to be exercised ‘under-supervision’.This assignment presents a realistic scenario that shows how you will develop this skill in the years post-graduation; e.g. through the supervision of your manager/partner.
In the workshops (on-campus and online), we will focus on examples or cases designed to develop your writing, knowledge, analytical/problem solving and judgement skills.We will also focus on ‘library skills’, such asthe use Harvard referencing and literacy skills. We recommend that you work progressively on this assignment in the coming weeks. There is no need to rush it; take some time to think about your thinking. Use the feedback from these workshops to identify and action learning opportunities andbuild your skills (refer again to the ‘learner smarter, not harder’ principles).
University of Southern Queensland 3 |P a g e
ACC2115 Company Accounting 2019 SEM 2
Many students would prefer the assignment to focus on exercises that require calculations and journal entries, but this would suggest they have missed a major goal of this course and have a narrow understanding of the education process. This assignment is an opportunity for you to engage in deeper thinking and to invest in skills that will serve you well in your future career. We hope you appreciate the opportunities this assignment provides and invest in developing some of the skills that are essential for graduates to gain employment.
When you are proud of what you have written, then you are ready to submit!
Assignment rubric
A separate marking rubric for this assignment will be provided on the StudyDesk.
Written communication skills are essential for any accounting professional, so you will see there is a high weighting on correct grammar. Students will lose one mark for each grammatical error up to a maximum of 10 marks. You should refer to the good grammar tip sheet to help you with this aspect of your assignment. Marks will also be awarded for the quality of presentation and spelling and your use of academic referencing.
Marks will be awarded for technical content and the quality of your supporting arguments, i.e. your identification and analysis of the issues and the relevant accounting standards. Finally, be aware of who you are writing for in each requirement; ensure you use an appropriate writing style and remember, your writing is meant to haveinfluence.
Bibliography
Hancock, P, Freeman, M, Watty, K, Birt, J and Tyler, J, 2016Accounting Learning Standards, Australian Business Deans Council, Deakin, viewed 28 March 2019, < https://abdc.edu.au/teaching-learning/learning-standards/="">
University of Southern Queensland 4 |P a g e