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ACC/ACF3100 Advanced Financial Accounting Research Assignment: Semester 2 2020 Weighting:25% (marked out of 30) Due Date:Week 8 (Thursday 8 October 4pm) Word Limit:The business report should be a maximum of 1,500 words (+/- 10%) excluding executive summary, references and any appendices Learning objectives assessed: This assessment task is designed to test your achievement of learning objectives 1, 2, 3 and 4. This is an individual assessment task. It is designed to assist you in demonstrating your knowledge of, and ability to critically assess a contemporary issue in financial reporting and disclosure. It also provides you with an opportunity to further enhance your research, judgement and written communication skills. Issue to be investigated: “Research” and “Development” expenditure You have recently been appointed as a graduate accountant working for the Australian Accounting Standards Board (AASB). The Technical Director of the AASB has been asked by the International Accounting Standards Board (IASB) to provide an update on the accounting treatments for “research” and “development”. The Technical Director sent you the following as an introduction of the issue: No intangible asset arising from “research” shall be recognised. Expenditure on research shall be recognised as an expense when it is incurred i.e. an intangible asset cannot be recognised on the statement of financial position for companies where AASB 138 Intangible Assets paragraph 54 applies. An intangible asset arising from “development” shall be recognised if and only if, an entity can demonstrate that all of the requirements of AASB 138 Intangible Assets paragraph 57 have been met. The Technical Director would like you to research the accounting treatment of “research” and “development” expenditure. As recently expressed by the CEO of a pharmaceutical company: “It isn’t fair. These conservative accounting rules make it impossible to show investors that our project was successful – and expensing any of it will cause our share price to go down because the investors will think the project didn’t work.” With this in mind, you need to explain the current accounting treatment for “research” and “development”; what impact this may have on company financial statements, key ratios, and potential investors, and whether you believe this accounting treatment is warranted. You are to research this issue and present your findings in a business report. Your business report needs to be concise and informative. In preparing your report, you should investigate a range of issues: (i) Briefly describe the current accounting treatment and describe the impact of the current standard on company financial statements and if relevant, investor decision making; (ii) Critically analyse whether you believe the current accounting treatment is warranted. Support your position and discussion with reference to accounting concepts and theories covered in this unit. You need to support your discussion with reference to academic journal articles, and, where relevant, high quality professional articles and newspapers. (iii) Provide a recommendation on the future direction the AASB should take in regards to the recognition and measurement of “research” and “development”, which the Technical Director can take to the next meeting of the IASB. Support your recommendation with reference to theories covered in this unit. Further information *This assessment task must be completed individually. *In preparing your business report, you must refer to theories covered in this unit, academic journal articles and, where relevant, high quality newspaper and professional articles. *A word count must be included. Students exceeding the word limit by more than 10% will incur a mark penalty. *You must keep a copy of your submission until your marked assignment is returned. Assessment Criteria: A rubric outlining the assessment criteria and how your work will be assessed against these criteria will be provided on Moodle. This will assist you in completing the assessment task and to see the allocation of marks. For more information on appropriate report writing, formatting and referencing, you should refer to the Q Manual at the following site: https://www.monash.edu/business/5931328906e0c/pdf_file/current-students/qmanual.pdf Students must submit a properly referenced assignment. Students who submit an assignment without in-text referencing (and reference list) will have their assignment returned to them and receive zero marks. These students may choose to re-submit their assignment with appropriate referencing, however students will only be eligible to receive half of the total available marks (i.e. a maximum of 15 out of a total possible 30 marks). Additional information: · A signed cover sheet must accompany your assignment. · Your assignment is to be submitted as a soft copy on Moodle as required by Faculty policy by the due date and time. · You must keep an electronic copy for your records until the final results have been published. · Assignments will be returned to you, together with both general and specific feedback, during SWOT VAC. You should retain this until final results have been released. 3