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Assessment Task 1: Assessment Task Policy and Standards Review Schedule TBA Outcomes Assessed Performance Criteria: 1.1 Addresses some elements of required skills and knowledge as shown in the Assessment Matrix Description: Note to the Trainers/Assessors: Ideally, different policies should be referred to different learners to ensure originality and variety of responses. Rio Tinto is given as an example in this task. Similar policy statements can be found in the annual reports of public companies. The Australian Accounting Standards Board (AASB) is the Australian Government agency responsible for developing, issuing and maintaining accounting standards that apply under Australian company law. The Board's functions and powers are set out in the Australian Securities and Investments Commission Act 2001 (AASB). The AASB makes Australian Accounting Standards, including Interpretations. Under the Australian Corporations Act 2001, many entities are required to apply Australian Accounting Standards when preparing their financial statements. In this assessment task, you will be required to review a financial reporting policy of an ASX listed public company. The example below is of one of the largest mining companies in Australia (and the world). The following policy statement was published by Rio Tinto in its 2010 annual report; http://www.riotinto.com/annualreport2010/governance/financial_reporting.html Review the policy and complete the following tasks; 1. Summarise the policy in your own words 2. List and briefly describe all the legislative instruments mentioned in the policy 3. Research and locate AASB Framework: Framework for the Preparation and Presentation of Financial Statements 4. Review and summarise reporting requirements and standards for preparing and publishing “General Purpose Financial Statements” Prepare your answer in a word-processed document, appropriately structured under headings and sub- heading to organise the information. You may attach the relevant pages of standards and legislations as annexures to your document. FNSACC514 Prepare Financial Reports for Corporate Entities Assessments | V 2.0 | Apr 2018 Page 2 of 5 Assessment Criteria The following assessment criteria will be used for marking this assessment task. Ensure that you have addressed all of the criteria in your work. Used an appropriate policy document/statement of an ASX listed public company relevant to financial reporting Summarised the policy and identified legislative and regulatory requirements for preparation of general purpose financial statements Researched, collated and summarised information from a range of sources (citations and copies of reference documents) Summarised the policy document in own words Downloaded and reviewed AASB Framework for the Preparation and Presentation of Financial Statements Found relevant sections and standard for preparing and publishing general purpose financial statements Summarised the relevant standards in own words Cited all external sources using an appropriate referencing system Submission Guidelines Submit: Copy of the policy document used Written summary of the policy and relevant AASB standards Copies of legislations, guidelines or other reference documents Electronic versions of the assessment task and email/electronic submission arrangements are at further discretion of the trainer/assessor. FNSACC514 Prepare Financial Reports for Corporate Entities Assessments | V 2.0 | Apr 2018 Page 3 of 5 Assessment Task 2: Assessment Task Group Project: Sonic Health Care’s proposed Acquisition of Healthscope Limited Schedule TBA Outcomes Assessed Performance Criteria: 1.1, 1.2, 1.3, 1.4, 1.5, 2.1, 2.2, 2.3 Addresses some elements of required skills and knowledge as shown in the Assessment Matrix Description: Note to Trainers/Assessors: This project should be handed out at the begging of the term with a plan discussed with the learners to complete it by end of the term with allocated in-class assessment time as well as in own time. Group formation/selection should be supervised to ensure that each group has access to the required skills to complete this project. Also, with a focus on this major project at the end of the term, learning sessions should include aspects of this project with an opportunity for the learners to practice within the class. Ideally, sometime should be allocated in each learning session for the project, helping the learners to progress as the term progresses. Time should be allocated for presentations at the end of the term. This assessment task is given as a group project to be undertaken by a group of up to four learners. Ideally, the groups should be formed at the begging of the term. The groups, in consultation with their trainer/assessor must understand the context and complexities of the task involved; and accordingly plan their project with appropriate delegation of tasks and responsibilities to group members. This project can be completed as a progressive task over the duration of the term. Task: In this assessment task, your group will be given financial statements of two major health care companies, Sonic Health Care and Healthscope Ltd. Sonic Healthcare has recently proposed acquisition of Healthscope as part of its strategic and growth plan to expand its operations and enhance its market share. Annual reports of both the companies will be provided to your group. Your group will be required to; Analyse each annual report and write brief summaries Summarise all references to AASB standards in the notes Calculate Valuation Ratios Research and suggest two valuation methods that Sonic Health Care can use in valuing Healthscope For sample purpose (what the data might look like after the acquisition), merge 2011 financial statements of both the companies and prepare consolidated statements: Balance sheet, Income statement, and Cash Flow Prepare notes to the financial statement as per the AASB requirements and standards Research and identify possible taxation implications of acquisition for Sonic Health Care (based on the consolidated statement) Create graphs to show Sonic Health Care’s key financial positions before and after consolidation FNSACC514 Prepare Financial Reports for Corporate Entities Assessments | V 2.0 | Apr 2018 Page 4 of 5 You may obtain additional information from ASX and company’s respective websites. Background: Sonic Healthcare is one of the world's largest medical diagnostics companies, providing laboratory and radiology services to medical practitioners, hospitals, community health services, and their collective patients. Sonic Healthcare was listed on the Australian Securities Exchange (ASX) in 1987 and, following reconstitution of the Board in 1992, has experienced exceptional growth. Since 1993, our annual revenues have risen from A$25 million to over A$3 billion. We have progressed to become one of the top 100 companies listed on the ASX. Since its inception in 1985 Healthscope has grown to become Australia's largest provider of integrated healthcare. Healthscope provides private hospital, medical centre and pathology services in every state and territory of Australia. Healthscope also operates an expanding network of pathology services in New Zealand, Malaysia, Singapore and Vietnam. The consolidated statements must conform to AASB standards and prepared using MS Excel. You will need to submit a copy of the Excel file for assessment along with your written analysis. As part of assessment criteria for this task, equal and active participation from all groups will be required. Each group will need to submit a group statement, signed by all group members, outlining their respective role and contribution in the project. Any problems or non-contribution from ant group members should be reported to the trainer/assessor at the earliest. Assessment Criteria The following assessment criteria will be used for marking this assessment task. Ensure that you have addressed all of the criteria in your work. Successfully formed the group Assessed available skills and knowledge of each group Defined roles and responsibilities of each group member Identified and itemised project tasks Delegated tasks to group members based on their skill and knowledge sets Obtained and used appropriate company annual reports and financial statements for the task Summarised each of the reports in own words and understanding Report summary highlights key performance and growth areas of respective companies References to AASB standards are identified, reviewed and summarised Relevant legislative references are noted and summarised Valuation ratios are calculated to determine true value of the companies in relation to its share prices Obtained and used current share prices from ASX Used historical data where appropriate in calculations Calculated Price to earnings ratio (PE) Calculated Price/earnings to growth ratio (PEG) Calculated dividend yield Researched and suggested two commonly used company valuation methods (e.g. Asset Valuation Method, Market Valuation Method, Price Earnings Multiple Valuation) Suggested valuation methods are appropriate for the proposed merger Appropriate references are provided to support the suggested valuation methods Prepared a consolidated (2011) balance sheet Prepared a consolidated (2011) income statement FNSACC514 Prepare Financial Reports for Corporate Entities Assessments | V 2.0 | Apr 2018 Page 5 of 5 Prepared a consolidated (2011) cash flow statement Financial data is accurate and represents accurate consolidated value Financial statements are appropriate structured and presented as formal documents Financial statement formats conform to the common Accounting Standards (AASB) for reporting entities Financial statements are supported by explanatory notes in compliance with AASB standards Illustrated company’s financial positions using graphs and/or charts Graphs draw data from within the worksheets Graphs are appropriately titled and labelled Taxation implications are researched and summarised for reference purpose Maintained a group portfolio and kept records of group meetings and communications Submission Guidelines Submit: A copy of the Excel file containing all the consolidated statements Written summaries and analyses: Word processed Signed group statement Group portfolio containing meet records, communication and draft work/references Financial statements must be prepared using MS Excel. Email/electronic submission arrangements are at further discretion of the trainer/assessor.