ACCT7104 CORPORATE ACCOUNTING- CASE STUDY
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ACCT7104 CoRPoRATE ACCoUNT1NG- CAsE sTUDY
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Case study 1nformation |
The Directors of Brisbane Ltd (a listed company) have come to your accounting firm to seek advice on how to account for the investments they have in the five (5) entities-- Canberra Ltd, sydney Ltd, Melbourne Ltd, Adelaide Ltd and Perth Ltd. All shares issued by each of the entities are ordinary shares with normal voting rights. All key facts as known to the company are provided below:
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Canberra Ltd 回 Brisbane Ltd owns 45% of the issued capital. 回 The remaining shares are owned by a diverse group of investors who each hold a small parcel of shares, many of whom are unlikely to attend meetings. 回 The current board of directors of Canberra Ltd has seven members. 回 six directors on the board of Canberra Ltd are appointed by Brisbane Ltd. |
sydney Ltd 回 Brisbane Ltd owns 90% of the issued capital. 回 The remaining shares are owned equally between two shareholders. |
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Melbourne Ltd 回 Brisbane Ltd owns 40% of the issued capital. 回 Three institutional investors equally hold 50% of the issued capital. These shareholders regularly attend meetings and vote. 回 The remaining 10% of the issued capital are owned by a geographically diverse group of investors who each hold a small parcel of shares, many of whom are unlikely to attend meetings. |
Adelaide Ltd 回 Brisbane Ltd owns 35% of the issued capital. 回 sydney Ltd owns 25% of the issued capital. 回 The remaining shares are owned by a small group of investors who each own 10% of the issued shares. 回 Brisbane Ltd and sydney Ltd each have two appointees on the board of directors which has five members. |
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Perth Ltd 回 Brisbane Ltd owns 25% of the issued capital. 回 The remaining shares are owned by three institutional investors who each own 25% of the issued capital. 回 All investors have rights to the net assets of Perth Ltd. They take a keen interest in the running of the company and attend all meetings. 回 The shareholders of Perth Ltd have a contractual agreement whereby each investor cannot make any operating, investing or financing decisions without the expressed consent of the other parties. |
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Details sought by the Directors:
Given the information above, the directors of Brisbane Ltd would particularly like to know:
回 the type of investment for each entity (i.e. you need to clearly identify the investor-investee relationship)
including a summary of the identifying criteria and an application of this criterion ;
回 the accounting method to be adopted for this type of investment1; and
回 which entities, if any, would form part of the Brisbane Ltd Group .
1 Note: You are not required to explain how to apply the accounting method in detail, but rather simply identify (state) the accounting method. You must cite the specific provisions including paragraph from the relevant AASB using one of the following two examples for in.text referencing in your presentation slides: AASB 102:11 or AASB 102 para. 11.
As a consultant, you are required to prepare a business-oriented memorandum (maximum 2,000 words) for the directors of Brisbane Ltd to explain the way in which Brisbane Ltd would account for its investment in the five entities.
You must justify your conclusions with suitable referencing to the relevant Australian Accounting standards . Your report should include any assumptions made and is to clearly identify what, if any, additional information Brisbane Ltd would need to make a final determination if there is any uncertainty.
Requirements:
Prepare and submit a memorandum to the Board of Directors that summarises your responses to the queries raised by the Board in the case study. This should be a formal professional report and your memorandum should clearly recommend a reporting method for each of the entities within the corporate group.
Format: The assignment is to be prepared as a pdf document using Times New Roman 12-point type with single line spacing. The report does not require an Executive summary and Table of Contents given the brevity of the required information.
回 overall word limit is 2,000 words excluding appendices and reference. Additional words placed in appendices
will be ignored for marking purposes.
回 You must cite the specific provisions including paragraph from the relevant AAsB using one of the following two
examples for in-text referencing: AAsB 102:11 or AAsB 102 para. 11. You might find the following links helpful:
http://www.utas.edu.au/accounting-communication-matters/writing-an-essay-orreport/referencing/accounting- standards
write, cite and submit - Library - University of oueensland (uq.edu.au)
Referencing style: Harvard referencing should be adopted for in-text references and for the reference list.
回 Do not reproduce significant parts of the regulations / standards in your report. The focus should be on
interpretation and application of the standard, with a concise, well-structured analysis for your client with key referencing to critical elements of the appropriate accounting standards.
回 The use of tables/figures/diagrams is essential. For example, a diagram is to be used to demonstrate the shareholding
relationship between each entity and table/s is/are to be used to summarise voting rights and interests held. These should be inserted into the body of the report NoT included as an appendix.
回 This assessment must be the sole work of the individual student and not done in collaboration with other students.
students may discuss with one another the general principles of the Accounting standards and its application to the various transactions; however, you may not collaborate/discuss on the specifics of the report or how the standards are relevant to the report.
Blackboard assignment instructions:
1. Please ensure you upload:
A PDF of the memorandum including appendices requested, within 2,000 words limit to the Blackboard submission link (under “Blackboard/Asssessment/Assessment 1 Individual Case study"). ".The file name for the submission should be prepared as: “Given name" “Family name" “student ID" ACCT7104(for example: Tina Gao 41234567 ACCT7104)
2. You have a maximum number of THREE submission attempts. The system will only keep the last submitted paper. so please make sure that your last submission is the correct version. submissions via email are not acceptable and hence will not be graded.
3. After submission, you should receive a notification email from your student email account confirming the successful submission of your work. Keep the email secure as your proof of submission.
4. students are reminded of their obligations under the student Charter obligations which can be reviewed with the following links:
Plagiarism: All cases reports will be reviewed for plagiarism and independent content. The University has adopted the following definition of plagiarism: Plagiarism is the act of misrepresenting as one's own original work the ideas, interpretations, words, or creative works of another. These include published and unpublished documents, designs, music, sounds, images, photographs, computer codes and ideas gained through working in a group. These ideas, interpretations, words, or works may be found in print and/or electronic media. students are encouraged to read the Uo student Integrity and Misconduct policy (http://ppl.app.uq.edu.au/content/3.60.04-student-integrity-and- misconduct) which makes a comprehensive statement about the University's approach to plagiarism, including the approved use of plagiarism detection software, the consequences of plagiarism and the principles associated with preventing plagiarism. Check the similarity index of your case report through Turnitin. There could be zero mark for the cases such as cooperation between students; copy from case reports of students enrolled in previous semesters.
2022-08-22