what corrections / changes need to be made to the statement of financial position

 

Answer the two questions listed below. The questions below are given a total of 50 marks, which will be converted to a mark out of 15%.

If necessary, all work must be displayed to support your claims.

1st question: 35 points

The financial reporting process and the regulatory environment

You work for a sizable accounting company that specialises in creating all-purpose financial reports for big businesses that are listed on the Australian Securities Exchange (ASX). One of your main responsibilities as the training manager is to create a regular newsletter for the team members who work on the aforementioned financial reports. The newsletter’s goals include keeping staff members informed of the most recent advancements in financial reporting, alerting them to changes that may have an influence on their work, and giving staff members adequate information to meet the following needs:

In order for staff to determine whether they need to conduct further research given the nature of their own work, it is necessary for employees to comprehend the nature of the news, change, or development and its potential impact;
Give workers instructions on how to find additional information on the news, change, or development if they so desire, including website links as necessary.

Required:

Identify and describe changes, events, and news in the financial reporting environment for the time period spanning from December 1, 2016, to March 17, 2017, in a two-page newsletter.

Detailed instructions on how to complete this task:

Identification of developments and changes

This will require a protracted investigation across several sources over the necessary time. You must recognise and take into account a variety of developments and changes, including:

Technical issues include, for instance, the development of new accounting standards, their amendment, updates on ongoing AASB or IASB projects, the conclusions of AASB or IASB meetings, and changes to ASX listing regulations.
Financial reporting is regulated and monitored, for instance, through ASIC reviews of financial reporting.
influences from politics or prospective new developments ‘Political’ doesn’t just refer to what politicians do; it also refers to lobbying and other actions taken by other groups to advance their own interests. For instance, there may be articles about businesses or specific interest groups like the Group of 100 that claim that the introduction of certain accounting standards will disadvantage them or otherwise have a negative effect.

You must take into account both domestic (Australian) and foreign sources and developments.

Due to the limitations of a two-page newsletter, you must decide for yourself if and how much information on certain news items, changes, and developments should be included. It is not expected that you provide exhaustive descriptions of changes or developments, but you may feel that additional detail is required in some situations.

Abbreviations may be used since it is anticipated that the target audience is familiar with popular terminologies and acronyms (like AASB and IASB).

What should you disregard?

Make sure the news, changes, and developments you include in the newsletter are pertinent to the goal, especially if they have anything to do with creating general-purpose financial reports for sizable businesses that are listed on the Australian Securities Exchange. The newsletter shouldn’t take into account topics that are only loosely connected to the creation of financial reports, like (this is not a complete list):

Fraud
Auditing
Taxation
Other disclosures by listed businesses include voluntary disclosures in the field of corporate social responsibility as well as industry disclosures mandated by peak groups.
Possible sources

You will need to conduct an extensive source investigation given the breadth of the potential implications for financial reporting. A list of sources that might be of interest is provided below. Students should look for more materials because this list is not thorough. Students should use a variety of sources from each category rather than relying solely on one type; thus, they should look at journals, newspapers, and other sources in addition to websites. Possible information sources include, for instance:

a) Websites from companies like:

Accounting Standards Board of Australia
Council for Financial Reporting
Commission for Australian Securities and Investments
British Securities Exchange
Accountants International Federation
Chartered accountants in New Zealand and Australia
Australia CPA
Board for International Accounting Standards
major accounting companies’ websites

(b) Publications by experts:

(CPA) in the Black
(CAANZ) Acuity

(c) Journals/newspapers

Format and delivery

The following guidelines must be followed when creating your newsletter:

The title of the newsletter, which you must choose, and information about the time period it will cover must appear at the top.
The newsletter shouldn’t read like one long ‘essay’. It must have headers and subheadings that help the reader navigate the content, identify the types of news, changes, and developments, and help them differentiate between items of interest and changes of varying importance.
In order for the reader to learn more about the news, change, or development in depth, you must direct them to specific sources, including internet links when applicable.
The newsletter must be produced with a minimum font size of 11 points (headings, etc. may want to use larger fonts). There are no precise guidelines for line spacing, margins, etc., other than the minimum font size. However, you should be aware that just reducing line spacing or margins to “fit more in” may have an influence on how the message is presented and how effective it is.
No set ‘word limit’ is in place. The newsletter can only be two pages long. Only the first two pages of a newsletter that have more pages than the allowed two will be marked.
Avoid including genuine articles, printouts from websites, etc. with your evaluation. Only the specifics of these must be included in the bibliography (see Section 4 below).

Never be afraid to be original. The level of reader interest has an impact on a newsletter’s effectiveness.

Bibliography and citation

Instead of a reference list, this assessment must include a bibliography; this should be provided on a separate page and should not be included in your newsletter. A bibliography lists all sources you used to research and complete your work, not just those mentioned or credited in the text itself. A bibliography is necessary (instead of a reference list) since it will give readers a better understanding of the breadth of your research activity, which is one of the evaluation criteria. The bibliography is anticipated to be lengthy. Not only a broad link to a website, newspaper, etc., but specific articles or readings that you have really visited must be listed in the bibliography. As a result, please cite each article you read separately if you use a source like the AASB website. Only use sources that are pertinent to the topic. For instance, it would not be appropriate to include articles from a newspaper in your bibliography if the majority of the content was about taxation or auditing concerns since these topics were not directly relevant to your field of interest.

The acceptance or marking of newsletters without a bibliography is possible.

Please remember to specify the date accessed when citing electronic sources. Check out the APA referencing guide here if you’re unsure of how to cite and reference your readings.

Please be reminded that plagiarism is viewed as a significant problem within the university system, with harsh consequences for students who have been found to have intentionally copied work. The assignment will not be graded at all if plagiarism is found to be the student’s fault. Before beginning assessment work, all students should make sure they are aware of the policy on plagiarism and the reference requirements.

Question No. 2 (15 points)

presenting financial statements

You work for Kool Klothes Ltd. as the senior financial accountant. Following the company’s first year of operations, one of the new trainee accountants created the statement of financial status as of June 30, 2016, which is as follows:

The Kool Klothes Ltd.
Financial Situation Report as of June 30, 2016
$000

Assets

Cash in the bank

Inventory and receivables: 190

12 raw materials

Current Project 24

Paid-in-full coverage 13

Listed company shares (at cost): 40

Cost of advertising: 16

Assets that are made up of tangible and intangible goods 328

automobiles 185

40 Patents

Money management account 60

992 asets in total.

 

 

Liabilities

Accounts Payable and Warranty Provision 80

Provision for Doubtful Debts

Depreciation accumulated for property, plant, and equipment 48

120 borrowings

80 Debentures

Liabilities for both current and future taxes

Allowance for vacation days 18

90 retained earnings

Paid-out dividend is 25

502 total liabilities

Net worth: $1,494

 

 

Equity

Ordinary shares in the share capital total 490.

Equities totaled $1,004.

Additional details:

The directors of Kool Klothes Ltd. have informed you that they wish to disclose these sub-classifications in the notes and only report the minimum line items on the face of the statement in cases where AASB 101 requires entities to disclose additional sub-classifications of the minimum line items either on the face of the statement or in the notes.

Required:

Review the trainee accountant’s statement of financial position. To confirm that the statement of financial condition conforms with AASB 101’s criteria, discuss what adjustments or changes need to be made. When necessary, provide references to pertinent sections of the accounting standards in your responses. You do not have to negotiate any necessary note disclosures or create a new statement of financial condition.

Question 2: Marks assigned
Discuss any needed alterations or fixes.
(3) references
Total 15

Rationale

This assignment is meant to aid in your further development of some of the abilities and expertise that the accounting profession values and demands. You will be expected to perform duties that are comparable to those expected of a professional accountant working in the financial reporting industry. Accounting professionals need to make sure their expertise is up-to-date and they are aware of recent advancements. They must be able to recognise recent changes that could have an influence on their work and be aware of resources they can use to learn more about these changes.

You are required to summarise current advancements in financial reporting for this project. Consequently, this assignment enables you to:

learn how to spot and track down changes in accounting and reporting regulations to keep up with the professional knowledge needed for practice;
Learn about recent developments and shifts (both domestically and internationally) that may have an impact on laws and regulations for accounting and reporting now and in the future.
acquire the capacity to produce writing suitable for the accounting profession;
respect the knowledge’s limitations as it relates to technical financial reporting.

Your capacity will be evaluated by this task.

for reporting businesses, prepare the fundamental financial statements, and
Discuss changes and advances to the statutory and professional requirements that underpin published financial statements in depth and critically.