201012 - Report For Real Estate Investment Trust (REIT) - Financial Statements & Intangibles Contracts - Accounting Assignment Help

    Assignment Task-

Overview

The written assignment submission familiarizes students with fundamental hallmarks of a particular method of financing with reference to general investment vehicle types across an industry segment.

Details

Assume that you are required to make funding arrangements (i.e. raise capital) for an Australian Real Estate Investment Trust (REIT) which is required to fund a new acquisition (thinking of buying another property) valued at AUD$1 billion. In relation to this proposition, you are required to undertake the following tasks.

Obtain a copy of a recently published Annual Report for any REIT listed on the Australian Securities Exchange (ASX). Annual company reports are public documents and are easy to access. You can also obtain additional information from the university’s Library e- Resources/A-Z Resource List: D/ DatAnalysis Premium.

Examine the overall report, concentrating on the financial statements and notes provided. Comment on your impression of their usefulness to potential “non-accounting” end users. In addition, discuss the company’s treatment of important accounting issues related to the property industry, including depreciation, impairments, revaluation, intangibles and construction contracts.

Analyse the financial statements and establish the current (existing) capital structure of your selected REIT. In other words, establish the composition of the sources of funds that goes to make up the current capital structure of the trust. Establish how much equity and how much is debt, as in percentage of the total value. Also see if funds from other sources are utilised. After establishing the capital structure, calculate the current weighted average cost of capital (WACC) of the trust. Use the methods in the notes to calculate the WACC. Have regard to current interest rates for estimating cost of debt and return on shares for estimating cost of equity capital. The focus is on approach rather than the actual accuracy of the figures.

Discuss and decide how your trust should fund its proposed acquisition. Should it raise debt, equity or a mixture of both? Then establish the ratio of each (if applicable) or should the trust utilise funds from any alternative sources. What instruments should be used to raise funds?

Students must make sure that the annual report is included together with your assignment.

Assignment Requirements

All supporting documents must be submitted electronically via the Dropbox. The main report must be submitted into Turnitin.

Although there is no page limit, this assignment should not exceed 1,800 words with using 12 points font size and 1.5 spacing.

The submission of the soft copy assignment must be accompanied by a signed assignment cover sheet and the soft copies of all related files.

For the avoidance of doubt, although referencing and acknowledgements will be reflected in a marking schedule, failure to reference and acknowledge will lead to automatic failure of the assignment with a 0 mark. Late submission will be penalized in accordance with School policy at the rate of 10% of awardable marks per day or part of day late.

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