ACCT19062: Lane Miller Case Study - Report Writing - Accounting Assignment Help

Assignment Task:

Objectives

This assessment item relates to the following unit learning outcomes:

• Interpret the technical requirements and conceptual aspects of selected accounting standards that address advanced issues in financial reporting.

• Exercise professional judgement to apply the requirements of relevant accounting standards and conceptual accounting knowledge to solve advanced accounting problems.

• Justify and communicate accounting advice and ideas in straightforward contexts to influence specialists and non-specialists.

• Reflect on performance feedback to identify and action learning opportunities and self-improvements.

Question 1

Lane Miller, who was recently appointed Chief Financial Officer of Midas Ltd, is considering utilising some excess funds to invest in the shares of Queen Ltd. Between 2015 and 2019, Queen Ltd has been performing very well and is expected to increase profits over the next three to four years. Queen Ltd has regularly paid dividends and is expected to pay dividends for the foreseeable future. There have been, in recent years some sales of inventory and non-current assets between Midas Ltd and Queen Ltd. Midas Ltd is also considering a proposal to lend some cash to Queen Ltd. The funds available would allow Midas Ltd to purchase 40% of the issued shares of Queen Ltd. Each share carries one vote at the company’s general meeting. Queen Ltd has 8 directors. Midas Ltd believes that several assets in Queen Ltd’s balance sheet are carried well below their fair value. Lane Miller has said that he thinks that such an investment would be measured at fair value with gains or losses on changes in fair value being taken through other comprehensive income. However, he has admitted that he is unfamiliar with these types of investments which is why he has requested some information about the applicable accounting requirements from you. Required Draft a memorandum for Lane Miller that explains the accounting requirements for the proposed investment. In particular you should explain how the profit of Queen Ltd would be recognised in Midas Ltd’s financial statements. Word limit: approximately 800 words.

Question 2

The latest versions of Australian accounting standards issued by the AASB are available on the AASB website: http://www.aasb.gov.au/Pronouncements/Current-standards.aspx.

Required

(a) Review the current accounting standards on the AASB website and select one accounting standard that is not examined in this unit (ACCT19061 Advanced Financial Accounting) or in ACCT19062 Intermediate Financial Accounting and which you consider might be important for you to have some knowledge about in your future role as a professional accountant.

(b) Use an internet search engine (for example, Google) to find two documents that you consider to be useful in gaining an understanding of the accounting standard. You do not need to include the documents with your answer, but you do need to include: name of document, author, date, and the link to the document. You should not include the accounting standard itself.

(c) Explain why these two documents would be useful to you in gaining an understanding of the accounting standard.