Disclosure of Material Items of Income/Expense Report Writing - Accounting and Finance Assignment Help

Assignment Task:

Task:

QUESTION Can I include notes required by accounting standards other than those studied in first 5 topics (up to and including Provisions and Contingent Liabilities). ANSWER The answer is no. Whilst is it pleasing to see students considering more standards you are required to only consider those standards in those topics identified in the assignment instructions and should not consider other standards (even those in later topics) - so you should not add in notes relating to for example, AASB 112. Having said this you should note that, for example, AASB 101 has some requirements that do not specify exactly what items need to be disclosed, however these do indicate that additional information that is required - for example look at AASB 101 para 77 which requires further sub classifications; AASB 101 para 97 which requires disclosure of material items of income/expense... so although we may not consider other standards you need to consider whether the standards that we are applying (such as AASB 101) would require disclosure of (for example) subclassifications of particular items. I have restricted the standards to consider to ensure that the assignment is not too much work for students and also to ensure that I am fair to all students. To be fair in marking this assignment I need to ensure that all students have considered the same standards. Also a key purpose is to determine if students can read and apply the requirements of particular standards. By restricting the standards considered this allows me to better assess this. If you are looking at real or ‘model’ financial reports to assist you in this assignment, you should be aware that these will consider all of the accounting standards – many of which we do not consider at all in this course. I would suggest that to determine the notes required in this assignment you ‘work though’ the standards that are specified for this assignment to see what notes are required (given the information in this assignment) and then, if you wish, refer to actual or model reports for an example of how to prepare notes (although there are alternative formats for notes as accounting standards specify what needs to be disclosed but not necessarily ‘how’ in terms of format). You should not use the real or ‘model’ financial reports to determine what to include in (on the front of) statements or which notes are required for this assignment as these (as noted above) will consider other standards and have made choices about where to disclose information that do not follow the instructions for this assignment. Further these may not consider the version of standards we are applying. Remember- for each note that you include you need to identify the particular accounting standard (and the paragraph number) to justify the inclusion of that note. The standards you need to apply in this assignment are AASB 101, AASB 108, AASB 110, AASB 1054 and AASB 137.

QUESTION I am confused about what to adjust for – I am not sure what items I need to adjust in the trial balance. ANSWER It can be confusing. You need to read the information carefully. Remember in additional information it states: Note: Unless otherwise indicated the events and transactions outlined below have already been accounted for in the balances above. So unless it is indicated that NOT adjusted these events/transactions would have already been accounted for (and reflected in balances in the trial balance). However FA2 FAQ Annual Report Assignment Page 5 of 14 you may need to 'work' back to calculate the balances of some items (such as share capital and reserves) at the beginning of the period. Further you may need to adjust as particular events may not have been accounted for ‘correctly’ (e.g. not accounted for as required to be recognised or disclosed in accordance with the standards we are considering) in the trial balance. For example, think about how any sales of noncurrent assets need to be accounted for/presented in the financial statements. You need to take care about which items have already been accounted for and which have not.

QUESTION Is the amount of expenses incorrect as these do not seem to add up? ANSWER The assignment says that the amount of expenses in trial balance ‘includes’ the following items (such as auditors fees etc). You are correct - these amounts do not 'add up' to the total as the information in the question does not give details of all of these expenses but only some. So you have been given details of SOME of the items included in this but not all – so will have some ‘left’ that you can just say are ‘other expenses’. A simple example would be say had case where had $100 for expenses and was told that $40 was COGS and $20 salaries and $10 electricity - this would mean that have $30 of expenses that you do not have details of which you could call 'other expenses' or ‘miscellaneous’ expenses.

QUESTION I am confused about preparing directors reports etc – should I just copy what is in actual reports? ANSWER When you are preparing directors report etc it is useful to look at actual annual reports. However for the purposes of this assignment you are only required to include the minimum information/requirements for such reports as outlined in the Appendix to the assignment instructions. So for example, the Appendix identifies minimum requirements for Directors report - this includes names of directors so would need to include this – but you would not be required to include in this assignment information about the experience of directors etc (although this usually included in actual annual reports). However, if you include extra information in the Directors report you will not be penalised (and some information like this is often useful to users). Further the quality of your reports is affected by how you set out these reports, integrate case facts into these and discuss items –so marks here are also awarded for the quality of these reports. Whilst for the auditor’s report and directors declaration it could be acceptable to copy most of these (assuming referenced) as the directors report requires you to consider the information in relation to this particular case for its requirements simply copying this from actual reports would not be appropriatealthough you may find it useful to refer to some examples. Remember if you do copy will need to reference (with in text references including quotation marks where necessary etc).

QUESTION Should I present the analysis of expense by nature or function? ANSWER You will need to decide this – but it is doubtful whether you have enough information to present this analysis by function, so it is strongly recommended that you do this by nature and not function. Remember as per assignment instructions this analysis must be in the notes (and not in, on the front of, the statement).

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