Bachelor level Accounting case study

1 ACCT 2005 Financial Accounting 2 SP2 2017 FEE DBACK ON DRAF TS OF S TATEM EN T OF P ROF IT OR LO SS AN D OTHER COMP REHENSIVE INCOME I have now reviewed t he draft submissions and offer the following c omments/advice. These comments primarily f ocus on t he format (not actual calc ulat ions or t he treatment of s pecif ic events/transacti ons) and t hese c omments may, or may no t app ly, to ind ividu al st ud ent’s drafts. I have not provided comments regarding every error that occurred – only those that were noted for a number of st ud ents. I also realise that this is a ‘draft’ and no t the final product/assi gnme nt sub miss ion, so it may be that you alr eady intend to add ress some points that I rai se. First, cong ratulat ions are du e to many of yo u. It was clear t hat the majority of students who submitted a draft had f ollowed the instr ucti ons and r ead t he FAQ’s . I know that this was optional but it was disappointing that over 40% of students did not s ubmit a draft . To those students who did submit a draft, this means you are off to a good start! For those who ha ve not yet done so, PLEASE read the instruc tio ns and FA Qs carefully, and take time to review the assignment overview vid eo befo re you complete this assign me nt if you are to avo id a nu mber of common errors. For a number of drafts this stat eme nt was correctly formatted. However there were many which were not. I have provided below c omments on some comm on problems and a dvice. These comments have been numbered to allow for easy reference when completing the “Statement on Use of Draft Feedback” required with your final submission REMEMBER : EVEN IF YOU DID NOT S UBMIT THIS DRAFT OPT ION YOU WILL STILL N EED TO INCLUDE THIS STATEMENT ON USE OF DRAFT FEED BACK IN YOUR FINAL ASSIGN MENT ON THE ASSIGNMENT CO VER SHEET . IF YOU DO NOT , 5 MARKS WILL BE DEDUCT ED FROM YOUR FINAL A SSIGNMENT MARK . 1. It was disa ppointing t hat a nu mber of st ud ent’s stat eme nts were still formatted as in first ye ar courses and did not com ply with t he assi gnme nt instructi ons (e.g. some stud ents prese nted a fully classified s tateme nt with the analysis of expenses included in this (i.e. on the front of the statement) – the assign ment requ ired only those items required to be included in this statement . The only time add itional li nes should be used is w here it is a bsolutely necessary – e.g. expenses, excl uding fi nance costs or other income). 2. The assi gnme nt instructions explicit ly directed that only the required ( minimum) line items be includ ed in (i.e. on the front of) this sta tement. T his means: 2.1. If there is a choice to disclose the information in the statements or the notes , the disclosures need to be in the notes. For example, t he analysis of ex pense must be in the notes (no t in the statement ). Stud ents should NOT follow t he examples in AAS B 101 para 102 or 103 for this statement (these examples would a pp ly w here the analysis is includ ed in – on the front 2 of - the statement). 2.2. Ind ividu al expenses (such as COG S and other amo un ts such as depreciation expense ) s hould NOT be in (o n the front of) the stat ement. 2.3. Individual m aterial items of expense (or r eve nu e or other incom e) are discl osed in t he no tes; no t s epara tely on t he front of the statement . 2.4. A number of students split expenses into ‘expenses’ and ‘other expenses’ and /or ’loss’. This is not correct. Unless the expense is a finance cost or tax expense , then if an item is an expense you need to include in the line item for “expenses excluding finance costs ”. Please refer to the assignment instructions. There are also examples of statements with only the required line items on the front in y our topic review questions/activities. It was apparent that some students had simply ‘copied’ the items/format from model or actual reports. Such statements will not follow the assignment instructions and will therefore be heavily penalised. Further, reme mber we are assessing your ability to format statements and notes (not your ability to ‘copy’ or use a template). 3. You need a comparative column for this statement (some students had comparative columns with numbers. While you can ‘make up’ numbers, you can simply use ‘x’ in your comparative column in place of numbers). 4. Some students had a profit and loss statement – not a statement of profit or loss and other comprehensive income . 5. Th e instructions are clear that there are no items of other comprehensive income (see below): Please note: In this case study there are no items of other comprehensive income. In (on the front of) this statement you will need to include a line item for items of other comprehensive income however this will have a z ero balance (please refer to the answer to topic review questions of topic 2 for an example). 5.1. De spite this a nu mber of drafts had i nclud ed i tems as ‘other comprehensive income ’ items. This is c learly incorrect. If you did t his yo u nee d to re-assess where these items should be i nclud ed. 6. It is app arent that a nu mber of stud ents are still confused a bout what to includ e as ‘reve nu es’ and w hat to includ e as ‘other income ’ (i.e. i ncome items that are not reve nu e). 6.1. Look at the advice in the instructions about how to differentiate between revenues and other income (e.g. look at para 74 of the Framework) . Revenues are not limited to sales. 6.2. In this statement, a number of students split income into ‘revenue’ and ‘other revenue’. This is not correct. If an item is revenue then include it in revenues. If an item is not revenue then you will need to include as ‘other income’. Further some students split income into ‘revenue’ and ‘other income ’ and ‘gain’; again for this assignment you can only have a split between ‘reve nue’ and ‘other income ’ (gains would be a type of other income and therefore would be included with any other items of other income ). 3 6.3. Some stud ents includ ed a line item ‘Reve nu es’ in t heir stat eme nt and t hen i ncluded in brack ets aft er this the comp onents. In yo ur act ual a ssign me nt yo u cann ot includ e this extra information on t he front of the statement ; on ly in t he notes. 6.4. Some students incorrectly included sales revenue net (i.e. after deduction of cost of sales). 6.5. Sales returns are not an expense. 6.6. There we re also some stud ents confused a bout how to accoun t for the sale of non- current assets. In these drafts, the most common mistake was the treatment of the sale of non -current assets ; although a number of students did correctly calculate and present the impact from the sale of any non -current assets. Plea se refer to AAS B 101 para 34 (and to the examples in t he course materia ls). 7. Take care with fi nance costs. While some students had the correct finance costs amount, the re were many who did not. Plea se refer to the FA Q document about what is, and is no t, includ ed in these. Also think about what is ‘included’ as an expense; e.g. if there is interest accrued and/or paid during a period then this needs to be recognised , but the principal amount is already included in the statement of financial position and consider if any balance date adjustment is required . Further, as a FAQ states, finance costs would not include the range of items that you may have considered or class ified as ‘financial expenses’ in internal profit and loss statements in earlier courses . 8. Take care with trea tment of it ems. T hink about: 8.1. Can I i nclud e something as an extr aordinary item? 8.2. We do no t consider discontinu ed operat ions, revaluations or non -controlling interests in this course . 8.3. Should dividends be included in this statement ? 8.4. Cleary provisions are confusing some students. Think about the timing (and also relate this to definitions of expenses, income etc in framework). Think about what entries were processed when the original provision /expense was recognized . Think about what entry the company has processed when the case was settled/finalised? Remember all items of income/expense must be recognised in the period they occur. 8.5. Read the information carefully. It was clear that a few students had not (and this perhaps is understandable given that this draft may have been done in a hurry). For example, the expenses in (a) are already included in the amount of ‘ Expenses’ in the trial balance. Yet some students added all of the items listed in (a) to the amount of ‘ Expenses’ in their statement . 9. Where line items do not app ly to the company (such as share of profit/loss in as socia te, or disc ontinu ed operat ions) these should not be includ ed in t he statement. This would al so app ly to other statements such as the stat ement of fi nancial posit ion. For example, AAS B 101 para 54(f) requ ires biological assets to be sho wn in ( on the front) of the statement. H owever in t his case stud y the company has no such ass ets so this line item would not be i nclud ed. 10. There is no nee d to prov ide sta nd ard a nd para graph references for t he statements (this is only r equ ired f or the notes); althoug h we will not penali se stud ents who includ e these for the stat ements. 11. In t erms of ‘general’ formatting iss ues note the following (alt houg h I r ecogn ise that som e of 4 these yo u may intend to ‘fix’ prior to the final assi gn me nt sub mitted): 11.1. You will need a n appropriate company name in the header (title) of the statement , as well as indicating an appropriate date or period /year ending (remember from first year that this will differ between statements). 11.2. Do not confuse the date of authorisation of the financial report with the date the reporting period ends. 11.3. Be consist ent with r ound ing. 11.4. Take care with s pelling (I didn’t realise that ‘comprehensive ’ could be misspelt so many differ ent wa ys ) 11.5. Take care with ali gnme nt/justificati on and f onts – again be consiste nt. 11.6. Printing : I did not print these out but in a few cases it was apparent that the stat eme nt would not have printed properly on the page. Please ensure t hat this doe s not happ en with t he final assi gnme nt as the marker marks what is printed! Eit her print out before you sub mit or use the print preview fun ction to check this. Aca dem ic Integrity iss ues: 12. As you are no doub t aware from viewi ng your own T urnitin r eport, given t he nature of this draft (and t herefore high s imilariti es) it is diffic ult to determine if there have bee n a ny aca dem ic integrity issues in this draft from the Turnitin reports (the Turnitin reports will i dentify this in the final ass ign me nts as these are lar ger a nd t hu s the matches mo re me aning ful). 13. As this draft was restr icted to one statement few refe rencing iss ues we re able to be i dentifie d. Ho wever remember that the assi gnment instr ucti ons are ex plicit that yo u need to format these statements and t he notes yourself. It app eared t hat som e stud ents had i nclud ed ( particularly at the bottom of the stat ement) parts taken /copied fr om other s ources, such a s: “This stateme nt shou ld be read in conjunc tion with t he acco mpan ying no tes to the financ ial stateme nts” Su ch i nclusions are acceptable bu t you must reference them – som e stud ents had referenced a nd some had not. 14. Ot her inclusions (such as details re: earning s per share) are NOT requ ired in t his assi gn me nt and such inclusions will be penalis ed. As well as this, as it would be app arent that such inclusions must have been copied fr om other sources, if they are not adequ ately referenced they wou ld also constit ute plagiari sm, and w ould t hu s be referred to t he aca demic integrity officer. 15. A f ew stud ents had sca nn ed or includ ed their draft in a pict ure format in their docume nt or copied an object into the docum ent in a way that it is not electronically readable/searchable. T his is NOT acceptable for t he final assi gnme nt. As t he instr uctions state: The electronic sub mission for this assi gn ment mu st be in the form of either a PDF or Word do cum ent and mu st be in a readable format so th at it can be p rocessed via Turnitin. Un til a reada ble docum ent is sub mitted late pen alties will be a pplied. This means that you can not ‘scan’ any significant pa rts or all of this assignm ent or insert statem ents, notes or repo rts as pictures or the like (if ne cessary, you can insert graph ics, for example on the title pag e, as pictures and can scan the app endix only). 5 16. It also appear s that some repeating students may have used their previous assignment as a basis. However you should note that you may not be able to use your previous assignment – see information below : Can you use parts of your previous assignment if repeating this cou rse? 16.1. Only if yo u completed t his prev ious assig nme nt on an ind ividua l ba sis 16.2. If c ompleted in a group t hen this includ es the work of other stud ents 16.3. Under university policy it is misconduct to submit an assignment that includes the work of other students (i.e. students outside your current group submitting the assignment). Plea se no te that Turnitin will match to previous assi gnme nts. 17. Rem em ber also to review the information on academic int egrity in the assignment instruction booklet . You should not access other student’s assignments (either from previous study periods or this study period) nor allow other students to access your own work . As the instruction booklet states: You should note that in previous study periods a numb er of students received ZERO for this assignment as they had used other students work (from the same or previous study periods) as the basis for their own assignment. If you use another students assignment (e.g. from this or a previous study period) as a basis or ‘template’ for some/all and change for this case study you will be referred to the Academic Integrity officer and should expect to receive ZERO as a minimum penalty . I hope this document provides you with some useful information to consider in fi nalisi ng your assi gn me nts. I would STRO NGLY SUGGE ST that if yo u have no t alr eady done so, that yo u read t he assi gnm ent instr ucti ons and FA Q’s carefully , and also view the assignment overview video. Also, be aware that mistakes that have been explicitly noted in this document (for example, including Cost of sales on the front of the statement) will attract significant penalties if these mistakes occur in your final assignment. You should b e able to access your marks for this draft from Learnonline . A very few stud ents will not receive these bonu s marks as they did not comply with the instructi ons for this draft. In particular, stud ents will not receive these bonu s marks if:  They did not use or complete the specific template for this draft as requ ired.  Submitted the incorrect statement /document .  Did not include a draft of their work (i.e. just a blank statement or a statement with no numbers so not related to this case study ).  Sub mitted more than j ust a draft statement (e. g. includ ed notes or other information or other stat ements). Please do not be dishearten ed if you did not receive these marks due to not complying with the instructions. Treat this as an opportunity to learn. If you fail to follow the specific instructions for the assignment itself, you will lose many more marks. A number of students who did n ot submit the draft will no doubt achieve a high distinction grade in this assignment. If you have any questions about these you need to contact me via the course email ACCT2005 Enquiries ACCT2005.En [email protected] Please remember that s pecific feedb ack will no t be provided on i nd ividu al drafts. 6 IMPORTANT : Just beca use you re ceived 5/5 for t his draft does no t mean that yo ur draft (or nu mbers therein ) is c orrect. As stated a bove "These com me nts primari ly focus on t he format (no t act ual calc ulat ions or the tr eatme nt of specific eve nts/tra nsactions)". T here was a broad cross -section of statements - both correct and i ncorrect. R emem ber t his was a draft and so was no t expected to be completely correct. All that the 5 marks ind icate is that yo u s ubmitted a draft relati ng to this case study in ac cordance with t he instr ucti ons for this draft , no t that you r draft was in an y way correct. All the best with the completion of your assignments. Sue McGowan Course coordinator