Assignment Requirements
Prepare your answer in report format (refer to Citewrite for help with this format) using footnote referencing only. Please note that reports need minimal referencing, only direct quotes need to be footnoted. Just be sure to include all your sources in the reference list.
Queensland University of Technology
Faculty of Business
School of Accountancy
AYN418 FINANCIAL ACCOUNTING 3
Semester 2, 2014
ASSIGNMENT
GWA International Ltd (GWA) is one of Australia’s largest designers, manufacturers, importers and distributors of household consumer products. The company was listed on the Australian Stock Exchange in May 1993 and employs more than 2500 staff throughout Australia and overseas.
GWA comprises six business divisions, Caroma, Dorf Clark, Dux, Gainsborough, Rover and Sebel, all of which are well-established businesses with strong brand names and market positions. Caroma toilets and Dorf bath tapware are among the most commonly known brand names in the Australian household. GWA has grown significantly since listing as a result of the strong operating performance of the businesses and successful acquisitions since the early 1990s and, in October 2004, the company was committed to growth through maximizing business performance and the pursuit of further appropriate domestic acquisition opportunities.
A press story appearing in October 2004 addressed the company’s need to consolidate the software systems of the various major companies within the expanding group (Woodhead, 2004, p.73). The expenditure of $12 million to be incurred over a period of five years would lead to ‘rolling out new software across the group after a series of acquisitions saddled the company with a raft of disparate platforms’. The group IT manager was quoted as saying that the decision to replace GWA’s current business software was made because the use of disparate technologies across the group’s business units was limiting its ability to provide ‘superior customer service’. It was indicated that GWA’s ‘maintenance and training requirements were also driving up costs’.
The first phase of the five-year project involved a ‘focus on rolling out general ledger and product and distribution management applications from business software maker Intentia to GWA’s Dux hot-water heater business’ . Further phases would include the implementation of Intentia’s advanced production management and supply chain management modules.
Required:
Discuss possible incentives motivating companies to make certain accounting policy choices. Illustrate with examples.
In light of the definition and recognition criteria of assets as per the Framework, discuss the appropriate accounting treatment of the expenditure of $12 million on new software systems.
Explain the implications for shareholders, managers and debt providers if the $12 million cost of ‘rolling out new software’ were recognized as expenses when it is assumed that the share price is positively correlated to future earnings; managers receive bonuses based on current earnings, and there are debt covenants limiting the interest expense to earnings ratio.
Word Limit; 1,200 words (excluding the index and reference list). This is a strict limit.
The assignment is marked out of 25 and comprises 25% of your overall marks for the semester. A detailed marking criteria sheet is attached and must be submitted with your assignment.
2 marks will be deducted if the criteria sheet is not attached.
Prepare your answer in report format (refer to Citewrite for help with this format) using footnote referencing only. Please note that reports need minimal referencing, only direct quotes need to be footnoted. Just be sure to include all your sources in the reference list.
The assignment has to be your own work and research to show your knowledge and understanding of the subject. Tutors will not be answering any questions regarding this assignment.
You need to submit the assignment through Safeassign and print and attach the Safeassign report.
3 marks will be deducted if the report is not attached.
Please note that submission through Safeassign does NOT constitute handing in your assignment on time. It MUST be physically handed in to Assignment Minder to be marked. Please refer to the QUT late assignment policy guidelines.
The assignment is due on 9 September at Assignment Minder by the time they close.
AYN 418 FINANCIAL ACCOUNTING 3 – ASSIGNMENT CRITERIA SHEET
STUDENT NAME: ……………………………………………… STUDENT NO:………………………….
(Please write name in block letters here. This sheet will be the first page of your assignment.)
CRITERIA
Unsatisfactory
0…1…2
Low Pass
3…4
Above average
5…6
Excellent
7…8
Discussion of possible incentives for making accounting policy choices with some examples
The report gave a limited discussion on incentives for accounting policy choice , there were no examples
The report gave a satisfactory discussion on incentives for accounting policy choice , there no satisfactory examples
The report gave a good discussion on incentives for accounting policy choice , there were satisfactory examples
The report gave a comprehensive discussion on incentives for accounting policy choice , there were excellent examples
/8
Unsatisfactory
0…1…2
Low Pass
3…4
Above average
5…6
Excellent
7…8
Discussion of the appropriate accounting treatment of the expenditure of $12 million on new software systems, in light of the definition and recognition criteria of assets as per the Framework, .
The report provided a limited discussion of the appropriate accounting treatment of the expenditure of $12 million on new software systems, in light of the definition and recognition criteria of assets as per the Framework
The report provided a satisfactory discussion of the appropriate accounting treatment of the expenditure of $12 million on new software systems, in light of the definition and recognition criteria of assets as per the Framework
The report provided a good discussion of the appropriate accounting treatment of the expenditure of $12 million on new software systems, in light of the definition and recognition criteria of assets as per the Framework
The report provided a comprehensive discussion of the appropriate accounting treatment of the expenditure of $12 million on new software systems, in light of the definition and recognition criteria of assets as per the Framework
/8
Unsatisfactory
0…1
Low Pass
2…3
Above average
4
Excellent
5…6
Explain the implications for shareholders, managers and debt providers
The report made a made a limited attempt to explain the implications
The report made a satisfactory attempt explain the implications
The report made a good attempt to explain the implications
The report thoroughly explained the implications
/6
Unsatisfactory
0
Low Pass
1
Above average
2
Excellent
3
Writing and presentation style in report format with footnote referencing
The report is not presented using the appropriate presentation style.
Sometimes, but not always consistently, the report is presented using the appropriate presentation style.
On most occasions, the report is presented using the appropriate presentation style.
The report has been presented using a consistent and appropriate presentation style.
/3
TOTAL
/25
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