BAO3309 Advanced Financial Accounting

Questions: ObjectivesThis 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 Angela Kirk, the newly appointed Chief Executive Officer of Wakefield Ltd, is considering an investment in the shares of Hobson Ltd. Over the past five years, Hobson Ltd has been very profitable and profits are expected to increase over the next three to four years. The investment would involve purchasing between 5% and 70% of Hobson Ltd’s issued shares. Each share carries one vote at the companies general meeting. Because Angela Kirk is unfamiliar with these types of investments, she has requested some information about the applicable accounting requirements from you. RequiredDraft a memorandum that explains the accounting requirements for the proposed investment. You should also explain, depending on how the investment is accounted for, how the profit of Hobson Ltd would be recognised in Wakefield Ltd’s financial statements. Question 2The 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. (c) Explain why these two documents would be useful to you in gaining an understanding of the accounting standard.