UNIVERSITY OF BALLARAT

                              SCHOOL OF BUSINESS

                        BA603 CORPORATE ACCOUNTI...
2


The contents of this unit can be seen as roughly falling in three parts. The first part
is concerned with accounting i...
3


             Tutorials            1 x 1 hour tutorial per week.

Lectures:

New work and major concepts, ideas and iss...
4


Assessment

Assessment will be in accordance with Statute 5.3 Assessment outlined in Appendix
I on pages 285-290 of th...
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2.      Accuracy - This will be the primary criterion for assessing the computational
        and procedural tasks.

3...
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Supplementary Examination

Students may apply in writing for supplementary examinations in two types of
situations:

(...
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NOTE: Students must read the relevant chapter from the basic text and they are also
     encouraged to read at least...
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Week 4       Topic: Capital Reorganisation         Gaffikin et al. Ch. 11: RQ
Commencing   Reading:                 ...
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Week 9       Topic: Consolidation: Indirect           Gaffikin et al. Ch. 7: RQ 7.1,
Commencing   Outside Equity Int...
10


Students are required to attempt any ONE of the three assignment topics given
below.

Objective of Assignments:

The ...
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1.       Students must work in pairs and each pair (group) must submit one essay.
         Assignments attempted on a...
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Unit Description

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Unit Description

  1. 1. UNIVERSITY OF BALLARAT SCHOOL OF BUSINESS BA603 CORPORATE ACCOUNTING UNIT DESCRIPTION SEMESTER I, 2001 Author: Ram Karan - Lecturer and unit coordinator. Room B104 Telephone: (03) 53 279 414, Fax (03) 53 279 405 E-mail: r.karan@ballarat.edu.au Course: Bachelor of Commerce Prerequisite: BA507 Accounting Fundamentals. Corequisite: Nil Credit Points: 15 Aims of the Unit This unit is concerned with accounting practices and procedures applicable to corporations. It aims to provide students with an understanding of the theory and practice of corporate accounting with particular reference to statutory and professional financial reporting requirements. By studying real world examples, the unit also aims to develop an appreciation of the strengths and limitations of financial reporting as a vehicle for corporate governance. Specific Objectives On completion of this unit the student should: 1. be able to perform the accounting procedures relating to company accounting in accordance with statutory and professional requirements. 2. be able to analyse and explain the rationale behind the accounting procedures. 3. develop an awareness of some of the contentious issues relating to corporate financial reporting. 4. understand the strengths and limitations of financial reports as a source of information. 5. appreciate the importance of judgement to accounting and the need for ethical integrity. Unit Content and Main Concepts
  2. 2. 2 The contents of this unit can be seen as roughly falling in three parts. The first part is concerned with accounting issues which would be encountered in corporate accounting generally, such as corporate regulation, income tax, company reports and disclosures, company reorganisation, mergers and acquisitions. The second part is devoted to accounting issues relating to a special case of companies - ie groups of companies, where the preparation of consolidated financial statements becomes necessary. For this part both a knowledge of the mechanics of consolidation as well as an understanding of the conceptual issues relating to consolidations are necessary. The third and final section deals with some specialised corporate accounting issues such as equity accounting, accounting for joint ventures, accounting for company debt and liquidations and receiverships. Prescribed Texts: Gaffikin, M., Dagwell, R. and Wines, G. Corporate Accounting in Australia, 2nd ed., Sydney: University of New South Wales Press, 2001. Karan, R. BA603 Corporate Accounting Lecture Guide, University of Ballarat, 2001. Australian Society of Certified Practising Accountants and the Institute of Chartered Accountants in Australia, Accounting Handbook, Sydney: Prentice Hall, 2001. Other References: Australian Corporations Legislation, Sydney: Butterworths, 2001. (The Corporations Law - Highly recommended). Cotesta, P.V., Crosling, G.M. and Murphy, H.M. Writing for Accounting Students, Sydney: Butterworths, 1998. Duncan, K. and Irvine, J. Company Accounting Procedures, 7th ed., Sydney: Butterworths, 1999. Jubb, P., Haswell, S. and Langfield-Smith, I. Company Accounting, 2nd ed., Melbourne: Nelson ITP, 1999. Leo, K.J. and Hoggett, J.R. Company Accounting in Australia, 4th ed., Brisbane: John Wiley, 1999. Ma, R. , Parker, R.H. and Whittred, G. Consolidation Accounting, Melbourne: Longman Cheshire, 1991. Sims, M.A and Clift, R.C. Australian Corporate Accounting, Sydney: McGraw-Hill, 2001. Whittred, G., Zimmer, I. and Taylor, S. Financial Accounting: Incentive Effects and Economic Consequences, 4th ed., Sydney: Harcourt Brace, 1996. Contact Time: 3 hours per week Teaching Method Lectures 2 x 1 hour lectures per week.
  3. 3. 3 Tutorials 1 x 1 hour tutorial per week. Lectures: New work and major concepts, ideas and issues relating to the topic will be introduced in lectures each week. Students must note that lectures will provide information which is complementary to prescribed reading and tutorial exercises; they are not a substitute for systematic study. Since accounting practice tends to be guided by arbitrary concepts and principles, students need to read as widely as possible in order to formulate defensible arguments. Tutorials: In general, the subject matter covered in tutorials will lag lectures by one week. Apart from the materials set for the tutorials students are encouraged to raise questions which arise from lectures, readings and exercises. It is strongly recommended that students maintain an awareness of current events in business, particularly those relating to corporate governance and financial reporting, through reading the financial press. Remember that effective learning is an active rather than a passive activity. Students who devote sufficient time and effort on tutorial work may find less difficulty when attempting the end of semester examination. Student Work For all written work, students must ensure that they submit their own original work. All such work should demonstrate the student's ability to question and be dialectic in the approach to the accounting discipline. Submitting the work of others as their own, or copying or failing fully to acknowledge the source of ideas, concepts and quotations constitute unacceptable academic practice. Students will also be penalised for work that is poorly presented. Any work in illegible writing will be awarded a fail grade “XN”. The amount of work required of a student in this unit may vary slightly from week to week. On average students might expect to spend at least four hours per week, beyond their commitment to plenary sessions for this unit. Students experiencing any major difficulty with the subject should arrange an interview with the lecturer with a view to finding a solution to the problem.
  4. 4. 4 Assessment Assessment will be in accordance with Statute 5.3 Assessment outlined in Appendix I on pages 285-290 of the University of Ballarat Handbook 2001. The assessment for this unit will comprise the following: Test- (Week 6: Friday 6 April in T203 – Open Space, 1.30 pm – 2.30 pm) 20% Assignment 20% (Due -Week 10 - Monday 14 May at 10.00am) Final Examination 60% Total 100% Test: The test will be based on the lecture material covered in the first five weeks of the semester, which means that week six tutorial work will also be examinable. The test will consist of both theory and computational questions. Knowledge of accounting theory, statutory and professional reporting requirements and accuracy of computations and procedures will be the primary assessment criteria for the test. The test will be of 50 minutes duration and students will be allowed to take calculators into the examination hall. Examination: The end of semester examination (final examination) in this unit will be scheduled during the formal examination period of the University. Although all work covered in the semester will be examinable in the final examination, the emphasis will be on work not already examined in the test. Students should expect to be examined on both procedural and theoretical aspects of accounting. Accuracy in procedural work and informed discussion of theoretical issues will be the primary assessment criteria in the final examination. The examination will be of three hours duration, and students will be allowed to take calculators into the examination hall. Assessment Criteria: Student work will generally be assessed in terms of the following criteria: 1. Effectiveness of communication - ie readability, legibility, grammar, spelling, neatness, completeness and presentation will be a minimum threshold requirement for all written work submitted for assessment. Work that is illegible or incomprehensible and does not meet the minimum requirement will be awarded a fail grade.
  5. 5. 5 2. Accuracy - This will be the primary criterion for assessing the computational and procedural tasks. 3. Demonstrated understanding - This will be evidenced by the student's ability to be dialectical in the discussion of contentious issues. Few, if any, accounting concepts are scientific facts and stereotype answers will demonstrate poor understanding on the part of the student. 4. Evidence of research - This will be evidenced by the references made to the statutes, accounting standards, books, journal articles and inclusion of a bibliography. Note: 1. All written work must conform with the University of Ballarat General Guide for the Presentation of Academic Work. 2. For all written work students must ensure that they submit their own original work. Any act of plagiarism will be severely penalised. 3. Late assignments will be penalised at the rate of 10% of allocated marks for each day overdue (excluding weekends and public holidays). Grading Scale The approximate conversions between percentage marks and letter grades awarded for individual assessable tasks and in aggregate for the unit are shown below. HD High Distinction 80% - 100%* D Distinction 70% - 79% C Credit 60% - 69% P Pass 50% - 59% S Ungraded Pass UN Ungraded Fail MN Fail Level 1 40% - 49% NN Fail Level 2 0% - 39% XN Not Assessed * Note: All figures are expressed as notional percentages. Turnaround of Assessable Tasks Work submitted for assessment can be expected to be returned within 2-3 weeks.
  6. 6. 6 Supplementary Examination Students may apply in writing for supplementary examinations in two types of situations: (i) Where Attendance at Scheduled Examination is Prevented by Circumstances Beyond Control Where a student is prevented from appearing at a scheduled examination or test due to circumstances beyond her/his control, she/he may apply for a supplementary examination and provide explanation as to the nature of the circumstance supported with tenable evidence. If the application is successful, the supplementary examination will be conducted on or after the first working day the circumstance that prevented the student from sitting the examination or test in the first instance, is no longer applicable. There is no constraint on the grades that can be awarded to students sitting such supplementary examinations. (ii) Where a Student has Marginally Failed the Unit Supplementary examination for students who fail the unit will generally not be available in this unit. However, in exceptional cases, such supplementary examinations may be offered by special arrangement. To be eligible for such an examination, the student must demonstrate her/his commitment to the study of this unit. A tutorial attendance of at least 75% will be one indication of this commitment. The highest possible grade for students passing the unit by such supplementary examinations will be ‘P’. Requirement of Ethics Approval Before Collecting Data Students are not required or expected to do any surveying in this unit. The following information is provided for information only. Students who intend to survey or obtain information from other students, staff or persons outside the University as part of research for tutorial/class exercises or assessable tasks must check with their unit co-ordinator, lecturer or tutor before they do so. Students should read the documents ‘Ethical Practices in Social Research Surveys and ‘Ethical Principles in Human Experimentation: Information to Students (in the School of Business Undergraduate Handbook) which explain their rights and responsibilities. Where the research project could affect the interests of interviewees, ethics approval must be obtained from the University’s Human Research Ethics Committee. (Your lecturer or tutor will arrange this.) Some tutorial/class exercises or assessable tasks have been granted a block approval, provided certain procedures are undertaken. Where relevant, you will be advised by your unit co-ordinator, lecture or tutor what these procedures are. SEQUENCE OF LEARNING ACTIVITIES LECTURE TOPICS, READING PROGRAM AND TUTORIAL PREPARATION
  7. 7. 7 NOTE: Students must read the relevant chapter from the basic text and they are also encouraged to read at least one other reference from the list of readings under each topic. Week No. Lecture Topics and Reading Tutorial Preparation Week 1 Topic: Corporate Regulatory No tutorial this week. Devote Commencing Framework, Retained Profits, this time to preparation of 26 February Reserves and Income Distribution week 2 tutorials. Reading: Gaffikin et al. Ch. 1, p. 1-26; Ch. 2. Jubb et al. Ch. 1, Ch. 2. The Corporations Law, Ch. 2. Week 2 Topic: Accounting for Company Gaffikin et al. Ch. 1: RQ 1.1, Commencing Income Tax 1.2,1.4, 1.6, 1.9; Prob. 1.13; 5 March Reading: Ch. 2: RQ 2.2, 2.3, 2.5, 2.11, Gaffikin et al. Ch. 3. Prob. 2.15, 2.20. Jubb et al. Ch. 7; AAS 3, AASB 1020 Whittred et al. Ch. 6 Week 3 Topic: Disclosure Requirements and Gaffikin et al. Ch. 3: RQ 3.1, Commencing Company Reports 3.2, 3.5, 3.6, 3.7; Prob. 3.8, 13 March Reading: 3.11, 3.18. (Monday 12 Gaffikin et al. Ch. 11. March – Jubb et al. Chs. 3, 11,12. Labour Day The Corp. Law, Part 3.6, Schedule Holiday) 5 (repealed). AASB1001, AASB1002, AASB1004, AASB1018, AASB1034, AASB1035.
  8. 8. 8 Week 4 Topic: Capital Reorganisation Gaffikin et al. Ch. 11: RQ Commencing Reading: 11.1, 11.2, 11.5, 11.7, 11.9, 19 March Gaffikin et al. Ch. 13. 11.12, 11.13; Prob. 11.14, Jubb et al. Ch. 10. 11.18, 11.20, 11.21. Clift & Sims, Ch. 6. Week 5 Topic: Acquisition of Assets Gaffikin et al. Ch. 13: RQ Commencing Reading: 13.1, 13.2, 13.4, 13.9; Prob. 26 March Gaffikin et al. Ch. 4. 13.10, 13.13, 13.15, Ex. Jubb et al. Ch. 9. 13.19. AASB1015. The Corporations Law Ch. 6. Week 6 Topic: Group Structures and Gaffikin et al. Ch. 4: RQ 4.1, Commencing Consolidated Accounts 4.2, 4.5, 4.6, 4.7, 4.9, 4.10; 2 April Reading: Prob. 4.15, 4.18, 4.19. Gaffikin et al. Ch. 5. Jubb et al. Ch. 16. Ma et al. Chs. 1, 2, 3. Week 7 Topic: Consolidation: Inter- Gaffikin et al. Ch.5: RQ 5.1, Commencing Company Transactions 5.2, 5.4, 5.7, 5.10, 5.11, 5.12; 9 April Reading: Prob. 5.15, 5.17, 5.19, 5.20. Gaffikin et al. Ch. 6. Jubb et al. Chs. 17, 18. Ma et al. Chs. 4, 5. AASB1024 16 April - 27 April LECTURE BREAK Week 8 Topic: Consolidation: Outside Equity Gaffikin et al. Ch. 6: RQ 6.2, Commencing Interest 6.3, 6.4, 6.5, 6.6; Prob. 6.10, 30 April Reading: 6.12, 6.15, 6.20. Gaffikin et al. Ch. 7. Jubb et al. Ch. 19 Ma et al. Ch. 6. AASB1024.
  9. 9. 9 Week 9 Topic: Consolidation: Indirect Gaffikin et al. Ch. 7: RQ 7.1, Commencing Outside Equity Interest 7.2, 7.4, 7.5; Prob. 7.8, 7.10, 7 May Reading: Ex. 7.14. Gaffikin et al. Ch. 8 Jubb et al. Ch. 21 Jager et al. Ch. 14. AASB1024. Week 10 Topic: Accounting for Investment in Gaffikin et al. Ch. 8: RQ 8.1, Commencing Associated companies 8.2, 8.3, 8.4; Prob. 8.5, 8.6. 14 May Reading: Gaffikin et al. Ch. 9. Jubb et al. Chs. 24, 25. Ma et al. Ch. 9. AASB1016. Week 11 Topic: Accounting for Interests in Gaffikin et al. Ch. 9: RQ 9.1, Commencing Joint Ventures 9.2, 9.3, 9.4, 9.5; Prob. 9.9, 21 May Reading: 9.14, 9.15. Gaffikin et al. Ch. 10. Jubb et al. Ch. 26. Ma et al. Ch. 10. AASB1006. Week 12 Topic: Accounting for Company Gaffikin et al. Ch 10: RQ Commencing Debt 10.1, 10.2, 10.9, 10.10, 28 May Reading: Prob. 10.15, 10.17,10.19 Gaffikin et al. Ch. 1, pp.27-30. Jubb et al. Ch. 5. Whittred et al. Ch. 5. AASB1014. Week 13 Topic: External Administration and Gaffikin et al. Ch. 1: RQ 1.10; Commencing Accounting for Liquidations Prob. 1.21, 1.22. 4 June Reading: Gaffikin et al. Ch 12: RQ Gaffikin et al. Ch. 12. 12.1, 12.3; Prob. 12.5, 12.9. Jubb et al. Chs. 13, 14, 15. 12 June - 15 June Swot Vac 18 JUNE - 29 JUNE EXAMINATIONS ASSIGNMENT
  10. 10. 10 Students are required to attempt any ONE of the three assignment topics given below. Objective of Assignments: The assignments are aimed at developing and testing students' understanding of recent developments in corporate accounting and financial reporting obligations of entities under the Corporations Law 1989 (Cth). They also aim to develop an understanding of the strengths and limitations of mandatory reporting requirements and explore ways to overcome any limitations in the corporate financial reporting regime. Topic 1: Share Buy-Backs Before 1989, Australian companies were not permitted to buy-back their own shares. However, this is now permitted by the Corporations Law (ss257A-257J), albeit with several restrictions. Required: Write a well researched essay explaining the rationale and implications of the change in legislation permitting share buy-backs in Australia. Include in your discussion the current restrictions and procedures relating to share buy-backs and support your arguments with real world examples. Topic 2: No Par Value Shares Following the passage of the Company Law Review Act 1998 (Cth) shares of a company in Australia have no par value. Required: Write a well researched essay explaining the rationale and implications of the change in legislation permitting shares with no par values. In particular, explain how this change in legislation has affected accounting for company equity and disclosure. Use real world examples to illustrate your points. Topic 3: Half-Year Reports Since July 1994, certain entities in Australia have been required to produce half-year reports under the Corporations Law. Required: Write a well researched essay explaining the rationale and implications of the requirement to produce half-year reports. Give particular attention to the types of entities that are affected by this requirement and the purpose this requirement is to serve. Use real world examples to illustrate your points. Other Requirements:
  11. 11. 11 1. Students must work in pairs and each pair (group) must submit one essay. Assignments attempted on an individual basis without prior approval from the lecturer may be penalised by deducting up to 25% of possible marks (5 out of 20) from the marks earned. If more than two students attempt the assignment as a group, marks will be awarded to only the first two students named on the assignment. 2. Your essay must not exceed 2000 words in length. 3. On average, each student may need to spend about twenty hours on this assignment. 4. Your work must be well referenced and a bibliography provided at the end of the essay. 5. Due Date: Week 10 - Monday 14 May, 10.00 am. What are you expected to do for this assignment? (i) Conduct a literature search on your chosen topic. (ii) Demonstrate an in-depth understanding of the topic. (iii) Use real world examples to illustrate your points. Attach copies of media reports, cases etc to the assignment. (iv) Demonstrate knowledge of recent developments on your topic as reported in the financial press. (v) Demonstrate an understanding of the debate on this topic in academic and professional journals. (vi) Write a concise and articulate essay. (vii) Provide a comprehensive bibliography. (viii) Provide an abstract to the essay. ASSESSMENT CRITERIA Your work will be assessed in terms of the above expectations and the assessment criteria shown on pages 4-5 of this document. …………………………………………….

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