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HOLMES INSTITUTE
FACULTY OF HIGHER EDUCATION |
| Assessment Details and Submission Guidelines
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| Trimester | T1 2019 |
| Unit Code | HI6025 |
| Unit Title | Accounting Theory and Current Issues |
| Assessment Type | Group Assignment |
| Assessment Title | Accounting for Lease: A Critical Review |
| Purpose of the assessment (with ULO
Mapping) |
Students are required to critically examine the Australian accounting standard for lease financing AASB 16. They will have to do research on relevant literature and demonstrate understanding and critical evaluation of key issues such as the drawbacks of the previous lease standard, why was the change necessary, what changes have been incorporated in the new accounting standard for lease AASB 16. They will also need to conduct a minor empirical research (on a specified company) on accounting for leases. (ULO 1, 2, 3, 4, 5, 6, 7) |
| Weight | 30 % of the total assessments |
| Total Marks | 30 |
| Word limit | 3,000 words ± 500 words |
| Due Date | Group Formation: Registration of groups/Submission of group member’s name:
before 5:00 pm Friday, Week 7. Please form the group and submit the name and ID of your group members to your lecturer in the class before 5:00 pm Friday, Week 7. There should be minimum 3 and maximum 5 members in a group.
Assignment submission: Final Submission of Group Assignment: 11:59 pm Sunday, Week 10
Late submission incurs penalties of five (5) % of the assessment value per calendar day unless an extension and/or special consideration has been granted by the lecturer prior to the assessment deadline. |
| Submission Guidelines | • All work must be submitted on Blackboard by the due date along with a completed Assignment Cover Page.
• The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2 cm margins on all four sides of your page with appropriate section headings and page numbers. • Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Harvard referencing style.
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Group Assignment T1 2019
Assignment Specifications
Purpose:
This assignment aims at developing a clear understanding of students on Accounting standard for lease. Students are required to critically examine the new accounting standard for lease financing AASB 16. They will have to do research on relevant literature and demonstrate understanding and critical evaluation of key issues and different provisions on accounting standard for lease financing. They will have to refer and base their discussions on a complete understanding of AASB 16 Accounting for Leases.
Required Task: In the body of the assignment, students will have to critically discuss the following issues:
- Critical evaluation of the old accounting standard for lease (AASB 117) specifically highlighting the drawbacks
- Why was the change necessary?
- What changes have been incorporated in the new accounting standard for lease AASB 16?
- How will companies that have significant level of lease financing be affected by the change in the accounting standard for lease?
- In the former accounting standard for lease (AASB 117) both operating lease and finance lease were allowed, why did companies have a tendency to classify most of the lease contract as operating lease? How does positive accounting theory relate to this behaviour of managers?
- According to the IASB, the implementation of IFRS 16 (the IFRS version of AASB 16) is expected to improve comparability between companies that lease assets and companies that borrow to buy assets. Explain this view of the IASB with suitable example.
- The implementation of AASB 16 might have an effect on the leasing market if companies decide to buy more assets and as a result, lease fewer assets. Provide possible explanation as to why after the implementation of AASB 16, reporting entities might be more likely to buy more assets and lease fewer assets.
- Select the latest (2017 – 2018 financial year) annual report of an ASX listed company. Summarise the key disclosures the company has made on its accounting for leases including on the transitional provision and effect of the transition to AASB 16 from AASB 117.
Assignment Structure should be as the following:
Abstract (one paragraph)
Table of Content
Introduction
Body of the assignment with detailed answer on each of the required tasks
Summary/Conclusion
List of references
…..
Marking criteria:
| Marking criteria | Weighting |
| Abstract | 1.5% |
| List of content & overall presentation of the assignment | 1% |
| Introduction | 1.5% |
| Critical evaluation of the old accounting standard for lease specifically highlighting the drawbacks | 3% |
| Why was the change necessary? | 2% |
| What changes have been incorporated in the new accounting standard for lease AASB 16? | 2% |
| How will companies that have significant level of lease financing be affected by the change in the accounting standard for lease? | 2% |
| In the former accounting standard for lease (AASB 117) both operating lease and finance lease were allowed, why did companies have a tendency to classify most of the lease contract as operating lease? How does positive accounting theory relate to this behaviour of managers? | 2% |
| According to the IASB, the implementation of AASB 16 is expected to improve comparability between companies that lease assets and companies that borrow to buy assets. Explain this view of the IASB with suitable example. | 3% |
| The implementation of AASB 16 might have an effect on the leasing market if companies decide to buy more assets and as a result, lease fewer assets. Provide possible explanation as to why after the implementation of AASB 16, reporting entities might be more likely to buy more assets and lease fewer assets. | 2% |
| Select the latest (2017 – 2018 financial year) annual report of an ASX listed company. Summarise the key disclosures the company has made on its accounting for leases including on the transitional provision and effect of the transition to AASB 16 from AASB 117. | 5% |
| Conclusion | 2.5% |
| References | 2.5% |
| TOTAL Weight | 30% |
MARKING RUBRIC
| Excellent | Very Good | Good | Satisfactory | Unsatisfactory
|
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| Critical evaluation of the old accounting standard for lease specifically highlighting the drawbacks | Demonstration of outstanding knowledge – beyond requirements- on
the topic
Extensive relevant research
Independent and in-depth analysis;
Issues and factors are presented and analyzed in a logical manner;
Broad and credible sources of references have been cited using a proper referencing style. |
Demonstration of very good knowledge on
the topic
Substantial relevant research
Issues are discussed adequately based on sufficient research;
Adequate references in proper referencing style. |
Demonstration of good knowledge on
the topic
Adequate relevant research
Discussed the issue based on some research and facts. Scopes for improvement remain.
Adequate references in proper referencing style. |
Demonstration of basic knowledge on
the topic
Some relevant research
Meet the requirements but with limited information and discussion, the answer is the bare minimum;
Limited references. |
Demonstration of poor knowledge on the topic.
Limited and/or no relevant research
The answers do not meet the basic requirement. No factual discussion has been provided;
No reference. |
| Why was the change necessary? | Demonstration of outstanding knowledge – beyond requirements- on
the topic
Extensive relevant research
Independent and in-depth analysis;
Issues and factors are presented and analyzed in a logical manner;
Broad and credible sources of references have been cited using a proper referencing style. |
Demonstration of very good knowledge on
the topic
Substantial relevant research
Issues are discussed adequately based on sufficient research;
Adequate references in proper referencing style. |
Demonstration of good knowledge on
the topic
Adequate relevant research
Discussed the issue based on some research and facts. Scopes for improvement remain.
Adequate references in proper referencing style. |
Demonstration of basic knowledge on
the topic
Some relevant research
Meet the requirements but with limited information and discussion, the answer is the bare minimum;
Limited references. |
Demonstration of poor knowledge on the topic.
Limited and/or no relevant research
The answers do not meet the basic requirement. No factual discussion has been provided;
No reference. |
| What changes have been incorporated in the new accounting standard for lease AASB 16? | Demonstration of outstanding knowledge – beyond requirements- on
the topic
|
Demonstration of very good knowledge on
the topic
Substantial relevant research |
Demonstration of good knowledge on
the topic
Adequate relevant research |
Demonstration of basic knowledge on
the topic
Some relevant research
|
Demonstration of poor knowledge on the topic.
Limited and/or no relevant research
|
| Extensive relevant research
Independent and in-depth analysis;
Issues and factors are presented and analyzed in a logical manner;
Broad and credible sources of references have been cited using a proper referencing style. |
Issues are discussed adequately based on sufficient research;
Adequate references in proper referencing style. |
Discussed the issue based on some research and facts. Scopes for improvement remain.
Adequate references in proper referencing style. |
Meet the requirements but with limited information and discussion, the answer is the
bare minimum;
Limited references. |
The answers do not meet the basic requirement. No factual discussion
has been provided;
No reference. |
|
| How will companies that have significant level of lease financing be affected by the change in the accounting standard for lease? | Demonstration of outstanding knowledge – beyond requirements- on
the topic
Extensive relevant research
Independent and in-depth analysis;
Issues and factors are presented and analyzed in a logical manner;
Broad and credible sources of references have been cited using a proper referencing style. |
Demonstration of very good knowledge on the topic
Substantial relevant research
Issues are discussed adequately based on sufficient research;
Adequate references in proper referencing style. |
Demonstration of good knowledge on the topic
Adequate relevant research
Discussed the issue based on some research and facts. Scopes for improvement remain.
Adequate references in proper referencing style. |
Demonstration of basic knowledge on the topic
Some relevant research
Meet the requirements but with limited information and discussion, the answer is the bare minimum;
Limited references. |
Demonstration of poor knowledge on the topic.
Limited and/or no relevant research
The answers do not meet the basic requirement. No factual discussion has been provided;
No reference. |
| In the former accounting standard for lease (AASB 117) both operating lease and finance lease were allowed, why did companies have a tendency to classify most of the lease contract as operating lease? How does positive accounting theory relate to this behaviour of managers? | Demonstration of outstanding knowledge – beyond requirements- on
the topic
Extensive relevant research
Independent and in-depth analysis;
Issues and factors are presented and analyzed in a logical manner;
|
Demonstration of very good knowledge on
the topic
Substantial relevant research
Issues are discussed adequately based on sufficient research;
Adequate references in proper |
Demonstration of good knowledge on
the topic
Adequate relevant research
Discussed the issue based on some research and facts. Scopes for improvement remain.
Adequate references in |
Demonstration of basic knowledge on
the topic
Some relevant research
Meet the requirements but with limited information and discussion, the answer is the bare minimum;
Limited references. |
Demonstration of poor knowledge on the topic.
Limited and/or no relevant research
The answers do not meet the basic requirement. No factual discussion has been provided;
No reference. |
| Broad and credible sources of references have been cited using a proper referencing style. | referencing style. | proper referencing style. | |||
| According to the IASB, the implementation of AASB 16 is expected to improve comparability between companies that lease assets and companies that borrow to buy assets. Explain this view of the IASB with suitable example. | Demonstration of outstanding knowledge – beyond requirements- on
the topic
Extensive relevant research
Independent and in-depth analysis;
Issues and factors are presented and analyzed in a logical manner;
Broad and credible sources of references have been cited using a proper referencing style. |
Demonstration of very good knowledge on the topic
Substantial relevant research
Issues are discussed adequately based on sufficient research;
Adequate references in proper referencing style. |
Demonstration of good knowledge on the topic
Adequate relevant research
Discussed the issue based on some research and facts. Scopes for improvement remain.
Adequate references in proper referencing style. |
Demonstration of basic knowledge on the topic
Some relevant research
Meet the requirements but with limited information and discussion, the answer is the bare minimum;
Limited references. |
Demonstration of poor knowledge on the topic.
Limited and/or no relevant research
The answers do not meet the basic requirement. No factual discussion has been provided;
No reference. |
| The implementation of AASB 16 might have an effect on the leasing market if companies decide to buy more assets and as a result, lease fewer assets. Provide possible explanation as to why after the implementation of AASB 16, reporting entities might be more likely to buy more assets and lease fewer assets. | Demonstration of outstanding knowledge – beyond requirements- on
the topic
Extensive relevant research
Independent and in-depth analysis;
Issues and facts are presented and analyzed in a logical manner;
Broad and credible sources of references have been cited using a proper referencing style. |
Demonstration of very good knowledge on
the topic
Substantial relevant research
Issues are discussed adequately based on sufficient research;
Adequate references in proper referencing style. |
Demonstration of good knowledge on
the topic
Adequate relevant research
Discussed the issue based on some research and facts. Scopes for improvement remain.
Adequate references in proper referencing style. |
Demonstration of basic knowledge on
the topic
Some relevant research
Meet the requirements but with limited information and discussion, the answer is the bare minimum;
Limited references. |
Demonstration of poor knowledge on the topic.
Limited and/or no relevant research
The answers do not meet the basic requirement. No factual discussion has been provided;
No reference. |
| Select the latest (2017 – 2018 financial year) annual report of an
ASX listed company. |
Demonstration of outstanding knowledge – beyond requirements- on the topic | Demonstration of very good knowledge on
the topic
|
Demonstration of good knowledge on
the topic
|
Demonstration of basic knowledge on
the topic
|
Demonstration of poor knowledge on the topic.
Limited and/or no relevant research |
| Summarise the key disclosures the company has made on its accounting for leases including on the transitional provision and effect of the transition to AASB 16 from AASB 117. |
Extensive relevant research
Independent and in-depth analysis;
Issues and facts are presented and analyzed in a logical manner;
Broad and credible sources of references have been cited using a proper referencing style. |
Substantial relevant
research
Issues are discussed adequately based on sufficient research;
Adequate references in proper referencing style. |
Adequate relevant
research
Discussed the issue based on some research and facts. Scopes for improvement remain.
Adequate references in proper referencing style. |
Some relevant
research
Meet the requirements but with limited information and discussion, the answer is the bare minimum;
Limited references. |
The answers do not meet the basic requirement. No factual discussion has been provided;
No reference. |