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Corporate Accounting

Assessment 1

Feb June 2014

MAJAN COLLEGE (UNIVERSITY COLLEGE) FACULTY OF BUSINESS MANAGEMENT STUDENT ASSIGNMENT COVER SHEET
Module Name Module Code Corporate Accounting AC 09-2 1 INDIVIDUAL

Assessment No. Assessment Type:


STUDENT MCUC NUMBER:

Please note that a grade will only be given to those whose student number is noted on this form. Please ensure that the student numbers from all group members are recorded accurately. Submission Date: MODULE TUTOR: 24/04/2014 Ikram Ul haq

DECLARATION The work contained in this assignment is my own and that all materials and sources used have been acknowledged. I/We have not copied or colluded in part or in whole, or otherwise plagiarised the work of other students. This assignment has not been submitted for previous assessment in any other subject or to a substantial extent has been accepted for the award of any other unit, module, degree or diploma of a university or any other institute, except where due acknowledgement is made in the text. I/We confirm that I/we have read, understood and followed the guidelines for assignment submission and presentation provided by the lecturer. I/We understand that this assignment may be retained on the database and used to make comparisons with other assignments in future. I/We have made a copy of my assignment This work may be photocopied and/or communicated for the purpose of identifying plagiarism. I/We give permission for a copy of this marked assignment to be retained by the faculty of Business Management for the purpose of course reviews by external examiners and to be used as a resource by Majan College. I/We understand that unauthorized late submission without a valid written extension will be marked as per the college policy mentioned in the students handbook page 18 section 18.5.

Ikram Ul haq -Majan College (University College)

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Corporate Accounting

Assessment 1 Corporate Accounting (AC 09-2) Level 2 Assessment one (Report) 50% weighting

Feb June 2014

Rockbuster is a conglomerate dealing in various industries. The company is faced with following issues while preparing financial statements for the year ending 31st December 2013; a) Rockbuster has recently purchased an item of earth moving plant at a total cost of Rials 24 million. The plant has an estimated life of 10 years with no residual value; however its engine will need replacing after every 5,000 hours of use at an estimated cost of Rials 7.5 million. The directors of Rockbuster intend to depreciate the plant at Rials 2.4 million (Rials 24 million/10) per annum and make a provision of Rials 1,500 (Rials 7.5 million/5,000 hours) per hour of use for the replacement of the engine. b) On 1 October 2013, Rockbuster acquired a newly constructed oil platform at a cost of Rials 30 million together with the right to extract oil from an offshore oilfield under a government licence. The terms of the licence are that Promoil will have to remove the platform (which will then have no value) and restore the sea bed to an environmentally satisfactory condition in 10 years time when the oil reserves have been exhausted. The estimated cost of this in 10 years time will be Rials 15 million. The present value of Rial 1 receivable in 10 years at the appropriate discount rate for Rockbuster of 8% is Rial 0.46. c) On 1 October 2013, Rockbuster also commenced the extraction of crude oil from a new well on the seabed. The cost of a 10 year licence to extract the oil well was Rials 50 million. At the end of extraction, although not legally bound to do so, Rockbuster intends to make good the damage the extraction has caused to the seabed environment. This intention has been communicated to parties external to Rockbuster. d) Rockbuster also sells sports goods and clothing through a chain of retail outlets. It offers customers a full refund facility for any goods returned within 28 days of their purchase provided they are unused and in their original packing. Sales in last 28 days of the trading year to 31 December 2013 were Rials 1,750,000. Generally 10% of customers come back to claim refund. e) On 15th January 2014 the companys auditors discovered a fraud in the material requisitions department. A senior member of staff who took up employment with Rockbuster in March 2013 had been authorizing payment for goods that had never been received. The payments were made to a fictitious company that cannot be traced. The member of staff was immediately dismissed. Calculations show that the total amount of the fraud to the date of its discovery was Rials 240,000. The company has contacted its insurers in respect of this fraud. Rockbuster is insured for theft, but the insurance company maintains that this is a commercial fraud and is not covered by theft clause in the insurance policy. Rockbuster has not yet had an opinion from its lawyers.

Ikram Ul haq -Majan College (University College)

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Corporate Accounting

Assessment 1

Feb June 2014

The company is applying International Financial Reporting Standards (IFRSs) for the first time and is not sure about the treatment of above in its financial statements. You are required to write a report to the Rockbuster explaining correct treatment of these issues as per IFRSs with explanation of relevant principles/rules from the applicable standard.

Required:

Your report should address the following points: a) Introduction, objective and recognition criteria of IAS 37 Provisions, Contingent assets and contingent liabilities. b) Analysis of the information given in view of provision recognition. c) Correct treatment of the issues highlighted with proper justifications making references to the relevant IFRS principles. d) Conclusion

You will be assessed on the following areas:

Grading Criteria Understanding/coverage of theoretical concepts Analysis of information and application of IAS 37 principles Recommendations. Language and clarity Completeness of tasks Information research & referencing (Harvard Style)

Max. Marks 20% 35% 20% 10% 5% 10%

Marks Given

Ikram Ul haq -Majan College (University College)

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Corporate Accounting

Assessment 1

Feb June 2014

GENERAL INSTRUCTIONS FOR THE ASSIGNMENT

1) 2) 3)

This is an individual assignment and carries a total of 50% weighting of the module grade. This assignment follows a report format. Your report should be word processed. The font should be Times New Roman. The font size should be 12 with 1.5 line spacing.

4) 5)

You are expected to attach the front sheet with full details.

Assignments should be submitted by 6 pm on the day of the deadline. There is a grace period until midnight to allow for technical difficulties, but any assignment submitted after this will be considered as a late submission. Technical problems will not be accepted as an excuse for a late submission.

6) 7)

You are expected to maintain an electronic copy and a paper copy of your assignment. The length of your assignment should be between 2000-2500 words. Please state the exact word count at the end of the assignment.

8) 9)

Your report should be well structured, with clear heading, contents page and page numbered. All sources of material should be fully referenced using Harvard Style of referencing. For details of Harvard referencing style refer the students hand book page 41, section 7.2. Any plagiarized work will be penalized. See the penalties in the students handbook page 37 section 29.

10)

11)

Unauthorised and late submission without a valid written extension from the module tutor will not be marked and will be awarded a grade G (0) irrespective of the quality of the work. See students handbook page 19 section 18.5.

12)

The electronic copy should be uploaded in MOVE within the specified date.

Ikram Ul haq -Majan College (University College)

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Corporate Accounting

Assessment 1

Feb June 2014

GRADING SYSTEM Although grades may be awarded on the basis of marks in some assessments, students should note that both marks and grades will be awarded on the basis of the assessment criteria for each grade.
GRADE A+ A GRADE POINT 16 15 Excellent A14 GENERAL ASSESSMENT CRITERIA DESCRIPTION D+ D D7 6 5 Pass An outstanding piece of work. Shows evidence of wider reading and originality Strongly analytical. All important points are covered. Arguments should be supported by examples and evidence, objectively presented and evaluated, Well structured and well written, without noticeable grammatical or other errors. Correctly referenced Very good work. All main points will have been covered, though minor issues may have been omitted. The work will be analytical, balanced and soundly based. Examples and supporting evidence should have been included. The writing should be essentially correct, without major grammatical or other errors. Generally referenced correctly. Generally good work. Most points will have been covered, but many finer points will generally have been missed. Shows limited reading. Arguments/analysis should be basically well structured and balanced with relevant examples, but with errors and gaps. The writing is clear, but has errors that nevertheless do not obscure the meaning. Referencing will be present but may at times be inaccurate or insufficient. Satisfactory. Shows sufficient grasp of the subject to be acceptable. Tends to be descriptive. Examples and evidence is likely to be weak and limited. Shows limited reading. Referencing is likely to be absent or very poorly carried out. Unsatisfactory/ Compostable fail. Serious errors and omissions. Very little analysis Work of a very poor standard with little relevant information and/or serious errors. Work containing little of merit No work submitted

B+ B

13 12 Very Good

B-

11

C+ C

10 9 Good

C-

E F FG

4 2 1 0

Refer

Fail

Ikram Ul haq -Majan College (University College)

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