Accounting assignment

ACCT2060 Accounting for Organisations and Society

Individual Assignment Semester 1, 2014

This assignment, which is worth 20% of the total assessment for this course, is based on the consolidated financial statements of ALS Limited, a company listed on the Australian Securities Exchange. You will need to access the 2013 annual report for ALS Ltd, available at ‘Assessment’ on the course Blackboard site, to complete this assignment.

The assignment is comprised of 7 questions, each of which is presented as 2 alternative versions – (a) and (b). You are required to answer only one version of each question – either (a) or (b). The version you are required to answer for each question will depend on your 7-digit RMIT student ID. Question 1 is represented by the first digit of your RMIT student ID. If the first digit of your RMIT student ID is an odd number (that is, 1, 3, 5, 7 or 9) then you must answer Question 1(a). If the first digit of your RMIT student ID is an even number (that is, 2, 4, 6, 8 or 0), then you must answer Question 1(b). Question 2 is represented by the second digit of your RMIT student ID. If the second digit of your RMIT student ID is an odd number (that is, 1, 3, 5, 7 or 9) then you must answer Question 2(a). If the second digit of your RMIT student ID is an even number (that is, 2, 4, 6, 8 or 0), then you must answer Question 2(b). The same process will be followed to determine which versions of Questions 3, 4, 5, 6 and 7 you will be required to answer. In this way, your RMIT student ID will determine the structure of your assignment. For example, if your RMIT student ID is 3456137, then you will be required to answer Questions 1(a), 2(b), 3(a), 4(b), 5(a), 6(a) and 7(a) to complete this assignment. NOTE CAREFULLY: If you submit the incorrect version (according to your RMIT student ID) of any assignment question, it will not be marked and you will be awarded zero for that question. If you are unsure of the correct versions of the assignment questions that you are required to answer, please ask your lecturer or tutor for help in determining these.

You must also adhere to the following requirements in completing this assignment:

· Your assignment must be appropriately referenced using the Harvard Style referencing system. Both in-text citations, as well as a reference list at the end of your assignment, are required. You should refer to the referencing guidelines provided at https://www.dlsweb.rmit.edu.au/bus/public/referencing/index.html

· Note that when citing an annual report, either by paraphrasing or using direct quotes, you must reference the annual report (in your reference list) according to the following format: Name of company. (Year of publication) Title of annual report (in italics). Place of publication: Publisher.

(To cite an annual report you will generally have to use the organisation’s name, as an author name is usually not present.)

Penalties for inadequate or incorrect referencing will apply.

· This assignment is to be completed as an individual assignment. All electronically submitted assignments will be automatically forwarded to Turnitin and subjected to an assessment of authenticity/originality, so please ensure your submission is your own individual work – severe penalties will apply for work that is not original/individual. Please refer to the Academic Integrity presentation available at ‘Assessment’ on the course Blackboard site.

· Do not include the wording of the assignment questions in your submission – if you do so, Turnitin will recognise this as plagiarism.

· Your assignment must be submitted electronically (via the course Blackboard site, at ‘Assessment’) by the due date. Late submissions will be marked as if submitted on time, then the mark awarded will be reduced by 10% (of total available marks) for each day or part-day that the assignment is late. For example, if your assignment is one day late then you will be penalised 10% of 20 marks which is 2 marks. Assignments that are late by 7 days or more will not be marked and will be awarded zero unless a formal extension of time has been granted.

· Extensions of time will only be granted in cases of exceptional and genuine hardship (which does not include inconvenience, poor planning, pressure from work or work commitments), and all applications must be accompanied by appropriate documentation. Applications for extensions of 7 calendar days or less (from the original due date) should be made via the Application for Extension of Time for Submission of Assessable Work form and forwarded to the Course Convenor (at [email protected]) at least one working day before the due date for submission. Applications for extensions of more than 7 days should be made (on-line) at least 2 working days prior to the due date using the Special Consideration process.

· A hard copy submission may also be required. Please discuss this with your local lecturer.

Individual Assignment – ALS Limited

Note: This assignment is scored out of 30 marks and will be scaled to a mark out of 20.

REQUIRED:

Refer to the 2013 annual report for ALS Ltd and answer the appropriate version – either (a) or (b) as determined by your RMIT student ID – of the following questions.

(Note: You will not be able to obtain all answers from the annual report, itself. You will need to refer to other sources (such as your textbook or other books) as well.)

Question 1(a) – 3 marks

· What was the previous name of ALS Ltd. and when did this name change occur? (1 mark)

· What was the reason behind the name change? (1 mark)

· What are the four global business divisions of ALS Ltd? (1 mark)

or

Question 1(b) – 3 marks

· Describe the principal activities of ALS Ltd. (1 mark)

· How many employees does ALS Ltd have and how many countries does it operate across? (1 mark)

· What are the four global business divisions of ALS Ltd? (1 mark)

Question 2(a) – 3 marks

· Who are the six ‘independent’ members of ALS Ltd’s board of directors? (1 mark)

· Who is the other board member and why is he considered to not be ‘independent’? (1 mark)

· Refer to the Directors’ declaration on p. 103 of ALS Ltd’s 2013 annual report: What three statements (‘declarations’) do the directors make with respect to ALS Ltd and its 2013 financial statements? (1 mark)

or

Question 2(b) – 3 marks

· Describe the purpose of the external auditor’s report (that is, the Independent auditor’s report to the members of ALS Ltd on p. 104 of the 2013 annual report). (1 mark)

· Name the audit firm engaged by ALS Ltd in 2013. (1 mark)

· Refer to the Lead auditor’s independence declaration (p. 105 of the 2013 annual report): Why do you think it is important for the auditor to be ‘independent’? (1 mark)

Question 3(a) – 8 marks

· Explain what is meant by the term ‘corporate social responsibility’? (1 mark)

· Refer to ALS Ltd’s Corporate social responsibility report (p. 35 of ALS Ltd’s 2013 annual report) and identify three initiatives adopted by ALS Ltd in 2012/13 to reduce carbon emissions. (1 mark)

· Suggest three reasons why ALS Ltd would choose to act in a socially responsible way. (1 mark)

· Now refer to ALs Ltd’s Remuneration report (contained within the Directors’ report, pp. 40-51 of the 2013 annual report):

· What are the three key components of remuneration for ALS executives? (1 mark)

· What was the total amount of remuneration earned by the Chief Executive Officer of ALS Ltd in 2013 and what percentage of this was a ‘short-term incentive’ cash bonus? (2 marks)

· Name one financial Key Performance Indicator (KPI) and two non-financial KPIs that may have applied in determining executive remuneration at ALS Ltd in 2012-13. (2 marks)

or

Question 3(b) – 8 marks

· Explain what is meant by the term ‘corporate governance’. (1 mark)

· Refer to ALS Ltd’s Corporate governance statement (pp. 30-33 of the 2013 annual report):

· What is the number of the corporate governance principle governing remuneration? (1 mark)

· What is the structure and function of ALS Ltd’s remuneration committee? (2 marks)

· Now refer to ALs Ltd’s Remuneration report (contained within the Directors’ report, pp. 40-51 of the 2013 annual report):

· What are the three key components of remuneration for ALS executives? (1 mark)

· What is the name of ALS Ltd’s Chief financial Officer (CFO)? (1 mark)

· What was the total amount of remuneration earned by the the CFO in 2013 and what percentage of this was a ‘long-term incentive’ share-based award? (2 marks)

Question 4(a) – 6 marks

· What is the time period covered by ALS Ltd’s Profit and loss statement? (1 mark)

· Which other of ALS Ltd’s financial statements cover this same period? (1 mark)

· Why doesn’t ALS Ltd’s balance sheet cover this time period? (1 mark)

· What was the total amount of profit (after tax) earned by ALS Ltd and its subsidiaries in 2013? (1 mark)

· How much of this profit are the shareholders of ALS Ltd entitled to? (1 mark)

· Why are the shareholders of ALS Ltd not entitled to all profits? (1 mark)

or

Question 4(b) – 6 marks

· What was the total amount of comprehensive income earned by ALS Ltd and its subsidiaries in 2013? (1 mark)

· Why is this less than the total amount of profit (after tax)? (1 marks)

· Name the three components of Equity shown on ALS Ltd’s 2013 balance sheet and explain what each component represents. (3 marks)

· What was the total amount of dividends paid by ALS Ltd in 2013? (1 mark)

Question 5(a) – 4 marks

· What is the amount shown on ALS Ltd’s 2013 balance sheet for ‘Property, plant and equipment’ (PPE)? (1 mark)

· What are the five different classes of PPE carried by ALS Ltd? (1 mark)

· Identify the depreciation method(s) used by ALS Ltd for PPE. (1 mark)

· What is the estimated useful life adopted for ‘Plant and equipment’? (1 mark)

or

Question 5b – 4 marks

· What is the amount shown on ALS Ltd’s 2013 balance sheet for ‘Property, plant and equipment’ (PPE)? (1 mark)

· How much depreciation expense was recorded for ‘Plant and equipment’ in 2013? (1 mark)

· What is the total amount of depreciation that has been recorded for ‘Plant and equipment’ since it was acquired? (1 mark)

· Why is land not depreciated? (1 mark)

Question 6(a) – 3 marks

· On ALS Ltd’s 2013 balance sheet, why are ‘Loans and borrowings’ reported as both current liabilities and non-current liabilities? (1 mark)

· What was the value of ‘Inventories’ recorded on ALS Ltd’s 2013 balance sheet? (1 mark)

· Refer to Note 3(g) and identify the valuation rule applied by ALS Ltd to its inventories. (Note: There is no need to discuss how ‘cost’ is determined.) (1 mark)

or

Question 6(b) – 3 marks

· Refer to Note 17 ‘Other Assets’: What do ‘Prepayments’ represent? (1 mark)

· Explain why these items are recognised as assets. (1 mark)

· What are the three types of intangible assets recognised by ALS Ltd in 2012-13? (1 mark)

Question 7(a) – 3 marks

· What was the value of cash receipts from customers in 2013? (1 mark)

· Why does this amount differ from the total amount of revenue from sale of goods plus revenue from rendering of services? (1 mark)

· Observe that ALS Ltd has reported negative net cash flows from investing activities in 2013. Explain whether, in your opinion, this negative net cash flow represents a potential problem for ALS Ltd. (1 mark)

or

Question 7(b) – 3 marks

· What was value of net cash flows from operating activities for ALS Ltd in 2013? (1 mark)

· Explain why this figure is so much higher than ALS Ltd’s net profit after tax (profit for the year). (1 mark)

· Observe that ALS Ltd has reported negative net cash flows from financing activities in 2013. Explain whether, in your opinion, this negative net cash flow represents a potential problem for ALS Ltd. (1 mark)

· Please ensure you have answered the correct version of each question, as determined by your RMIT student ID (see instructions p. 1 of this document.)

· Please ensure you have appropriately referenced each of your answers.

· Note this assignment is scored out of 30 marks and will be scaled to a mark out of 20.