Reference no: EM133074521 , Length: word count:3000
HI6025 Accounting Theory and Current Issues - Holmes Institute
Assessment - Conceptual and critical evaluation of theories
Purpose: Students are required to conduct a research and analysis of a theoretical financial reporting issue and present their findings in a written report.
Students will have to do research on relevant literature and demonstrate understanding and critical evaluation of key disclosure issues relating to application of specific accounting standards. Additionally, they will demonstrate understanding and critical evaluation of the Australian financial reporting environment and its current regulatory framework and recommend future directions to the Australian financial reporting regulators.
Assignment: Part A
In an article published in The Australian on 4 May 2021, it was noted that the company named as the ‘ABC Group' reported a big loss equal to $595 million and negative net assets of $75 million. The company seems insolvent and unable to pay all of its liabilities if they fall due. The auditors did not qualify the financial statements, nor challenge the directors on their assertion that the company was a going concern.
Requirement:
Question 1) Discuss the implications for the company's financial statements preparation and presentation if the company is not considered to be a going concern? Use the conceptual framework concept and general-purpose financial statements requirement given the evidence provided above?
"Maximum 1000 words."
Part B
According to the Australian Accounting Standards (AASB 138 Intangible Assets), companies are required to not capitalised research expenditure instead treating them as expenses consequently present them in the income statement.
Requirement:
1) Building on the three main components of the Positive Accounting Theory, provide your prediction and discuss which companies are likely to have a preference of capitalising research expenditure rather than expenses?
2) Discuss the potential investigation or studies for researchers for testing your predictions in the above question.
"Maximum 2000 words."
Attachment:- Conceptual and critical evaluation of theories.rar
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