Reference no: EM131240936

Assignment Goals:

• - Obtain research experience in the Accounting Standards Codification
• - Obtain experience using SEC filings and the SEC website
• - Practice writing concise accounting-related deliverables

Assignment: You may complete the assignment on your own or in a group of two students. (You need to find your own group.)
Background and Requirements:

Before beginning this assignment, go to www.sec.gov→Filings→Company filings search to find the Bob Evans Farms, Inc. April 29, 2016 10-K. (Recall that the 10-K is filed weeks or even months after the fiscal year end.)

After graduating from the University of Dayton, you joined Ernst & Young and became a team member on the Bob Evans Farms, Inc. (the Company) audit engagement. The audit of Property, Plant, and Equipment is one of your responsibilities, and your senior (supervisor) on the audit team has asked you to perform research in the FASB's Accounting Standards Codification and write a research memo answering questions on the following accounting issues related to Property, Plant, and Equipment. Hint: Make sure you read the first few pages of Item 1. Business in the 10-K to obtain the appropriate background on your client. Also, look at the 10-K areas referenced below so that you understand the nature of the issues and can appropriately summarize the background in your memo. I have not provided all of the details in the prompt, as I would like for you to navigate the 10-K.

Background: According to the last bullet point in the Background section of Item 1. Business, the Company will begin using a new production line at its Lima, Ohio plant in the second quarter of 2017. The new production line required the Company to expand its plant (estimated at $20 million). (The first paragraph under "First-quarter fiscal 2017 commentary" provides more context for the reasons for this expansion.)

Issue #1 - Under what circumstance(s) should the Company begin depreciating costs associated with the Lima, Ohio plant expansion?

Background: According to MD&A, the Company opened new restaurants during 2015. Assume that fixtures (e.g., tables, booths, chairs, etc.) within the buildings are generally depreciated over seven years. Although this is the useful life over which the Company prefers to use the fixtures, the fixtures are often damaged within five years.

Issue #2 - Should the Company consider the possibility of damage when determining the useful life for the restaurant fixtures?
Background: According to Note 1 - Summary of Significant Accounting Policies, the Company has classified the assets of certain restaurant locations as "held for sale".

Issue #3 - What criteria does the Company need to meet in order to classify the restaurant assets as held for sale?

Note: The memo will be graded for content, research, and writing. Expectations for Writing and Research Assignment:

Acceptable Resources

• You may only use the resources (appropriately cited) mentioned above in this assignment. You do not need to cite the 10-K, but you do need to cite the Accounting Standards Codification.

• The Accounting Standards Codification is available at https://aaahq.org/ascLogin.cfm. (user ID: AAA51174, password: 3UsZa3U)

• You must complete the assignment individually or in a group of two, and you may not share answers with students who are not in your group. Using resources other than your textbook and those resources mentioned in this assignment (e.g., classmates who are not in your group, parents, CPA friends, prior course memos, assignments that you find online) is a violation of the Honor Code. See the syllabus and Honor Code to understand implications of completing the assignment using unauthorized assistance.

• It is not appropriate to copy background language directly from this assignment or from the 10-K. Use your own words.

Format

• Prepare a memo using the format in the Appendix attached.

• Length: Your write-up should be no more than two or three pages in length

• Spacing: Single-spaced

• Font size and Style: 12 point Times New Roman

• Margins: One-inch on all sides

• Finishing: Pages should be stapled together.

• Cover Sheet: A cover sheet is not necessary.

• Single or Doubled Sided: Single or double sided printing is acceptable.

• Use the APA format to cite the sources. Citations are not counted as a page.

• Provide proper citations and references. Keep in mind that your textbook is not an appropriate source to cite in this assignment. References should be to the codification.

Writing (See below for questions to ask yourself when you self-review your memo.)

• Your write-up should be clear, concise, complete, free of spelling and grammatical errors, and professional looking.

• The assignment will be graded on the quality of the writing (see Appendix 2) in addition to the quality of the discussion of the accounting issues.

• Your memorandum should be written in a manner that enables a 3rd party who isindependent of the issue to understand the issue, relevant research, and your interpretation of the research.

As you proofread your assignment, consider the following items:

• Would someone unfamiliar with the company and the issues (a 3rd party) be able to understand the issues?

• Would someone unfamiliar with the research you are citing (a 3rd party) be able to understand 1) what you found in the codification and 2) how you arrived at your conclusions? (You are encouraged to include well-cited quotes from the codification.)

• Do your tone and word choice fit your audience and the purpose of the memo (e.g., no contractions, no casual phrases)?

• Is your writing grammatically correct?

• Is your writing concise and easy to read? (Business memos do not require large words or complex phrases.)

• Does the memo flow from one section to another?

• Do you avoid passive writing?

• Are you conclusions clearly stated?

• Does my research lead to the conclusions that I have stated?

Academic Honesty:

Here is some advice to help you avoid plagiarizing:

It is best to express the ideas you use in your own words. In the case of both individual and group work, words or ideas that come from someplace or someone else must be cited: "A good rule of thumb is this: Whenever you consciously borrow any important element from someone else, any sentence, any colorful phrase or original term, any plan or idea-say so, either in a footnote, bibliography, or parenthesis" (from "Academic Honesty in the Writing of Essays and Other Papers," Carleton College, 1990).

An appropriate in-text reference to the ASC is generally in the following format: XXX-XX-
XX-XX
3

Appendix 1 Memorandum Format

MEMORANDUM

To: The Bob Evans Farms, Inc. Audit Files
From: Student name
Date: October XX, 2016

Re: Property, Plant, and Equipment Accounting Issues

Background and Facts

Please see examples for further ideas on what to include in each section.

Issues

Issue 1: Under what circumstance(s) should the Company begin depreciating costs associated with the Lima, Ohio plant expansion?

Issue 1: Background

Issue 1: Research and Analysis

Issue 2: Should the Company consider the possibility of damage when determining the useful life for the restaurant fixtures?

Issue 2: Background

Issue 2: Research and Analysis

Issue 3: What criteria does the Company need to meet in order to classify the restaurant assets as held for sale?

Issue 3: Background

Issue 3: Research and Analysis Conclusion

Financial Statement Impacts

In this section, briefly summarize the impact that the above conclusions will have on the financial statement.

Attachment:- Bob_Evans_Reports_Fiscal.pdf