Assessment Task 2 Written Assessment Part A Due date: Wednesday of Week 7 (23:45 AEST) ASSESSMENT Weighting: 20% 2A Objectives This assessment item relates to the following unit learning outcomes: Interpret the technical requirements and conceptual aspects of selected accounting standards that address advanced issues in financial reporting. Exercise professional judgement to apply the requirements of relevant accounting standards and conceptual accounting knowledge to solve advanced accounting problems. Justify and communicate accounting advice and ideas in straightforward contexts to influence specialists and non-specialists. Reflect on performance feedback to identify and action learning opportunities and self-improvements. Himalaya is a hiking equipment medium sized retailer which runs over 500 retail stores throughout Australia with significant online exposure. Katherine Kay is a newly appointed chief financial officer in Himalaya. She decided to recommend share options and exchange traded share options to leverage the risk of volatile shares or earn the return from the share market. Katherine have asked you as a financial accountant to prepare a memorandum to the board of directors for Katherine's signature. Considering the members of the board have limited understanding of financial instruments such as exchange traded share options, Katherine request you to draft the memorandum with the explanations of the exchange traded share options. The below questions need to be addressed in the memorandum. What is an option? Distinguish call options from put options. What is an exchange traded share option? How does an exchange traded share option work? Are exchange traded share options financial instrument in accordance with AASB 9 Financial Instrument? What type of financial instruments are they according to AASB 9 (for example, primary, compound, hybrid, derivative)? Explain your answers. For example, Himalaya has entered the contract of options on FashionCo Ltd on 1 July 2023. Explain the rights and obligations of Himalaya. Then assuming on 1 September 2023, the company writes 100,000 exchange traded call options in FashionCo at a premium of $2.50 per option. The options have a fair value to the holder of $1.50 each on 31 January 2024. Explain whether it is beneficial for the company to write the exchange traded call options. Use this example as the assumption in the memorandum to present the accounting entries and its relevant explanations on recognition and measurement. Question 1 continued over the page Question 1 (continued) Word Limit Word limit is 700 words. You can exceed this limit by 10% (an extra 70 words) with no penalty. Note that the following are not included in the word count: . The Memorandum title and heading block, and ~ The reference list. Resources The following are sources of information about share options for this assignment: Chapter 11 or 12 of the new edition on prescribed textbook. This chapter contains information about the requirements of AASB 9 Financial instruments in relation to classification, recognition, and measurement. An introductory finance textbook. This will provide you with some useful information. However, it will be at a more advanced level than what is required here. It will not include discussion of the requirements of AASB 9 Financial Instruments. Another accounting textbook. A good starting point is chapter 14 of Financial Accounting by Craig Deegan. The 9th edition (published in 2020) is available online through the CQU library. Information from the internet via a search. We will also discuss the assignment question during one (or more) of the weekly workshops. In some cases you may come across interest rate swaps on investments. These types of swaps are different to the one in this question as the interest is received from the investment rather than, as is the case here, being paid on a loan. Criteria for ACCT19061 Advanced Financial Accounting Written Assessment Rubric Content The writing should demonstrate competence in the subject and the ability to articulate knowledge and communicate effectively. This requires consideration of the purpose of the writing task and the intended audience. Relevance. Content is relevant when it contributes to fulfilling the purpose of the writing task. The relevance of content is also affected by the intended audience (for example, their prior knowledge about a topic) and the scope of the writing task (for example, limitations such as word length). The document should: Include all relevant content: no relevant content should be omitted, and Not include any irrelevant content. Development refers to the ways the writing explores and illustrates the topic. It may include one or more of the following: research, synthesis, analysis, critique, identification, explanation, evaluation, description, discussion, examination, justification, argument, and exploration. Level of detail. The level of detail (depth) should be appropriate for the writing task. Accuracy. The content should be accurate: complete and free from error. Errors result from mistakes (for example, misstating a definition, using of out-of-date material, and incorrectly interpreting and/or applying an accounting requirement) or omissions (for example, omitting part of a definition or part of an accounting requirement). Writing style. This refers to word choice, word usage, sentence length/structure, and paragraph length/structure. The writing style should be appropriate for the writing task. Some of the characteristics of the business writing style are: Writing that is concise, clear, precise, and direct, The use of short sentences and paragraphs, The appropriate use of abbreviations and jargon, and The use of highlighting techniques to help the reader access and understand the content. Highlighting techniques include graphics (tables and figures), white space, boldface text, italics, underlining, varied font sizes, and numbered and/or bulleted lists. Tone is the use of words and writing style to convey the writers attitude towards or feelings about a topic. The tone adopted by a writer should be appropriate for the writing task. For most business writing, the tone should be formal, objective, and impersonal. Sources. The content should be adequately supported by appropriate (authoritative, relevant, and credible) sources. Typical sources used include references to textbooks, journal articles, and accounting standards. Organisation The content should be well-organised which requires both of the following: An organisational pattern that is clear, logical, and appropriate for the writing task. Organisational pattern refers to the systematic arrangement (sequencing) of the writing. Good use of structuring elements. The structuring elements are the parts of a writing task that form the basis for an overall pattern and include: the introduction, use of sections, headings and sub-headings, transitions, and conclusion. Writing conventions Writing conventions. The writing task should follow the writing conventions (the rules of syntax, grammar, spelling, and punctuation) of standard written Australian English. Sources should be correctly cited using the APA referencing style. Document design Standard of presentation. Presentation refers to the layout of the document: the way the writing looks on the page. The presentation should be neat and tidy. Format. The format of the writing task (which are specified in the assignment material) should be appropriate. ACCT19061 Advanced Financial Accounting Written Assessment Rubric: Question One Criteria: Content Relevance, development, level of detail, accuracy, writing style, tone, sources Excellent Exceeds expectations Demonstrates an excellent command of the subject and the ability to articulate knowledge through writing, achieving the writing task. This is characterised by: - relevant content, - excellent development of content, and - appropriate level of detail, and - all content is accurate, and - highly effective use of writing style to communicate meaning, - appropriate tone, and - adequate and appropriate sources. 10 12 marks Competent Meets expectations Demonstrates a competent command of the subject and the ability to articulate knowledge through writing, achieving the writing task. This is characterised by minor deficiencies in: - relevance of content, and/or - development of content, and/or - level of detail, and/or - accuracy, and/or - writing style and/or - tone, and/or - adequacy and/or appropriateness of sources. 6 9 marks Developing Below expectations Demonstrates a developing command of the subject and the ability to articulate knowledge through writing. The writing task is not achieved. This is characterised by frequent and/or serious deficiencies in: - relevance of content, and/or - development of content, and/or - level of detail, and/or - accuracy, and/or - writing style and/or - tone, and/or - adequacy and/or appropriateness of sources. 3 5 marks Beginning Below expectations Does not yet demonstrate command of the subject and the ability to articulate knowledge through writing. The writing task is not achieved. This is characterised by extensive and/or significant deficiencies in: - relevance of content, and/or - development of content, and/or - level of detail, and/or - accuracy, and/or - writing style and/or - tone, and/or - adequacy and/or appropriateness of sources. 0 2 marks Marks awarded and comments: /12 Organisation Organisational pattern, structuring elements Writing conventions /4 /2 Document design Standard of presentation, format Total mark: Presentation is very neat and tidy to a professional standard and the format is appropriate. 1.75 2 marks There are some minor deficiencies in the standard of presentation and/or the format. 1 1.5 marks There are frequent and/or serious deficiencies in the standard of presentation and/or in the format. 0.5 0.75 marks There are extensive and/or significant deficiencies in the standard of presentation and/or the format. 0 0.25 marks /2 /20 ASSIGNMENT INFORMATION 1 The writing context All writing is shaped by a writing context that influences what the text says and how the text says it. Figure 1 (below) illustrates the key elements of the writing context which are: . The purpose of the writing task, . The intended audience of the writing task, and . The writer. Figure 1: The writing context (Adapted from Copeland, n.d.). Purpose of the writing task The purpose is the reason (or reasons) why the writer is undertaking a particular writing task. The purpose of the writing task, according to Copeland (n.d.) is important because it affects: The selection of the content, The organisation of the content, What supporting evidence is appropriate, and How much to write. Copeland (n.d.) goes on to state that there are two steps that should be undertaken by the writer to determine the purpose. Firstly, the writer should determine the general purpose of the writing task which could be one or more of the following: To give information about something: this could be to inform, describe, or explain. To argue. To persuade. To propose or recommend a course of action. To entertain. To evaluate or analyse. To solve a problem. Once this is done, the writer should then determine the specific purpose (or purposes) of the writing task. For example, the writers purpose might be to explain the accounting requirements for fair value and cash flow hedges. Intended audience of the writing task The content is also shaped by the intended audience of the writing task. The writer should determine who the intended audience of the writing task is and then consider the following characteristics of the intended audience and how they might affect the writing task: Demographics: this includes characteristics of the intended audience such as their age range, their ethnicity, their religious beliefs, and their gender. It is important to understand that demographic characteristics may only be relevant for some writing tasks. Education: for example, such things as sentence length and complexity and word choices would differ depending on whether the audience comprised academics or high school students. Prior knowledge: what does the audience already know about the topic? For example, an audience of accountants would be expected to be familiar with the term asset. However, an audience of non- accountants might require asset to be defined and explained. In many cases, the writer will have to make reasonable assumptions about the prior knowledge possessed by the intended audience. Expectations: the expectations of the intended audience include such things as expectations about the format used for the writing task (for example, that a letter includes a return address), the level of formality or informality in the tone, and the use of correct grammar and spelling. The intended audience also has expectations of the content based on the purpose of the writing task and the organisation of the content. (Adapted from University of Minnesota Libraries Publishing, 2015). The writer The final element is the writer. Through self-analysis, the writer should identify aspects about themselves that they can then use to enhance the effectiveness of the content of the writing task in relation to the purpose of the writing task and the intended audience (Lumen Learning, n.d.). In the self-analysis, you should ask yourself the following questions: What personal motivations do I have for writing about this subject? What background knowledge do I already have on this subject? What personal experiences have I had that directly relate to this subject? How do these personal experiences influence my perspectives on the subject? What formal training or professional experience do I have that is related to this subject? What skills do I have as a communicator? How can I make use of these in this project? What should audience members know about me for them to trust what I have to tell them? How will I convey this in my writing? (Adapted from Lumen Learning, n.d.). Tone and style Two important aspects of all writing tasks that are affected by both the purpose of the writing task and the intended audience are writing style and tone (Mclean, n.d.; University of Minnesota Libraries Publishing, 2015). Writing style is defined as the way a writer writes: not what is said but how it is said. The writing style depends on word choice, word usage, sentence length and structure, and paragraph length and structure. For example, the writing style for a report might include simple denotative words, short simple sentences and short paragraphs supplemented by graphics. The characteristics of business (technical) writing include the following: Prose (writing) that is concise, clear, precise, and direct, Short sentences and paragraphs, Appropriate use of acronyms, abbreviations and jargon depending on the level of knowledge of the audience, and Use of highlighting techniques to help the reader access and understand the content. Highlighting techniques include graphics (tables and figures), white space, boldface text, italics, underlining, varied font sizes, and numbered and/or bulleted lists. Highlighting techniques should enhance accessibility and understandability and should not be overused. The writing style impacts the tone of a writing task. Tone refers to a writers use of words and writing style to convey his or her attitude towards or feelings about a topic. Tone usually comes across as the effect of the entire writing task rather than individual phrases, sentences, or paragraphs. Some examples of tone include: formal, aggressive, amused, angry, arrogant, colloquial, condescending, critical, defensive, enthusiastic, objective, restrained, sarcastic, and whimsical. The tone should create the kind of reaction that the writer wants in the reader. For example, the writer may want to: Make the reader excited or angry, Push the reader to act, or support a cause or to challenge an idea, or Entertain or inform the reader. For most business (technical) writing, the tone is formal, objective, and impersonal.

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Memorandum To Board of Directors Himalaya Ltd From Your Name Financial Accountant Date Date Subject Explanation and Evaluation of Exchange Traded Share Options 1 Introduction This memorandum aims to e... View the full answer