I want to receive answer for Question2 part a, b of this assignment. Thank so much

DEPARTMENT OF ACCOUNTING Advanced Accounting Issues (ACC5AAI) SEMESTER 2, 2016 ASSIGNMENT QUESTION Due date: 7 October 2016, 5pm in SS114 (Kamran Ahmed) Word Length: 1,500 words maximum Group Size: Each Group should be between 4 and maximum of five students Group Formation: Use the LMS \"group assignment allocation\" to form groups Mark Allocation: 15% All assignments must have a Signed Statement of Authorship form to be downloaded from the LMS. Assignments without this form will be awarded \"0\" mark. Each STUDENT is required to submit one form. There will be NO Assignment Box for ACC5AAI. You should submit the printed copy of your assignment to Professor Kamran Ahmed in SS114. If I am not around you can slide it under the door. Early assignments can be handed over to me in my room SS114. Electronic submission will NOT be accepted for this assignment. However, you can submit a printed copy to me through your fellow students along with Statement of Authorship if there is a genuine reason for not coming to the campus on the due date. You are required to submit the assignment with a maximum of 1500 words. Assignments above this word limit will be returned for resubmission. Assignment tasks must be presented in a professional manner (word processed). Submissions must be properly referenced (refer to the University Style Guide). Use of 1 improper or inappropriate grammar, punctuation and excessive spelling mistakes will result in the assignment being returned and the student being required to resubmit the work before a mark is awarded. The resubmitted assignment will accumulate the same penalty as late submissions until it has been presented in an acceptable format. Late submissions will incur a penalty of as per the policy stated in Subject Learning Guide. Applications for extensions must be lodged with the Subject Coordinator before the due date in writing for granting an extension (medical problems etc). Plagiarism is a serious matter; all students involved will be referred to the University's appropriate authority. This assignment requires you to summarize and critically review the challenging questions relating to accounting theories and accounting policies. It gives an opportunity to demonstrate your level of understanding of the relevant accounting theories and applying them to company financial reporting. Question 1 (9 Marks) Read the extract from Stewart Oldfield's article 'A step too far crucifies small business' reproduced in Financial Accounting in the News 3.6 and answer the following questions: Financial Accounting in the News: A step too far crucifies small business Stewart Oldfield The Australian Financial Review, 4 June 2004, p. 81 Alan and Wilma McMinn thought they had it made when they bought a Gold Coast child-care centre from ABC Learning's Eddie Groves in 1995. They had a supportive commercial manager from National Australia Bank who endorsed a jointly penned business plan with a $800 000 loan to exploit one of the fastest growing population corridors in the country. They had switched from ANZ Banking Group because of their faith in the manager, who, they say, showed a keen understanding of the child-care business. The 1996 financial year produced a net profit of $250 000, prompting plans to expand, they say. They planned to build an adjoining child-care facility and have it ready for the start of the 1997 school year. 2 But changes were afoot at their bank under the then general manager of Australian financial services, Frank Cicutto. Job cuts and branch closures were in full swing as each of the major banks sought to cut costs. The McMinns say their trusted bank manager was replaced and a string of less-capable bank staff were appointed to manage their account. Nevertheless, the McMinns say that in September 1996 they were told by a new manager that the bank remained committed to their expansion. They say the new manager told them that head office was in a mess due to ongoing restructuring and staff changes, but the loan would be approved so they should proceed while the necessary paperwork was completed. The McMinns started building, but then in December they say they were ordered to stop work without explanation. Four agonising months passed before approval to resume building was finally granted. The McMinns believe the delay caused by the internal restructuring crucified their plans because they missed the start of the new school year. This started them on a debt cycle that eventually led to the appointment of receivers. They say they had 16 different commercial managers at the bank between October 1995 and July 2000 and have been left bitter about their treatment by the bank. Their dispute with the bank is now before the courts and the bank is saying little on the matter. 'We have a general policy of not commenting on matters of this kind,' a NAB spokesman said. But it seems the internal restructuring in the country's most profitable small-business lending franchises continues to rub customers up the wrong way. In its latest financial results, NAB reveals that it is losing market share at the sole-proprietor end of the business lending. 'Every bank has got a different version of what SME relates to, but what we are clearly doing is losing market share at the sole proprietor end,' the head of NAB's Financial Services Australia unit, Ian MacDonald, says. But it is not the $360 000 million foreign currency option scandal that is being blamed for the departure of the lucrative sole proprietors. Instead, it is a new round of restructuring triggered by a centralisation program kicked off two years ago under Cicutto's Positioning for Growth strategy. 3 The initiative resulted in about 110 business bankers [being] pulled out of the field and into capital-city offices. The idea was that NAB could centrally manage its small-business customers, sacrificing face-to-face contact in the process. The bank now admits it went too far with the efficiency drive. The bank has moved to have a small-business banker in each of its 110 business-banking centres around the country, MacDonald says. Further it will position a business banker in a retail branch if there is a need. It is an embarrassing and costly turnaround that has gone largely unnoticed by investors as they focus on the impact of the currency option scandal. The drive for efficiency has seen the market leaders in small business banking, NAB and CBA, become too willing to call receivers in on a client when there is a whiff of trouble, Evan Jones, of the economics faculty at the University of Sydney, says. Staff turnover has contributed to the demise of an unknown number of NAB borrowers, he says, sympathising with suggestions that NAB will transfer a bank manager who gets too close to clients. 'There is no moral or legal pressure on these banks to act in any normal principles of ethical standards or corporate governance. The imbalance of resources which they can bring and their long-standing relationship with the receivers means they can count on getting away with whatever they want to do. I would like to think that there is a link between NAB's behaviour and loss of market share,' he says. The banks have promoted studies that find small business is getting a better deal from the banks, perhaps in fear that the federal government might introduce legislation to improve service to the country's 1.2 million smallbusiness operators, as has the government in the UK. Answer 3 questions below (each sub-question carry 3 marks) (a) Applying Stakeholder Theory, would the bank care about the concerns of the small business sector and regional business communities? (b) Applying the political cost hypothesis of Positive Accounting Theory, explain the claim in the article that 'The banks have promoted studies that find small-business is getting a better deal from the banks, perhaps in fear that the federal government might introduce legislation to improve service to the country's 1.2 million small-business operators, as has the government in the UK'. 4 (c) If rising bank closures and management turnover are not what the community expects, how would Legitimacy Theory predict how the bank might react? QUESTION 2 FINANCIAL ACCOUNTING IN THE NEWS Lion Nathan rethinks bricks and porter strategy Leon Gettler The Age, 29 January 2004, p. 3 Lion Nathan has put its pubs operation under review, four years after embarking on an aggressive plan in which it spent $65 million on hotel assets to ratchet up its low share of the Victorian beer market. The brewer said yesterday that it was reviewing its ownership of 41 pubs in Melbourne and Geelong after receiving expressions of interest. This is expected to involve various sale and leaseback options. Contracts for long-term supply arrangements are expected to be part of any deal. Lion Nathan is revisiting the pubs business after its rival, Foster's, spun off its own hotels and gaming business, Australian Leisure and Hospitality. Lion Nathan's pub-buying spree was at odds with its strategy of not owning or operating hotels, but the brewer wanted to make an exception in Victoria, the backyard of Foster's. In June 2000, it had a 13 per cent share of the Victorian beer market but by November 2003, Lion Nathan's share had crept up to only 13.2 per cent. Lion Nathan had shrewdly targeted the 18-to 25-year-old segment in Victoria, but the strategy has been criticised because of the difficulties of coming in as an outsider and using an exclusive retail network to drive market share from such a low base. In that time, Lion Nathan had also written down the value of its Victorian hotels. Yesterday, the group said the change did not indicate a reduction in its plans for Victoria but rather a switch in focus by increasing its investment across brands including Tooheys, Becks, Hahn, James Squire and XXXX. Analysts said yesterday that the news was in line with Lion Nathan overhauling its Victorian strategy, something which had been under way for 12-18 months. Lion Nathan is believed to have raised $20 million from the sale and leaseback of about a third of its Victorian portfolio about 12 months ago. In a statement to the market, Lion Nathan said it was not looking to sell individual venues and was committed to retaining ownership and control of the portfolio 'if that will deliver the best outcome for Lion Nathan and maximise shareholder value'. Hotels in the brewer's portfolio include Pugg Mahone's and The Imperial in the central business district, the Albert Park Hotel, Limerick Arms and Golden Gate in South Melbourne and the 5 Builders Arms in Fitzroy. Lion Nathan Australia managing director, Andrew Reeves, said yesterday: 'Hotel ownership and management was only one part of our Victorian growth strategy, the objectives of which have been largely achieved. We have never viewed hotel ownership as a core business and, given the recent focus on investment in the sector, we considered that now was an opportune time to review the future of these venues in our Victorian growth strategy' Read the above newspaper article by Leon Gettler called 'Lion Nathan rethinks bricks and porter strategy' in Financial Accounting in the News below and answer the following questions: (each sub-question carries 1.5 marks) (a) Identify some benefits that might accrue to Lion Nathan as a result of the sale and leaseback transactions. (b) Would you expect the related leases to be finance leases or operating leases? Explain your answer. (c) How should Lion Nathan account for any profit or loss on the sale of the pubs? (d) If it sells the pubs and then leases them back would you expect Lion Nathan to change how it accounts for the depreciation of the buildings? 6