BUSINESS AND LAW ACFI2001 Company Accounting

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FACULTY OF
BUSINESS AND LAW

ACFI2001 Company Accounting

Semester 1, 2014

Assignment 2

Weighting: 20 Marks
(worth 10%)

Due
Date: Friday 23 May, 2014, 11:59pm

Weighting: 10%

All assignments
are to be submitted electronically on Blackboard via Turnitin.

The assignment must be attempted and completed individually
and submitted by 11:59pm on the due date. Turnitin reports can be used as
evidence by the lecturer in the event that plagiarism is suspected in an
assignment. Suspected acts of plagiarism will be forwarded to the Student
Academic Conduct Officer (SACO).

Any
assignment submitted late will be penalised at a rate of 10% per day of the
possible maximum mark for the assignment for each day or part day that the
assessment is late. Any assignment submitted more than five days after the due
date will be awarded zero marks.

Assignment
Details

You are the financial accountant for a mid-sized
company and you have been briefed on a meeting that has taken place last week.
In that meeting the marketing department discussed the merits of joining a
network involving a virtual currency to promote business. In the meeting the
adoption of Bitcoin (a very popular virtual currency) and Emoney were
discussed, however due to the security issues, the idea of adopting Bitcoin was
dismissed.

The way the virtual currency Emoney
works is via a network of suppliers and clients through the network “ENet” and
the use of “Emoney”. Emoney is the virtual currency that is used to transact
within the network. 1 unit of Emoney is equal to 1 Australian dollar.

Each
time a company that is within the ENet network provides a good or service to
another member within the Network, the value of the service is recorded in
“Emoney” and is added to

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the
company’s Emoney balance. This value of Emoney can then be exchanged for goods
and services provided by companies within the network and the balance updated
accordingly.

There
is no active market for Emoney, it has no physical substance and cannot be
exchanged for cash. The major advantage of using Emoney is transactions within
the network are cashless and it is being used to promote the strengthening of
business amongst members within the network.

As
the financial accountant you have been asked about the impact this will have on
the financial position of the business, any risks involved and how the virtual
currency should be recognised from an accounting point of view by writing a
report for the Chief Financial Controller (CFO).

Required:

Write
a 750 – 1000 word report that addresses the following criteria:

1. With
reference to the Framework for the Preparation and Presentation of Financial
Statements (Conceptual Framework) justify whether Emoney satisfies the
definition and recognition criteria of an asset.

2.
With reference to any appropriate
accounting standards justify what is the correct initial accounting treatment
for recording the value of Emoney.

3.
Upon initial classification discuss the
subsequent accounting treatment with respect to the initial classification.

4.
Discuss any risks associated with the
recognition of Emoney and the relevance this has for the accounting treatment.

Where
any reference is made to the accounting standards, the framework, textbooks etc
it needs to be appropriately referenced. Please note APA referencing style is
to be used.

Your report
should be structured and include the following:

– Cover Sheet

– Executive
Summary

– Introduction

– Body of the
Report

– Conclusion

– References

Please note your
report must be referenced. (APA referencing style is to be used).

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Marking Criteria:

Criteria

Excellent

Satisfactory

Poor

Marks

100%-75%

74%-50%

49%-0%

The E-Dollar

Justification
why

6

Comprehensive
justification

Limited
justification and

No
justification or incorrect

E-Money meets

and
demonstrated

understanding
as to why the

justification
or

the definition
of

understanding
as to why E-

E-Money meets
the definition

understanding
as to why E-

an asset with

Money meets
the definition

and
recognition criteria of an

Money meets
the definition

reference to
the

and
recognition criteria of an

asset is
provided with

and
recognition criteria of an

Framework

asset is
provided with

reference to
the Framework.

asset is
provided with

reference to
the Framework.

reference to
the Framework.

Logic and
reasoning of

Logic and reasoning
of

argument is
satisfactory due to

Logic and
reasoning of

argument is
excellent

limited
justification

argument is
poor due to no

or limited
justification.

Discussion and

5

Thorough/deep
and relevant

Limited
discussion (either

None or
incorrect discussion

analysis of
the

discussion provided as to the

lacks relevance or depth)

provided as to the

initial
treatment

accounting
treatment of E-

provided as to
the accounting

accounting
treatment of the

of E-Money

Money with
reference to the

treatment of
the E-Money

E-Dollar with
reference to

application of
the appropriate

with reference
to the

the
appropriate accounting

accounting
standard.

application of
the appropriate

standard.

accounting
standard.

Logic and
reasoning of

Logic and
reasoning of

argument is
excellent

Logic and
reasoning of

argument is
poor due to no

argument is
satisfactory due to

or limited
justification

limited
justification

Subsequent

3

Subsequent accounting

Subsequent
accounting

Subsequent
accounting

accounting

treatment with
reference to

treatment with
reference to the

treatment with
reference to

treatment

the
appropriate accounting

appropriate
accounting

the
appropriate accounting

standard is
thoroughly

standard is
discussed to a

standard is
not discussed,

discussed,
relevant and

limited extent
and/or is

incorrect
and/or very limited

accurate.

partially
correct and/or

and/or
irrelevant.

partially
relevant.

Logic and
reasoning of

Logic and
reasoning of

argument is
excellent

Logic and
reasoning of

argument is
poor due to no

argument is
satisfactory due to

or limited
justification

limited
justification

Risks involved

2

Risks
associated with use of

Risks
associated with use of

Risks
associated with use of

with Emoney
and

Emoney are
thoroughly

Emoney are
discussed to a

Emoney are not
discussed,

relevance this
has

discussed,
relevant and

limited extent
and/or are

are discussed superficially,

for the
accounting

accurate.

partially
relevant and/or

and/or are
incorrect and/or

treatment.

partially
correct.

are not
discussed and/or are

not relevant.

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The Report

Presentation
of

2

The report is
well presented

The formatting
and layout of

The formatting
and layout is

the report

with
consistent use of

the report is
inconsistently

poor
indicating a lack of

formatting,
headings, sub-

presented.

professionalism.

headings and
supporting

tables/graphics.

Inconsistent
use of formatting,

Either
appropriate headings

headings and
supporting

are not used
and/or there is a

tables/graphics

lack of
formatting and/or

there is a
lack of supporting

tables/graphics

Structure,
Quality

2

Referencing
appropriate with

An adequate
attempt at

Lack of proper
referencing.

of Writing and

no errors or
omissions.

referencing
was made with

Either
references are missing

Referencing

minor errors
or omissions in

or the
referencing style has

Professional
language is used

the style of
referencing.

not been
applied accurately

which
communicates meaning

with clarity
and fluency.

Adequate
language which

Poor language
impedes

conveys meaning with some

meaning because of errors in

No errors in
spelling,

clarity,
however there the

usage and
disorganisation of

grammar and
punctuation, or

report is
inconsistent in its

information.

sentence
structure.

flow from one
idea to the next

and there are
errors in

Consistent
errors in spelling,

expression.

grammar,
punctuation,

sentence
structure and/or

Errors in
spelling, grammar,

organisation.

punctuation,
sentence

structure,
and/or organisation

Total Marks

20

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