Accounting Theory III Individual Assignment Semester 1 2021
Please note that the individual assignment is unrelated to the SGDE project.
Due Date: 11.59 p.m. Tuesday 13 April
Word Limit 250 words maximum, excluding references
Submitting an answer with considerably less than 250 words is NOT a cause for concern.
Suggested word limits are provided for each component (a, b and c). These are suggestions
only. The word limit applies to the assignment as a whole, and not to individual components.
Please do not repeat the questions in your answer because it inflates the turnitin similarity
score.
Format: typed and double-spaced, font size 10 – 12, clearly label each part
The use of other authors’ material (e.g., documents issued by the AASB) in your assignment
MUST be properly acknowledged and referenced using the Harvard system. See
Communication Skills Guide, section 1.14. If for some reason you are quoting directly from
an accounting standard or other document, remember to put the quote in inverted
commas/quotation marks (e.g., “direct quote”) so that turnitin doesn’t give you a high score.
Weight: This assignment counts towards 8% of your final overall grade.
Learning Outcomes and Scope
This assignment is designed to develop and assess your communication skills as well as
your ability to apply knowledge, concepts, principles and techniques to accounting problems.
This assignment is based on topic 4, in which the accounting policy decision model was
introduced, drawing on material covered in topics 1 – 3. The questions are based on steps 2,
3 and 5 of the accounting policy decision models. You will be assessed on how well you
answer the questions.
Penalties
Failure to label parts a), b) i), etc. may incur a penalty of up to 30% of full marks.
Materially exceeding the word limit may incur a penalty of up to 20% of full marks. 10%
(25 words) is deemed material.
Late submission: 10% per day, or part thereof.
Questions about the assignment
Questions about the assignment will only be considered if you post them on the Discussion
Board on MyUni so that the responses provided by staff are accessible to all students in the
course. When posting to the Discussion Board please give your post a meaningful topic title
so that other students can locate it. Tutors and lecturers will NOT discuss the assignment
with you during consultations or tutorials.
Case: JobKeeper Subsidy
During 2020, the Australian Government introduced the JobKeeper subsidy with the
objective of mitigating adverse economic impacts of the Covid-19 pandemic in Australia.
Subject to an eligibility test1
, employers could register for the scheme and receive a subsidy,
in the form of reimbursement of wages or salaries paid to each eligible employee, up to the
amount of the JobKeeper payment rate applicable to each employee.
Aussie Freight Ltd (AFL) was eligible to participate in the JobKeeper scheme and received
$1 300 000 in JobKeeper subsidies between May and August of 2020. The subsidy was
correctly accounted for by crediting Wages and salaries expense.
While AFL’s revenue from regular sources was reduced, the Company redirected its
operations to delivering parcels. There was high demand for parcel delivery due to increased
on-line shopping. At the end of August, senior management of AFL reviewed the company’s
financial performance and financial position and decided to make no more claims under the
JobKeeper Scheme. Senior management viewed this as being a good corporate citizen by
giving back to the community during the period of national and global hardship.
In December 2020 management of AFL decided to return the Company’s JobKeeper
subsidy to the Government, following the example of some other companies that had
experienced better-than-expected profitability during the pandemic. They decided that the
subsidy would be returned in the first quarter of 2021. AFL’s reporting period ends on 31
December.
REQUIRED
The word lengths are a suggestion only, i.e., they are no strict word limits for each part.
a) In preparing the financial statements for the year ended 31 December 2020, what is the
main accounting policy issue(s) that need to be resolved in relation to the decision to
return the JobKeeper subsidy? (approximately 15 – 40 words) (20%)
b) i) Is there an Australian Accounting Standard that addressed the issue? If yes, identify
the standard (e.g., Yes, AASB XXXX Title). If not, state which pronouncement should be
used as a source of guidance. (E.g., No, use …) (5-15 words) (10%)
ii) Identify one principle from the Standard/pronouncement that you identified in part b) i)
that is relevant to the accounting policy issue that you identified in part a) by providing a
reference for that principle (e.g., AASB XXX, para. zz, or para. z1 and z2) AND explain
why you chose that principle. (approximately 20 – 60 words) (20%)
iii) Identify another principle that is relevant to the accounting policy issue that you
identified in part a) by providing a reference for that principle. (e.g., Conceptual
Framework, para. X.XX; or AASB XXX, para. X1) (up to 10 words) (10%)
c) The bookkeeper suggested that a liability for the full amount of the repayment of the
JobKeeper subsidy should be recognised in AFL’s 2020 financial statements. Evaluate
this policy using the principles that you identified in part b. (approximately 40 – 130
words) (40%)
