ASR Assignment 1 (20%)
You are a recent accounting graduate and have been employed by the Perpetual Trustees (PT) as a Research Analyst. The Asset Management Team is concerned that there may be insufficient investments in so-called ‘new technology’ companies and an initial analysis showed that very few of the companies that PT has equity investments in recognise ‘technology’ assets.
They do have a significant investment in CSL Ltd, a renowned biopharmaceutical company and they have asked you to prepare a report considering how technology assets are recognised by CSL. In particular:
a) With reference to CSL Ltd, identify and summarise the current accounting policies relating to research and development and the development of technology generally, and the scope that this gives for the recognition of ‘technology’ assets (i.e., AASB 138).
b) With reference to CSL Ltd are there inconsistencies in:
a. The treatment of different types of expenditures and the recognition of ‘technology’ assets;
b. The treatment of expenditure incurred in developing ‘technology’ assets compared with other long term assets such as property plant and equipment (i.e., AASB 116);
c) What are the consequences for the financial reports of CSL Ltd (i.e., balance sheet and income statement impact) of these inconsistencies?
d) What does the empirical evidence suggest in its evaluation as to the relevance of expenditures on ‘technology’ assets for financial statement users? Specifically, is there any association between expenditures on technology assets, such as R&D and firm value, stock returns and firm performance?
Maximum Word Limit – maximum 1300 words. All material (excluding executive summary, references and appendices) over 1300 words will be disregarded.
Report structure – Your assignment must be set out as a report that adheres to the following structure:
• Title page that includes (a) title of assignment (b) subject name and number, (c) student name and number (d) word count clearly and honestly stated (title page not included in word limit)
• Executive summary (not included in word limit)
• Table of contents NOT required
• Introduction paragraph NOT required
• Body of report – Each of the four sections (a) (b) (c) (d) clearly shown with appropriate headings. Sub headings used as required.
• Conclusion paragraph NOT required
• Reference list (not included in word limit)
• Appendices if required (not included in word limit)
• Your name and student number must be included in the header of your word document
Refer to the UTS Business School Guide to Writing Assignments (link below) on recommendations and suggestions on how to structure your report.
Formatting of body of report
• 12 point font,
• 1.5 line spacing and
• 2.5 cm margins on all sides
Research – You must carry out independent research to complete this assignment and you must cite relevant academic (where relevant) and practitioner articles that support the material and views you present.
Referencing – Use Harvard style referencing. Ensure that:
• Statements made in-text are referenced where required.
• In-text reference format is correct.
• End-text references format is correct
For help with referencing see the UTS library website:
A soft copy of your report is due to turnitin on 11:59pm Friday 10 May and a hard copy is to be handed in during your enrolled tutorial class. Assignments submitted (soft and hard copies) after the due date may attract a penalty of 5 marks (out of 50) per day late or part thereof. Save your word document using your student number as the file name (don’t forget to include your name and student number in the header of your word document!).
Parts (a), (b), (c) and (d) are each worth 10 marks. In addition, presentation and communication are worth 10 marks combined. This gives a total mark of 50 for the report, which will be converted into a mark out of 20. Your report should address each of the parts equally. Attached is the marking scheme that will be used in marking your report. This report is worth 20% of your total subject marks.