Faculty of Business, Economics & Accounting

Department of Accounting and Finance

HELP Bachelor of Business (Hons) Year 2

INTERNAL SUBJECT DETAILS

Semester 1, 2017

Subject: ACC 202

Financial Reporting

Subject Lecturer/Tutor: Mr. Lye Kok Keong

Telephone: 03-2716 2000
Fax: 03-2093 5311
Email: lyekk@help.edu.my

Consultation: Please call or email for appointment

PRE-REQUISITE(S)

ACC101 FINANCIAL ACCOUNTING 1

ACC203 FINANCIAL ACCOUNTING 2

SYNOPSIS

ACC202 Financial Reporting builds on the knowledge acquired from ACC101 Financial
Accounting 1 and ACC203 Financial Accounting 2. This subject requires students to
consider the role of accounting in conveying an organisations economic and social
performance.

Students will be introduced to the regulatory environment for reporting entities and an
overview of the conceptual framework for financial accounting prescribed by the
International Accounting Standards Board and the Malaysian Accounting Standards
Board. It aims to develop an awareness of conceptual issues underlying current financial
reporting issues.

These conceptual issues are implemented in the later topics of this subject as students
study specific accounting standards that involve measurement, recognition and
disclosure are applied to elements of financial statements. Students will learn to account
for intangible assets such as research and development expenditure and natural resources;
financial instruments; leases and hire purchase agreements; construction contracts;
extractive industries; off balance sheet liabilities; employee benefits; segment reporting;
and contingent and post balance sheet events. Students will be required to understand the
mechanics of applying the standards, the consistency of particular standards in relation
to the reporting/measurement requirements embodied within other standards and the
conceptual framework.

On completing this subject students should be knowledgeable of a large proportion of

the accounting and reporting requirements that pertain to single business entities.

OBJECTIVES

Upon completion of this subject, students should be able to:

demonstrate a knowledge of the regulatory environment within which accounting

procedures and reporting practices operate;

appreciate the role of the conceptual framework for financial reporting and
understand and apply its components to practical situations;

be aware of the place of national statutory, listing and professional regulations in the
context of international reporting and international accounting standards;

understand how the accounting standard process developed and how it currently
operates;

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 be aware of the structure of accounting standards and be able to recognise structural
differences;

be able to apply generally accepted accounting principles and specific accounting

standards relating to concepts of recognition and measurement of financial statement
elements, and

be able to apply generally accepted accounting principles and relevant accounting

standards relating to the concept of disclosure, e.g. segment reporting, post balance
date events.

TOPICS

Topic 1 The Malaysian Regulatory Environment

Topic 2 The Conceptual Framework of Financial Reporting

Topic 3 Measurement and Revenue Recognition

Topic 4 Intangible Assets and Research and Development expenditure

Topic 5 Provisions, Contingent Liabilities and Contingent Assets

Topic 6 Accounting for Leases

Topic 7 Accounting for Employee Benefits

Topic 8 Accounting for Construction contracts

Topic 9 Disclosure-oriented accounting standards for financial reports: Operating

Segments

Topic 10 Disclosure-oriented accounting standards for financial reports:

Accounting policies, changes in Accounting Estimates and Errors

Topic 11 Disclosure-oriented accounting standards for financial reports: Events

after reporting period

PRESCRIBED TEXTBOOK

Lazar, J. and Huang, C.C. (2014) Financial Reporting Standards for Malaysia, 4th edn
(revised), McGraw-Hill

RECOMMENDED REFERENCES

Tan, L.T. (2014) Financial Accounting and Reporting in Malaysia (Volume One), 5th
edn, CCH.

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Tan, L.T. (2015) Financial Accounting and Reporting in Malaysia (Volume Two), 5th
edn, CCH.

Latest editions of the relevant MASB standards issued by the Malaysian Accounting
Standards Board

JOURNALS

The International Journal of Accounting

Journal of Accounting Research

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Subject Outline / Teaching Plan

Department : Accounting & Finance Subject Code : ACC 202

Lecturer : Lye Kok Keong Subject Title : Financial Reporting

Week Topics References

1 The Malaysian Regulatory Environment Chapter 1
1 The Conceptual Framework of Financial Reporting Chapter 1
2 Measurement and Revenue Recognition Chapter 19
3 Accounting for Assets: Intangible Assets Research and Chapter 35
Development expenditure
4 Provisions, Contingent Liabilities and Contingent Assets Chapter 34
5 Accounting for Leases I Chapter 18
6 Accounting for Leases II Chapter 18
7 Mid Term & Break
8 Accounting for Employee Benefits Chapter 20
9 Accounting for Construction contracts Chapter 15
10 Disclosure-oriented accounting standards for financial Chapter 9
reports: Operating Segments
11 Disclosure-oriented accounting standards for financial Chapter 13
reports: Accounting Policies, Changes in Estimates and
Errors
12 Disclosure-oriented accounting standards for financial Chapter 14
reports: Events after reporting date I
13 Disclosure-oriented accounting standards for financial Chapter 14
reports: Events after reporting date II
14 15 Final Examination

Textbook: Lazar, J. and Huang, C.C. (2014) Financial Reporting Standards for
Malaysia, 4th edition (revised), McGraw-Hill

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ASSESSMENT:

There are 3 assessment items for this subject.

Assessment Items Value Due Date

1. Test 15% TBC (Week 7)

2. Assignment 15% 27 March 2017

3. Final Examination (Closed Book) 70% Examination period: 22 April -

6 May 2017**

REQUIREMENTS:

To gain a pass in this subject, students must:

Achieve a passing grade in the final examination i.e. score a minimum of 35 marks
out of 70 marks if there is an examination for this subject.

Attempt ALL areas of assessment; and achieve a total result of 50% or better
overall.

** - Please check on the notice board and My Acel for the actual date. HELP
University reserves the right to make any changes to the above where appropriate.

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ASSIGNMENT QUESTION

Due date: Monday 27 March 2017

Value: 15% of total assessment

Assignment aims and instructions

The purpose of this part of the assignment is to help you further develop some of the
skills and knowledge required and valued by the accountancy profession. The task that
you will be required to undertake is similar to the tasks required of a professional
accountant working within the financial reporting field. Accounting professionals need
to ensure they are aware of current developments and that their knowledge is 'up to date'.
They need to be able to identify changes that have occurred that may impact on their
work and to know where they can obtain information about these changes. In this
assignment you are asked to provide a summary of recent developments relating to
financial reporting.

As such this assignment aims to:

Develop the student's ability to identify and source changes to accounting/reporting
requirements so as to update professional knowledge required for practice;
Acquire an awareness of current developments and changes (both locally and
internationally) that may impact on current and future accounting and reporting rules
and regulations;
Develop the student's ability to provide written material appropriate to the
accountancy profession;
Help students appreciate the limitations of the currency of knowledge in a technical
financial reporting area;
Allow students to understand the relationships between technical issues and
community attitude to financial reporting.

Instructions

Assume that you are a member of a large accounting firm which is responsible for
preparing financial reports, including statements and notes to the accounts and for
advising staff in client firms who are responsible for preparing financial reports.

The firm only deals with large Malaysian companies listed on the Bursa Malaysia. You
have been asked to prepare a short newsletter for the purpose of alerting staff to changes
and developments in financial reporting over a 10-week period.

Students are required to:

Monitor changes and developments in the financial reporting environment by
monitoring a range of sources (including professional web sites and publications,
newspapers, web sites of a variety of organisations including the MASB, IASC,
Bursa Malaysia, Bank Negara, Company Commission Malaysia) for a 10 week
period; and
Prepare an accounting newsletter (in accordance with the formatting instructions
below) alerting staff to significant changes/developments or items of interest.

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Monitoring of changes and developments

This will involve regular monitoring of a number of sources over the required period.
The sources should be varied in range, as you will need to identify and consider
developments/changes relating to:
Technical issues such as issue of new accounting standards, exposure drafts or other
pronouncements or interpretations.
Regulation and monitoring of financial reporting.
Political influences or other potential developments (such as identification of any
reporting failures) that could impact or may be of interest to staff (such as Enron or
the more recent Parmalat failure). 'Political' does not only mean action from
politicians it would also include lobbying/actions by other groups to promote their
own interests for example there may be articles about companies, or particular
interest groups such as Group of 100, saying that if certain accounting standards are
introduced this will disadvantage or have a negative impact. This would also be
considered 'political'.

You will need to consider both local (Malaysia) and international sources and
developments. A section on 'international' items/developments must be included in the
newsletter. This should not be restricted to the IASB.

Potential sources

Given the scope of the potential influences on financial reporting you will need to
monitor a range of sources. Below is a list of sources that may be of interest, note that
this list is not exhaustive, students should search for sources outside of these. As this
assignment considers current developments and, of course we do not know what
changes/developments will occur during the period, the relative usefulness of specific
individual sources cannot be predicted.

Students should not rely on any one type of source, but a range of sources from each
category, i.e. do not just look at web sites, also check journals, newspapers etc.

Examples of possible information sources include:

Web sites such as
Malaysian Accounting Standards Board (MASB)
Company Commission Malaysia
International Federation of Accountants
Malaysian Institutes of Accountants (MIA)
CPA Malaysia
International Accounting Standards Board
Financial Accounting Standards Board
Web sites of large accounting firms.

Professional publications
The Malaysian Accountant (CPA Malaysia)
Accountants Today (MIA).

Newspapers/Journals

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10 week period

The newsletter is to identify and consider developments and changes for a period of 10
consecutive weeks beginning on 16 January 2017 and ending 24 March 2017.

What not to consider

Students need to take care that the developments and the changes considered and
included in the newsletter are relevant to the objective, in particular only on the
issues/developments that directly relate to the preparation of financial reports for large
companies listed on the Malaysian stock exchange.

It SHOULD NOT consider areas only INDIRECTLY related to the preparation of

financial reports such as (and this is not an exhaustive list)
Fraud
Auditing
Taxation
Other disclosures by listed companies such as
Industry disclosures required by peak organisations
Voluntary disclosures in the area of corporate social responsibility
Voluntary Environmental disclosures.

Content

Students will be required to:

Prepare a 2 page newsletter that identifies developments and changes in the period
under consideration.

It is not intended that students provide complete details of changes/ developments

(although you may consider in particular cases that more detail is needed). The
purpose of the newsletter is to alert staff to changes and developments that may
impact on their work and provide enough information about these
changes/developments:
For staff (the intended audience) to understand the nature of the
development/change and its potential impact (so staff can decide whether they
need to investigate further given the nature of their own work); and
Provide sufficient information for staff to be able to obtain further information on
the development/change if they wish to.

The newsletter should, where possible, be in your own words with sources adequately
referenced.

The restriction to 2 pages may seem severe. However, the purpose of the newsletter is to
alert staff to new developments/items of interest. In a working environment staff will
often have limited time and a more detailed or longer newsletter may be ignored!

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You will need to use your own judgement as to whether to include information about
specific changes and developments (and how much information to include).
The lecturer will also be monitoring changes/developments over the period, and
hence will identify major developments that would be expected to be included as a
minimum.

Be selective and discriminate between developments/changes of minor

importance/interest and those of more significance.
Significant items include:
Revised or reissued accounting standards (both national and international)
UIG abstracts
Move towards increased harmonisation between countries
New Bursa Malaysia disclosures for listed companies.

Also ask yourself is the change technical in nature or not?

This may affect the level of detail that you provide.
It is not intended to provide technical material.

Remember the purpose is to make staff aware of changes that impact on them, and where
to go for further information.

What will be included and to what level of detail, will also depend on the actual
changes/developments that occur during the period under consideration and so how much
you consider you need to include in the newsletter.

Although it is required that you include all major developments/ changes, not
all developments/changes necessarily need to be included.

You should also consider the interest and needs of your potential audience when selecting
developments/changes to include and the purpose of the newsletter.

Given the nature of this newsletter, it would be expected that the full 2 pages are used.
This may mean, depending on changes/developments in the period that you may decide
to include additional sections that are sometimes found in such newsletters such as:
'query/question of the period'
profile/interview of a person involved in financial reporting arena.

This is, of course, optional and will depend on the number and nature of changes/
developments that occur over the period under consideration.
Given the target audience it would be assumed that they have a working knowledge
of common terms and abbreviations (such as MASB, MIA) so abbreviations may be
used.
Don't be afraid to be creative. The effectiveness of a newsletter is impacted by how
interesting the readers find it.

Bibliography and referencing

Assignments must include a bibliography (this is to begin on a separate page from

your newsletter).
A bibliography includes all material used in the preparation of your assignment,
not just those referenced within the paper.

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 Remember that when citing electronic sources you must include the date
accessed.

This assignment requires a bibliography and not a reference list.

The reason a bibliography is required (rather than a reference list) is that this will
provide an insight into the range and regularity of your monitoring activities (not
just those specifically referenced within your 'paper') which is part of the criteria
for assessment.
It is expected that the bibliography will be quite long.

The bibliography needs to include specifics of what you have actually accessed and
read that is related to the area - not just a general link to a web site or newspaper etc.
Therefore if you use something like the MASB web site please reference every article
you looked at separately.
The format is the same as a list of references and uses the same conventions.

Only include sources related to the area.

E.G If you to look at a particular publication but most of the articles relate to
taxation issues. It would not be appropriate to include these articles in your
bibliography as these are not directly related to the area of interest and you would
not have 'used' these in preparing the newsletter.

Assignments without a bibliography will not be accepted or marked.

Due to the nature of the assignment it is important to keep your bibliography up to

date as you conduct your research, it can be quite difficult at times to go back when
finalising the newsletter to find the reference for a key article.
Also note that you will need to submit a copy of your bibliography when
requesting an extension. Please see the conditions section of this assessment item.

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 GRADING SCHEME

Mark Range GRADE GRADE DEGREE MARKING RUBRICS

POINT CLASSIFICATI
ON
Comprehensive and excellent grasp of
85 - 100 HD 1 4.00 key concepts
Excellent use of analytical means and
logical arguments
Excellent synthesis of arguments and
FIRST CLASS excellent use of relevant examples
Balanced discussions and excellent
80 84 HD 2 3.75 flow of ideas
Excellent command of language with
no errors
Excellent and consistent referencing
Comprehensive and excellent grasp of
75 - 79 DI 1 3.50 key concepts
Excellent use of analytical means and
logical arguments
Good synthesis of arguments and
SECOND excellent use of relevant examples
UPPER CLASS Balanced discussions and good flow of
70 74 DI 2 3.25 ideas
Excellent command of language with
no errors
Excellent and consistent referencing
Competent grasp of key concepts
65 69 CR 1 3.00 Competent use of analytical means
and logical arguments, albeit with
some errors
SECOND Fair synthesis of arguments and
LOWER CLASS moderate use of relevant examples
60 64 CR 2 2.75 Fairly balanced discussions and fairly
clear flow of ideas
Competent command of language and
limited amount of errors
Satisfactorily is referencing
Basic grasp of key concepts
55 - 59 PS 1 2.50 Less than satisfactory use of analytical
means and logical arguments
Little synthesis of arguments and
hardly any relevant examples
Some evidence of balanced
THIRD CLASS discussions and poor organisation
50 - 54 PS 2 2.00 PASS Satisfactorily command of language
and considerable amount of errors
Relatively flawed referencing
Shows ignorance of key concepts
0 - 49 FL 0.00 Less than satisfactory use of analytical
means and logical arguments
Little synthesis of arguments no
relevant examples
Little or no balanced discussions and
poor organisation
Relatively poor command of language
and unable to expressed ideas clearly
No referencing or poor referencing

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 HELP UNIVERSITY

ASSIGNMENT FEEDBACK/MARKING SHEET

ACC 202
Financial Reporting

1. Student ID:_______________________________________
2. Student ID :_______________________________________
3. Student ID:________________________________________
4.. Student ID:________________________________________

Assessment Criteria Mark Maximum

Achieved Mark

Relevance of materials used 30

Logical flow, sequence and development 10

Evaluation of issues 25

Use of supporting data/evidence 10

Use of referencing system and bibliography 10

Overall presentation 15

Total Mark 100

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 Assignment No.: __

Assignment Cover Sheet

Student Information (For group assignment, please state names of
Grade/Marks
all members)
Name ID

Office
Module/Subject Information
Acknowledgement
Module/Subject Code
Module/Subject Name

Lecturer/Tutor/Facilitator

Due Date
Assignment Title/Topic

Intake (where applicable)

Word Count Date/Time

Declaration

. I/We have read and understood the Programme Handbook that explains on plagiarism, and I/we testify
that, unless otherwise acknowledged, the work submitted herein is entirely my/our own.
. I/We declare that no part of this assignment has been written for me/us by any other person(s) except
where such collaboration has been authorized by the lecturer concerned.
. I/We authorize the University to test any work submitted by me/us, using text comparison software, for
instances of plagiarism. I/We understand this will involve the University or its contractors copying my/our
work and storing it on a database to be used in future to test work submitted by others.

Note:1) The attachment of this statement on any electronically submitted assignments will be deemed
to have the same authority as a signed statement.
2) The Group Leader signs the declaration on behalf of all members.

Signature: Date:

mail:
Feedback/Comments*

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 Main Strengths

Main Weaknesses

Suggestions for improvement

Student acknowledge feedback/comments

Graders signature Students signature:

Date: Date:
Note:
1)A soft and hard copy of the assignment shall be submitted.
2)The signed copy of the assignment cover sheet shall be retained by the marker.
3)If the Turnitin report is required, students have to submit it with the assignment. However, departments may allow
students up to THREE (3) working days after submission of the assignment to submit the Turnitin report. The
assignment shall only be marked upon the submission of the Turnitin report.
*Use additional sheets if required.

15
 Department of Accounting & Finance

ACADEMIC INTEGRITY

Honesty and Responsibility

Academic integrity is an important tenet for HELP University. In pursuit of the highest
standards of academic integrity, the Department of Accounting & Finance holds it
students to the highest ethical standards defined by the Rules and Regulations section of
the Academic Handbook. All students at the Department of Accounting & Finance are
subjected to and are bound by the Student Academic Misconduct Rule to assure academic
honesty. Students are required to sign a pledge on the assignment cover sheet before
submitting your assignments to the Administration Office of the Faculty of Business,
Economics & Accounting.

What is Plagiarism?
Plagiarism is academic dishonesty or academic theft, and it is a serious academic offence.
Plagiarism includes, but is not limited to, the followings:
1. quote, paraphrase or summarize someone elses ideas, theories or data, in whole
or in part, without appropriate acknowledgement
2. borrow ideas, opinion or words, in whole or in part, from other sources without
properly crediting the author(s)
3. use any facts, statistics, diagrams or graphs, in whole or in part, without
acknowledging the source clearly
4. claim or imply original authorship of someone elses ideas, theories or data, in
whole or in part, as your own
5. employ or allow someone to help to revise, amend or write your work and pass
off as your own original work
6. collaborate with or allow other students to copy your work
7. draw on sources more than what you have acknowledged by citations

While a student is not discouraged to discuss an assignment with his/her friends or

classmates, the work he/she submits must be done by the student alone. If a student shares
his/her assignment with other students and they plagiarize it, the student is as guilty as
those students who plagiarized his/her assignment. All parties to plagiarism are
considered equally guilty. Under no circumstances should a student be involved in
collusion with other students unless he/she is permitted to work on an assignment jointly
by the lecturer/tutor. If a student is unsure what constitutes plagiarism, he/she is obliged
to consult the lecturer/tutor on the matter before submission of his/her assignment.

When and How to Reference?

Knowing when and how to cite is a students responsibility. If he/she is in doubt or need
more help on this matter, the student may consult the lecturer/tutor. The following list
comprises some of the sources a student will need to reference. The list is by no means
exhaustive, but simply consists of the most common sources used by students to complete
their work.
1. Books
2. Chapters in books
3. Journal articles

16
 4. Conference papers
5. Newspaper articles
6. Magazines
7. Websites
8. Study guide

Students are advised to cite in the following cases [1]:

1. When he/she quotes two or more words verbatim, or even one word if it is used
in a way that is unique to the source
2. When he/she introduce facts that he/she have found in a source
3. When he/she paraphrase or summarize ideas, interpretations, or conclusions that
he/she find in a source
4. When he/she introduce information that is not common knowledge or that may
be considered common knowledge in your field, but the reader may not know it
5. When he/she borrow the plan or structure of a larger section of a sources
argument (for example, using a theory from a source and analyzing the same
three case studies that the source uses)
6. When he/she build on anothers method found either in a source or from
collaborative work in a lab
7. When he/she build on anothers program in writing computer code or on a not-
commonly-known algorithm
8. When he/she collaborate with others in producing knowledge

In general, a referencing system requires two parts:

1. In-text citations
This is information about a source within the text of an assignment.
2. List of references
This is a list of all sources a student has used to research his/her assignment. It is
alphabetically arranged by author surname and appears immediately after the last
page of an assignment.

Different faculties or departments may have different requirement on how referencing

for an assignment should be done. The various formats used for in-text citations and list
of references are available in the following websites:
1. Harvard System (http://www.adelaide.edu.au/library/guide/gen/harvard.html)
2. Chicago Style (http://www.chicagomanualofstyle.org/index.html)
3. American Psychological Association or APA Style (http://www.apastyle.org)
4. Modern Language Association of America or MLA Style (http://www.mla.org)

Once a student has selected a referencing style for his/her assignment, he/she must follow
the same style consistently throughout the assignment. We strongly suggest that the
student consults the lecturer/tutor about which method to use before submission of
his/her assignment.

What are the Procedures and Penalties for Plagiarism?

1
http://www.yale.edu/bass/writing/sources/plagiarism/warning.html, accessed May 18, 2008.

17
When a lecturer/tutor encounters a possible case of plagiarism, the lecturer/tutor shall
report the matter to the Head of the Department, who then initiates an investigation on
the matter. The following procedures would be carried out:
1. The lecturer/tutor shall provide evidence that substantiates an academic offence
has occurred. The following documentations must be ready prior to reporting of
alleged plagiarism:
a. Copy of the alleged plagiarized assignment
b. Copy of the source material (e.g. articles, websites, newspaper, etc.)
c. Report of plagiarism
d. Any other information that would support the claim of plagiarism
2. If the evidence warrants an accusation of academic offence, the Head of
Department shall establish a Board of Inquiry comprising 3 academic staff. The
Department shall provide all necessary documentations, including report on prior
academic offences if applicable, to the Board of Inquiry.
3. The Board of Inquiry shall put the matter to the student in writing and give
him/her an opportunity to respond to the accusation within 3 working days.
4. The student will be required to attend a meeting with the Board of Inquiry. After
meeting the student, the Board of Inquiry shall decide whether or not the alleged
plagiarism has occurred. The following documentations shall be submitted to the
Head of Department at the end of the meeting:
a. Findings of the investigation
b. Recommended action(s) to be taken or imposed
5. The Head of Department shall review the Board of Inquirys report with
supporting evidence and shall decide on an appropriate action(s) based on the
recommendation of the Board of Inquiry.
6. The decision of the Head of Department shall be put in writing to the student.
Copies of all documentations will be retained in the Department.
7. If the student feels that he/she has been unfairly accused or treated, the student
may appeal to the Head of Department within 5 working days.
8. The Head of Department shall review the appeal and the final decision will be
communicated to the student in writing and a copy will be kept with the
Department. Once a determination of plagiarism and penalty has been made by
the Head of Department, the investigative process will be deemed to have ended
and the student will not be allowed to appeal.

Possible penalties for plagiarism range from mark reduction for the assignment to
expulsion from the University. The student will not be allowed to make up the
assignment. If plagiarism has been found to have occurred, the Department will take
action(s) as determined by the forms of plagiarism implicated:

1. Complete plagiarism
Verbatim copying another persons work without acknowledgement
1st offence : A grade of F in the subject and a warning letter will be
issued
2nd offence : Expulsion from the University at the discretion of the Head
of Department
2. Substantial plagiarism
Near-verbatim copying another persons work by simply altering the order of the
sentences or the format of presentation or by changing a few words or phrases
without acknowledgement.
1st offence : Zero mark on the assignment and a warning letter will be
issued

18
 2nd offence : A grade of F in the subject and a warning letter will be
issued
rd
3 offence : Expulsion from the University at the discretion of the Head
of Department
3. Minimal plagiarism
Acknowledgement is made but paraphrasing by changing and/or eliminating
some words
1st offence : Deduction of 50% of available marks on the assignment and
a warning letter will be issued
2 offence : A grade of F in the subject and a warning letter will be
nd

issued
rd
3 offence : Expulsion from the University at the discretion of the Head
of Department
4. Unintentional plagiarism
Insufficient acknowledgement by not applying citation or quotation marks
correctly
1st offence : Deduction of up to 50% of available marks on the assignment
and a warning letter will be issued
2 offence : A grade of F in the subject and a warning letter will be
nd

issued
rd
3 offence : Expulsion from the University at the discretion of the Head
of Department
Pleading ignorance or unintentional plagiarism does not constitute valid reasons for
plagiarism and will not avoid the penalties from being imposed. Excuses for acts of
plagiarism such as the following, but not limited to, will not be entertained:
1. I dont have time to do the assignment
2. I have too many assignments due on the same day
3. I dont know, I really didnt do it
4. I am not aware
5. I dont understand what plagiarism means
6. I have no intention to plagiarize
7. I forgot to cite the reference
8. I forgot to include the bibliography
9. My English is not good
10. My lecturer/tutor did not explain to me
11. In my country, it is alright to copy someone elses work
12. My friend copied my assignment when I let him/her to look at my assignment
13. My friend copied my assignment when I allow him/her to use my laptop
14. I did my assignment in the computer lab, someone must have copied my work
15. I asked my friend to submit my assignment and he/she copied my work
16. I discussed my assignment with my friends, so our answers are the same/similar
17. Even though I do not have in-text citation but I have bibliography/reference list
Students should be reminded that it is their responsibilities to take due care throughout
their written work to effectively reference or cite when they use others ideas from any
source.

19
 DEPARTMENT OF ACCOUNTING & FINANCE

SEMESTER X, 20XX

SAMPLE FINAL EXAMINATION

Subject Code : ACC202

Subject Name : FINANCIAL REPORTING

This examination carries 70% of the total assessment for this subject.

Examiner(s) Moderator(s)

MR ABC MR XYZ

Day :
Time :
Date :

Time allowed : Reading 10 MINUTES

Writing 3 HOURS

INSTRUCTION(S):

1. This examination consists of FIVE (5) questions.

2. All questions carry equal marks.

3. Students are required to answer ALL questions in the answer book provided.

4. Writing on the examination answer book is NOT permitted during reading time.

5. This is a CLOSED BOOK examination.

6. Students are NOT permitted to retain this examination paper.

7. Students MUST pass this examination in order to pass the subject.

(This examination paper consists of 5 questions in XX printed pages, including cover page)

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Question 1 (20 marks)

Lessee Sdn Bhd, on 1 July 20X4, lease a tractor having a fair value of RM140,000 from
Lessor Sdn Bhd under the following conditions:

The term of the lease is 10 years, non-cancellable, and requires rental payments of
RM22,784 at the end of each year.
The estimated economic life of the tractor is 10 years.
There is no residual value.
Lessee Sdn Bhd pays all executory costs (that is, these are not included in the lease
payments).
The implicit rate of interest in the lease is 10 per cent.

Required:

(a) Calculate the present value of minimum lease payment.

(b) Classify the lease for the lessee.

(c) Prepare a table of calculation of interest charge using the actuarial method.

(d) Prepare the journal entries for the lessee for the first year of the lease.

(e) Prepare the extracts of the statements of profit and loss for the years ended 30 June
20X5 and 30 June 20X6 and the statements of financial positions as at that date.

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Question 2 (20 marks)

Mc Fast Food Bhd, a listed company, operates a funded gratuity scheme for its
employees. Following relevant information has been extracted from the actuarial reports:
30 June 20X4 30 June 20X3
RM million RM million
Present value of defined benefit obligations 900 600
Fair value of plan assets 880 560
Current service cost for the year 25 22
Contributions paid during the year 15 14
Benefits paid during the year 17 15
Expected return on plan assets 5% 6%
Discount rate for plan liabilities 6% 8%

The expected remaining working lives of the employees as at 30 June 20X4 were 15
years.

Required:

Compute the amounts which need to be reported in the Statement of financial position
and the Statements of profit and loss and other comprehensive income for Mc Fast Food
Bhd for the year ended 30 June 20X4.

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Question 3 (20 marks)

Elegent Construction Sdn Bhd has a contract to construct a twin-building in Kuala

Lumpur. The contract price is RM40 million. The construction started in July 20X3 and
was completed in November 20X5.

The following table shows the position of the contract at the end of the year 2013, 2014
and 2015.
20X3 20X4 20X5
RM000 RM000 RM000
Variation to the contract price - increase - - 1,000
Cumulative costs incurred to date 8,750 25,830 32,000
Estimated cost to complete 26,250 11,070 -
Progress billings to date 8,000 29,500 41,000

Elegent Construction accrued profit on the contract using the percentage of completion
method measured by cost to date to total estimated cost.

Required:

(a) Calculate the percentage of completion for 20X3, 20X4 and 20X5.

(b) Prepare extracts of statements of profit and loss, showing complete calculation of
revenues recognised, costs recognised and gross profits for each of the three years.

(c) Prepare extracts of statements of financial position for each of the three years,
showing the gross amounts due from or due to customer.

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Question 4 (20 marks)

(a) ATOF has the following operating segments. The revenues (internal and external),
profits and assets are set out below.

Segment Revenue Profit/loss Total assets

RM000 RM000 RM000
A 12,000 5,000 60,000
B 44,000 8,000 110,000
C 13,000 (1,000) 50,000
D 9,000 (2,000) 75,000
E 16,000 2,000 20,000
F 6,000 1,700 10,000
100,000 13,700 325,000

Required:

Help ATOF determine its reportable segments.

(b) On 23.9.20X5, the board of an entity decided to close down divisions A and B that
made two particular products. The entitys year-end is 31 December.

Division A
The closure costs is estimated at RM600,000. The closure decision was not
communicated to any of those affected and no steps have been taken to implement
the decision.

Division B
The closure costs is estimated at RM400,000. A detailed plan for the closing down
has been agreed by the board on 15.12.20X5 and redundancy notices were sent to
the staffs.

Required:

Explain the treatment of the above restructuring costs.

(c) H Bhd entered into an operating lease contract to rent a building for 5 years at an
annual rental of RM1m. A year after entering the lease, operations of H Bhd was
relocated. H Bhd was unable to terminate the contract.

Required:

Advise the management whether a provision is required.

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Question 5 (20 marks)

Indicate if the following events or transactions are adjusting or non-adjusting items.

If they are adjusting items, discuss the effect on the financial statements.

Year-end was 31.12.X4 and the accounts were authorized for issue on 15 March X5.

(i) Entity makes a provision for doubtful debts of 1% and the amount provided for at
the end of 31.12.X4 was RM500,000. On 15 January X5, a debtor who owed the
entity RM2 m became insolvent.

(ii) Closing inventory was determined as RM1.5 m based on cost. Part of the inventory
of RM200,000 was damaged but the storekeeper expected the goods to be sold
above cost. However, these goods were sold on 19 January X5 for RM120,000.

(iii) Entity signed a contract to acquire a factory building on 10 January X5. The
estimated cost of the building was RM130 m.

(iv) On 28 February X5, the entity decided to close down its shoe making operations
which was identified as a separate operation from the rest of the entitys business.

(v) The factory plant was damaged on 3 March X5 and the recoverable amount was
estimated to be RM1.2 million and the carrying value was RM1.5 million.

(vi) Entity proposed the final ordinary dividend on 1 March X5.

(vii) The entity had provided for a contingent liability for RM425,000 but judgement
made on 12 February X5 was RM500,000.

**END OF EXAMINATION PAPER**

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