This document is for De Montfort University use and should not be passed to third parties or posted on any website.

Faculty of Business and Law

ACFI2307 Resit/Deferral Assignment Brief – July 2022

Module Title Financial Reporting Assignment

Number
Module Code ACFi2307 Assignment Assignment Re-Assessment
Title
Module Leader Sudarshan Pillalamarri Assignment 30%
Weighting

Assignment Release 7th July 2022

Date:

Submission 12th August 2022 at 12noon

Date/Time:

Assessment Information – What you need to do

This assignment is an individual assignment. 

 
This assignment requires you to address the question set from page 4 onwards of the document.

Criteria for Assessment - How you will be marked

Further information on University mark descriptors can be found here. 

 
Following completion of this assignment students should be able to demonstrate the following:

 The ability to apply numeracy skills, including the ability to manipulate financial and other
numerical data.
 To appraise the impact of the regulatory framework on single entity companies.
 To apply selected accounting standards and discuss their impact upon modern business
practice.
 To discuss the regulatory framework within which accounting operates.
 To demonstrate the ability to communicate, including the ability to present quantitative
and qualitative information together with analysis, argument and commentary in a form
appropriate to the intended audience.

Assignment Brief Template

Page 1 of 6
This document is for De Montfort University use and should not be passed to third parties or posted on any website.

Assessment Details
Please see the assignment question for further Information
There will be a penalty of a deduction of 10% of the mark for work exceeding the word limit by
10% or more.
The word limit includes tables, figures, quotations and citations, but excludes the references list
and appendices.

How to Submit your Assessment

The assessment must be submitted by 12:00 noon (GMT/BST) on 12th August 2022. No paper
copies are required. You can access the submission link through the module web.

 Your coursework will be given a zero mark if you do not submit a copy through Turnitin.
Please take care to ensure that you have fully submitted your work.
 Please ensure that you have submitted your work using the correct file format, unreadable
files will receive a mark of zero. The Faculty accepts Microsoft Office and PDF documents,
unless otherwise advised by the module leader.
 All work submitted after the submission deadline without a valid and approved reason will be
subject to the University regulations on late submissions.

o If work submitted as a reassessment of a previously failed assessment task is submitted

later than the deadline the work will immediately be given a mark of zero per cent
 The University wants you to do your best. However, we know that sometimes events happen
which mean that you can’t submit your coursework by the deadline – these events should be
beyond your control and not easy to predict. You will find information about applying for
extensions and deferrals here.
 Students MUST keep a copy and/or an electronic file of their assignment.
 Checks will be made on your work using anti-plagiarism software and approved plagiarism
checking websites.

Return of Marked Work

You can expect to have feedback returned to you following the assessment board in September
2022 (for UG Programmes) and November 2022 (for PG Programmes). More information on
assessment and feedback can be found here.

Academic Integrity

In submitting a piece of work for assessment it is essential that you understand the University's
requirements for maintaining academic integrity and ensure that the work does not contravene

Assignment Brief Template

Page 2 of 6
This document is for De Montfort University use and should not be passed to third parties or posted on any website.

University regulations. Some examples of behaviour that would not be considered acceptable
include plagiarism, re-use of previously assessed work, collusion with others and purchasing your
assignment from a third party. For more information on academic offences, bad academic
practice, and academic penalties, please read chapter four of our academic regulations.

Academic Support and Your Well-being

Referencing is the process of acknowledging other people’s work when you have used it in your
assignment or research. It allows the reader to locate your source material as quickly and easily
as possible so that they can read these sources themselves and verify the validity of your
arguments. Referencing provides the link between what you write and the evidence on which it is
based.
You identify the sources that you have used by citing them in the text of your assignment
(called citations or in-text citations) and referencing them at the end of your assignment (called
the reference list or end-text citations). The reference list only includes the sources cited in your
text. The main referencing guide can be found here and includes information on the basics of
referencing and achieving good academic practice. It also has tabs for the specific referencing
styles depending on whether you require Harvard style used in business or OSCOLA style used by
the Law school.
The University has a wealth of support services available to students; further information can be
obtained from Student Gateway, the Student Advice Centre, Library and Learning Services and,
most importantly, your Personal Tutor. If you are struggling with your assessments and/or
deadlines please do seek help as soon as possible so that appropriate support and guidance can
be identified and put in place for you. More information can be found on the Healthy DMU
pages.

Assignment Brief Template

Page 3 of 6
This document is for De Montfort University use and should not be passed to third parties or posted on any website.

Assignment Question:
The following trial balance relates to Scala plc at 31 March 2022:

£000 £000
Revenue 85,000
Dividends Received 800
Purchases 20,670
Distribution costs 4,600
Administrative expenses 7,800
Finance Costs 2,500
Interim Dividend Paid 400
Land and Building – at cost 31/3/ 2021 225,000
Accumulated depreciation of building at 1/4/ 95,000
2021
Plant at cost 31/03/2021 184,000
Accumulated depreciation of plant at 1/4/ 2021 46,000
Investment property – at valuation 1/4/2021 75,000
Inventory at 1/4/ 2021 69,700
Trade receivables/ trade payables 56,440 62,950
Bank 15,550
6% loan note (redeemable 2026) 75,000
Deferred tax 9,500
Equity shares of 50p each fully paid 225,000
Retained earnings at 1/4/2021 49,410
Revaluation reserve at 1/4/2021(arising from 13,000
land and buildings)
661,660 661,660

The following notes are relevant:

1) At 1 April 2021, Scala plc had its land and building revalued to £250
million. This valuation includes a value for land of £50 million. The
estimated remaining life of the building at that date was 10 years. The
net book value of Buildings as at 1 April 2021 was £175 million.
Depreciation of buildings is charged on a straight-line basis and is
allocated 60% to cost of sales, 20% to distribution costs and 20% to
administrative expenses.

2) At the year end, a research and development department was

established, this led to a cost of £5 million, including £1 million for
specialised machinery (bought on 1st October 2021). The directors of the

Assignment Brief Template

Page 4 of 6
This document is for De Montfort University use and should not be passed to third parties or posted on any website.

company estimate that £3 million of the expenditure relates to the

development of a new product that will be launched later in 2022 and the
remaining expenses relate to pure research. The new product is
expected to earn substantial profits. Whilst the specialised machinery
has not been recorded, the rest of the figures have been included within
Cost of Sales.

3) All plant is depreciated at 20% per annum (time apportioned where

relevant) using the reducing balance method and charged to cost of
sales.

4) On 31 December 2021, Scala Plc closed a division of the company. The

division’s result from 1 April 2021 to the date of closure, which are
included in the figures in the trial balance were:

£000
Revenue 2,500
Cost of Sales 3,000

The directors of the company decided to sell the plant and machinery
used by the discontinued division and started to locate a buyer. The
plant had a carrying value at 1 April 2021 of £2 million made up of a cost
of £3.5 million and accumulated depreciation of £1.5 million. As there is
demand for such an asset, the company is relatively confident that this
asset would sold in a short amount of time. The current marker value of
the plant is £1.5 million and it would cost £500,000 to dismantle the
machinery to make it available to the purchaser.

5) The investment property is let at commercial rates to tenants who are

not connected to the company in any way. Scala plc adopts the fair
value model in its accounting treatment of the asset. At 31 March 2022,
the property had a value of £82 million.

6) The inventory at 31 March 2022 was valued at cost of £74 million. This
includes £8 million of slow-moving goods. Scala plc is trying to sell these
to another company but has not been successful in obtaining a
reasonable offer. The best price it has been offered is £6 million.

7) The Corporation tax account in the trial balance represents the over-
provision of the previous year’s estimate. The estimated Corporation tax

Assignment Brief Template

Page 5 of 6
This document is for De Montfort University use and should not be passed to third parties or posted on any website.

liability for the year ended 31 March 2022 is £15 million. At 31 March
2021 there were £25 million of taxable temporary differences. The
Corporation tax rate is 20%.

Required:

PART A

a) Prepare for Scala plc, a Statement of Profit or Loss and Other

Comprehensive Income for the year ended 31 March 2022 and
b) A Statement of Financial Position as at 31 March 2022
(Note: A Statement of Changes in Equity is NOT required)

PART B

Prepare a report for the CEO of Scala plc that explains, with reference to
appropriate accounting standards, your treatment of the adjustments to the
accounts for the year ended 31 March 2022.

(1,500 words)

Submission date
Friday 12th August 2022 at 12 Noon

Assessment Criteria %
Part A
Statement of Profit or Loss/ Financial Position 50
Part B
Format of report 5
Technical knowledge and understanding 40
Bibliography/Citations/Harvard referencing 5
100

Assignment Brief Template

Page 6 of 6