ACCT2011 CGU Classification and Accounting for Liabilities S1,2025

1. ACCT2011 Overview 

This assignment requires students to analyse financial reporting issues faced by GreenTech Solutions Ltd, a renewable energy company, and Zenith Manufacturing, an industrial equipment manufacturer. Students will work in groups of three to apply relevant accounting standards and demonstrate critical thinking in their responses. The assignment consists of written analysis and a group video presentation. 

The two scenario dialogues will be provided in the appendix. Students must document their use of AI in their responses and critically evaluate the AI-generated content before presenting their own analysis. 

Group Formation 

• Students must work in groups of three. Bentley students will be assigned into groups on BB (or per tutor's instruction). 
• Each member should contribute to both the written response and the video presentation.

2. ACCT2011 Assignment Tasks 

2.1 Written component check list (Total of 30 marks, all three members will be given the same marks)

Step 1: AI-Generated Initial Response (2 marks, 1 mark per scenario)

For each scenario, you are required to use an AI tool to generate an initial response based on your own prompt. 

• Scenario 1: AI response must be limited to 200 words. 
• Scenario 2: AI response must be limited to 100 words per section (one section for provision and one section for the potential fine). 
• If you choose to use the entire assignment question as the prompt, simply state 'We uploaded the question directly to AI'. 
• You do not have to use your first AI prompt and AI-generated response. Instead you should select the most suitable one for submission.

Step 2: Critical Evaluation and Refinement (6 marks, 3 marks per scenario) 

• Summarize key changes and improvements made to the AI-generated response. 
• Justify why changes were necessary, including issues related to accuracy, clarity, and relevance to AASB standards.
• You may choose to complete this step after finalising the full written responses in Step 3 to ensure a thorough evaluation. 

Step 3: Final Written Response (22 marks, 11 marks per scenario) 

Provide a well-structured, fully developed response for each scenario, address the specific tasks outlined in the scenario: 

Scenario 1:

Respond to Mr. Johnson's email by preparing a detailed and well- structured response (11 marks) 

1. Analyse the classification of offshore wind turbines at GreenTech Solutions as either a single CGU or separate CGUs. 
2. Assess operational independence, considering whether individual turbines can generate cash flows separately.
3. Evaluate revenue generation, determining if offshore turbines generate revenue independently from onshore facilities. 
4. Reference AASB 136, using relevant illustrative examples or other examples to justify your classification approach. 
5. .Ensure clarity and professionalism, with an appropriate subject line reflecting the email content.

Scenario 2: 

Assess the recognition of provision and potential fines. 

Part 1: Warranty (5.5 marks) 

1. Determine whether the warranty discussed in the dialogue meets the definition of a provision under AASB 137. 
2. Justify your reasoning by assessing the criteria for recognizing a provision, including the existence of a present obligation, probable outflows, and reliable estimation of the liability. 
3. Provide a journal entry to reflect the appropriate accounting treatment, assuming the company's sales revenue this year is $2.5 million. Explain the rationale behind the debit and credit entries. 

Part 2: Potential fines (5.5 marks) 

1. Determine whether the warranty discussed in the dialogue meets the definition of a provision under AASB 137. Justify your response. 
2. If the company determines that incurring a fine is likely but the exact amount is uncertain, explain how it should be accounted for under AASB 137. 

It is OK to take the AI produced responses from steps 1 and 2 and use those as a base for your response, editing the AI response as needed.Each final version of the response must be within 500 wordsper task.

3. Video Presentation - Professional Discussion and Critical Evaluation

Presentation Quality 

• Clarity & Engagement: The discussion should be structured like a real workplace meeting. 
• Use of Visuals: A quality PowerPoint presentation (using Microsoft PowerPoint or Canva.com) must support the discussion. 
• Team Interaction: Each graduate accountant should contribute meaningfully. 
• Professionalism: Language, tone, and delivery should reflect a professional accounting discussion.

3.  ACCT2011 Submission Requirements 

• Format: Submit a single document (Word or PDF) via Turnitin. 
• Video Submission: Group submission instructions will be given separately on BB. 
• Length: Written report: 1,500-2,500 words | Video: 10 minutes 
• Referencing: Use AASB standards and cite sources (APA 6th) where applicable.

Appendix B - Peer Assessment Form 

Scenario 1: 

You are a graduate accountant at Prestige Accounting Firm, accompanying the senior partner, Mr. Johnson, on a visit to GreenTech Solutions Ltd, a company specializing in renewable energy technologies. The client is seeking advice on whether they should report their two facilities in the Southern Region as one or separate cash-generating units (CGUs). You sit down with Mr. Johnson and GreenTech Solutions' finance manager, Mr. Turner, to discuss the situation. 

Appendix B - Peer Assessment Form 

Mr. Johnson has emailed you, Mathew, the Graduate Accountant, with specific tasks to carry out after the meeting. These tasks are focused on determining the appropriate classification of GreenTech's offshore wind turbines for financial reporting purposes. The email outlines the necessaryanalysis and research you need to conduct to arrive at a recommendation.

Your task 

Please prepare a detailed response to Mr. Johnson's email, addressing each task outlined and confirming your understanding of the required analysis. Make sure your subject line reflects the content of your email. You should follow the three steps of instruction outlined in page one and two when completing this task.

Appendix B - Peer Assessment Form 

Scenario 2: Sunny Ltd. provides a warranty to customers who buy its ski boards 
Case Study: Sunny Limited 
Scene: Boardroom of Sunny Limited 
Participants:

Mark Shein (Finance Manager) 

• Alice Turner (Managing Director) 
• James Cooper (Health & Safety Officer) 
• Sophia Reed (Marketing Director)

Alice Turner: (smiling) Good morning, everyone. Before we start, I'd like to officially welcome Mark Shein, our new Finance Manager. Mark joined us last week, and we're looking forward to working with him.

Mark Shein: (smiling warmly) Thank you, Alice, and good morning, everyone. It's great to be here. I've already heard so much about Sunny Limited's commitment to innovation, and I'm excited to contribute to the team.

James Cooper: (nodding) Morning, Mark. Welcome aboard. 

Sophia Reed: (smiling) Good to have you with us, Mark. 

Mark Shein: (leaning forward slightly) Thanks, James and Sophia. I appreciate the warm welcome. I called the meeting today to get some clarity on two key issues that will impact our financial reporting: the product warranty obligations and the installation of smoke filters at the factory. I'll need your input to ensure we approach these correctly.

Alice Turner: (nodding) Absolutely, Mark. Why don't we start with the warranty? 

Mark Shein: (turning to Alice) That works. Alice, can you give me a quick overview of our warranty terms? 

Alice Turner: Sure. As part of our sales terms, we offer a one-year warranty for our skis. If there are any manufacturing defects, we repair or replace the product at no cost to the customer. 

Mark Shein: (jotting down notes) Got it. Do we have any data on past claims to give us an idea of what to expect this year? James Cooper: (jumping in) Based on historical data, our warranty costs average about 3% of annual sales. For example, last year, with sales of $2 million, our warranty claims totalled around $60,000. Mark Shein: (nodding) That's helpful context. Are there any indications this percentage might change this year?

Appendix B - Peer Assessment Form 

Mark Shein: (closing his notebook) Thanks, everyone. I'll be in touch as things progress. Have a great day! 

Your Tasks: 

Part 1 

Does the warranty discussed in the dialogue meet the definition of a provision under AASB 137? Why or why not? Assuming the company's sales revenue this year is $2.5 million, how should the accountant treat the warranty provision, provide your journal entry and reasoning. 

Part 2 

Should Sunny Ltd. recognize a provision, disclose a contingent liability, or take no action for the potential fine? Justify your response based on AASB 137. If the company believes it is likely to incur a fine but the exact amount is uncertain, how should it be accounted for under AASB 137.