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ACCT2011 Reporting on Business Performance
1. Background Information for Group Assignment
Create Green Ltd (CG) is an electric vehicle manufacturing company listed on the Australian Securities
Exchange (ASX). Since 1 July 2022, a CG project team with extensive vehicle design experience, recognised
mechanical engineering skills and high level programming expertise, has been working on Project Self Drive
(SD). The objective of Project SD is to research and develop CG’s first electric self-driving autonomous vehicle.
CG’s project team has total responsibility for all activities undertaken in the research and development phases
of Project SD.
Electric vehicle market data indicates the software developed from Project SD, Think Fast, could be used in
CG’s current line of electric trucks. This is due to the software’s highly adaptable human perception and
decision-making processes. Accordingly, the Project SD was allocated an unlimited budget.
Between 1 July 2022 and 31 December 2022, the project team undertook intensive Project SD research work
into identifying different approaches for achieving self-driving autonomy. Costs of $7,500,000 were incurred.
Due to the project’s revolutionary research findings, an incremental prototype of the Think Fast software,
suitable for CG’s current line of electric trucks, was built, functionally tested, and refined between 1 January
2023 and 30 June 2023 at a cost of $3,500,000.
A recent Australian Federal Government report states, “At 1 January 2023 there were 120,000 registered electric
vehicles in Australia. Due to innovative developments in the commercial electric vehicle market, this statistic is
expected to grow 150% by 2030”. On 1 September 2023, CG entered into negotiations with a transport company
to supply 100 of its electric trucks fitted with the Think Fast software by 30 June 2024.
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You have been onboarded as a graduate financial accountant reporting directly to CG’s Financial Controller.
On your first day, you receive the following email from the Financial Controller:
“Hi, welcome to the team. Have assigned the Project SD costs accounting treatment task to you. Please
consider how to treat these costs in CG’s financial statements for the year ended 30 June 2023 from multiple
perspectives. Looking forward to working with you.”
2. Assignment Questions
REQUIRED:
Your Part A and Part B responses are to be presented in a short answer format.
Part A (14 marks in total, 12 marks for final submission, 2 marks for Draft Part A submission)
Consider the accounting treatment of research work costs and, separately, the incremental prototype costs for
Project SD in CG’s financial statements for the year ended 30 June 2023 from the following perspectives.
(a) From AASB Conceptual Framework (Compilation date 20 December 2021) (AASB CF). Explain how
the research work and incremental prototype costs may or may not satisfy all aspects of the AASB
CF’s:
(i) definition of an asset; and
(ii) recognition criteria.
(b) From AASB 138 Intangible Assets (Compilation date 31 December 2022) (AASB 138).
(i) Explain how AASB 138 addresses problems identified in your Part A (a)(i) and (ii) answers; and
(ii) Identify and justify the appropriate accounting treatment for research work costs and, separately,
incremental prototype costs in CG’s financial statements for the year ended 30 June 2023.
To support all your Part A answers, include relevant AASB CF and AASB 138 paragraph reference(s) and
facts applied from the assignment background information.
(Hint: You may wish to present your Part A responses in a table with headings. Below is a suggested form of
presentation. This can be adapted to a landscape page orientation.)
Part (a)
Research work costs Incremental prototype costs
(a) (i)
(a) (ii)
Part (b)
(b) (i)
(b) (ii) Research work costs Incremental prototype costs
Responses to the following questions will be considered on their ability to apply relevant AASB technical
requirements, present appropriate background information discussion and develop well argued responses. Do
not submit a series of dot points. Marks will be awarded for content as well as structure, and quality of the
communication.
You are not permitted to use artificial intelligence (AI) tools, such as ChatGPT, to generate any part of
your responses. AI tools cannot be relied upon to generate responses that will adequately address the
requirements of this assignment.
Part A, Part B and Part C responses must be in your own words.
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Part B (6 marks in total)
Think back to ACCT1006 and the reflection skills you learnt in that unit. As a reminder, look at the 5Rs
Framework for Reflection resources on Canvas under Group Assignment.
Required:
Using the Relating criteria from the 5Rs Framework for Reflection, reflect on your draft Part A Review
response feedback.
Describe how this feedback impacted your group’s understanding of how the AASB CF and AASB accounting
standard’s requirements can:
(a) conflict; and
(b) collectively, provide useful guidance for financial statement preparers.
Include supporting example(s) in your Part B (a) and Part B (b) responses that show your group’s reflective
experiences.
Part C (20 marks)
Your Part C response is to be presented in an essay format.
“Accounting concepts, definitions and criteria can be ambiguous. Subsequently, further regulation is often
required.”
Discuss this statement. Your persuasive response should include:
• an introduction;
• one (1) argument point from the AASB CF element definitions and recognition criteria perspective;
• one (1) argument point from the AASB 138 perspective; and lastly
• a conclusion that includes a final opinion and valid reason(s).
Both argument points must be accompanied by supporting example(s) developed from your Part A (including
Draft Part A response and feedback) and Part B responses, evidence and/or academic reference(s)*#.
*Supporting examples from your Part A and Part B responses must explain in detail how and why they support the argument point.
#Your references should be from papers published in peer reviewed academic journals - not internet sources such as Wikipedia, not
ACCT2011 course materials such as the Semester 2 2023 slides and tutorial materials, and not textbook chapter references, such as
the Henderson et al textbook. Please look at the library resources for assignment link on Canvas under Group Assignment.
For the final completed group assignment total word limit is 1,500 words. This includes all footnotes,
images and intext references and excluding a reference list and any appendices.
For the Draft Part A response, guide is 450 words. This includes all footnotes, images and intext
references and excluding a reference list and any appendices.
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3. Assessment Criteria
The group assignment represents 20% of your total mark for ACCT2011 and is compulsory. To provide students
with feedback, group assignments will be graded against the assessment criteria and rubric included in
Appendix 1 to this assignment. Note the group assignment will be marked out of 40 marks and converted to a
mark that contributes to 20% of your total mark for ACCT2011.
Academic Honesty
As a student of the University, you are responsible for taking part in your education in an honest and authentic
manner. It is, therefore, expected that you take extra care to ensure that there are no breaches of academic
honesty. All assignments will be manually and electronically checked for plagiarism (copying). Any perceived
breaches of academic honesty will be referred to the Office of Educational Integrity for further investigation and
penalised if verified. You can read more information on what plagiarism is and how to avoid plagiarism from the
University link: https://www.sydney.edu.au/students/academic-integrity/breaches.html
Students are reminded that all sources of support for the group assignment must be acknowledged and failure
to acknowledge such support may potentially breach the University’s academic honesty requirements. You
are not permitted to use artificial intelligence (AI) tools such as ChatGPT to generate any part of your responses.
Their undeclared use will be reported as a major breach of policy for investigation.
Each group member is expected to be involved in the preparation, drafting, proofing and checking of all aspects
of this group assignment including ensuring no breaches of academic honesty. Group members will be held
jointly responsible for the entire submission and awarded the same merit mark. In the event of a breach of
academic honesty the penalty could apply to all members irrespective of which member(s) caused the breach.
