USING ACCOUNTING FOR DECISION MAKING ASSIGNMENT STAGE 2: RESTATED FINANCIAL STATEMENTS

Step 1:

Step 1 involves you writing down some of your ideas, reflections and reactions to reading Chapter 4 'Analysing Financial Statements' in the Study Guide Read Chapter 4 ('Analysing Financial Statements') in the Study Guide. Read it like you would a novel or any book, actively seeking to engage with the author (Dr Martin Turner) and to understand what you are reading. What is the author trying to say? Let the author take you on a journey: go with him and see what you think of some of the key ideas and concepts being discussed.

And while you do this, note down key concepts that occur to you. That's right; just write them down as you go along. Also, include any questions that occur to you as you are reading. What do you find confusing, difficult to understand or believe, boring, exciting or surprising? Then include some of your key concepts and questions (KCQs) in your Step 1.

Your personal engagement with the reading is what I am interested in. Do not summarise the readings. I will say it again, do not summarise the readings. I am interested in your reactions, developing understanding, and questions from the readings. I know what the readings say, as I wrote them. So simply giving me a summary of the readings will not be telling me anything I do not already know.

Use the words "I" and "me" in your ASS#2, Step 1. Different people will have different reactions to the readings. Tell me what your reactions actually are. This is what I am interested in. Do not tell me what you think I might want to hear. Be genuine and honest in your reactions to the readings. Give me something of yourself in your Step 1.

Please submit your Step 1 as a Word document.

Step 2:

Step 2 involves you restating your firm's financial statements.

Go to the 'Restated Financial Statements' tab in your firm's spreadsheet. This is where you will input your firm's restated financial statements, once you have prepared them.

You will need to make sure you restate your firm's financial statements for the most recent four (4) years.

Restating your firm's financial statements simply involves you re-organising the way your firm's financial statements are set out. 'Restating' financial statements can sometimes refer to restating a firm's financial statements after balance date to allow for changes that occur after balance date. We are not talking about this type of 'restating' a firm's financial statements. Our task of restating our firm's financial statements involves moving around different items in a firm's financial statements; and to do this we will need to understand what each item is. This is the purpose for us in doing this: to help us look carefully at each item in our firm's financial statements and to develop some initial understanding about what each item means to us.

Restate your firm's financial statements based on material covered in Chapter 4 (Sections 4.2 & 4.3) in the Study Guide. You may see items in your firm's financial statements such as non-controlling interests; investments in associates; futures, options, hedges or derivatives; deferred tax; or movements in foreign currency translation reserves. You may wonder what these are and whether they relate to your firm's operating or financial activities. I encourage you to discuss with other students any issues you (and they) may face in restating your firm's financial statements. Also, participate in the discussion forums with others in the course and comment on each other's blogs.

Post on your blog your comments and responses to restating your firm's financial statements. How did you find this learning task? Did you find it frustrating, confusing or enlightening? And what exactly do you feel you have learnt, or not learnt, about your firm and its financial statements from restating its financial statements?

Restating the financial statements of a firm can be quite time consuming and, at times, a little frustrating, especially when you do it for the first time. Indeed, you may feel this may be quite an understatement when you are in the middle of restating your firm's financial statements!

However, 'all' you will be doing when restating your firm's financial statements will be moving around the various items in your firm's financial statements, for example moving your firm's assets from current assets and non-current assets to operating assets and financial assets. Still all the same items; just thoughtfully put under different headings.

Restating your firm's financial statements will support you to look at each item in your firm's financial statements. Most people usually find it to be an interesting and challenging learning task. Maria Tyler provides an example of re-stating (using her company, Wesfarmers Ltd) in her lectures which are available in Moodle, and there is an Index of what each lecture covers in the top central panel of Moodle.

Include in your assignment (as a separate Word document) a brief commentary on any issues or concerns you had in restating your firm's financial statements and the results of your discussions with other students. Also submit (online) your firm's spreadsheet with your restated financial statements included.

Step 3:

Step 3 involves you identifying three products or services of your firm and estimating/guessing their selling price and variable cost. You will also comment on the contribution margins you calculate as well as identify constraints and briefly comment on them. Remember, do not spend too long on Step 3 (it is worth just 4 marks). If you have trouble easily identifying three specific products or services of your firm, then make some assumptions about what specific products/services your firm might have. You will also likely need to guess the selling price and variable cost of each product/service. Try to make your assumptions reasonably realistic. We are more interested in your understanding of contribution margins and constraints, rather than the accuracy of your 'guestimated' products/services and their related sales prices and variable costs.

Identify three products or services of your firm. For each product or service of your firm, estimate (or guess) their selling price and variable cost and then calculate their contribution margin. See Section 6.4 in Chapter 6 of the Study Guide for guidance on what are variable costs and contribution margins. You might also like to see Section 8.2 in Chapter 8 of the Study Guide.

Discuss why the contribution margins for each of your firm's three products/services might differ or be similar. Why might your firm produce a range of products/services with different contribution margins? Why not only produce the product/service with the highest contribution margin?

Many companies can face constraints on their capacity to produce products or services. For example, for Ryman Healthcare one constraint might include being able to find and purchase suitable sites for new retirement villages. As most people who go into retirement villages go into villages within 10 kilometres of their previous home, Ryman Healthcare needs to find large, level sites for retirement villages in suburban areas where there are a significant number of older people.

Identify (or guess) one or more resource constraints your firm may face, and also perhaps any market constraints you feel may impinge on your firm.

In what ways might these constraints be relevant when deciding whether or not (and how much) of the three products or services of your firm that you have identified, your firm should produce and sell?

Step 4:

Step 4 involves you providing (and receiving) feedback to three other students in our course on their draft ASS#2. If you wish, these can be the same students you provided feedback to in ASS#1.

The main benefit of Step 4 is in giving quality and thoughtful feedback to others in our course. The process of thinking about the feedback you give to others in will help you greatly with your own assignment as you think about what the assignment requires and how others have addressed these requirements for their own companies.

Prior to 5.00pm Friday of Week 7, please:

• post draft work of your ASS#2 on your blog; and
• provide a link to your blog on the Draft ASS#2 Feedback forum (which you should already have done as part of your ASS#1) and post in the Draft ASS#2 Feedback forum a comment that your draft ASS#2 is ready for student feedback and, if you wish, specific areas where you would particularly value feedback for your ASS#2.

Prior to 5.00pm Friday of Week 8, please ensure you have provided quality feedback to the three students you have been asked to give feedback to. Include the feedback you have given to the three students in the course in your ASS#2. If you wish, you can include and/or comment on other feedback you may have provided other people in our course on their ASS#2.

Also, comment in your ASS#2 whether or not you found feedback from other students useful and why this was the case. You can include in your discussion both how useful (or not) you found feedback from the other three students asked to provide you with feedback and also any feedback you may have received from other students in the course through your interactions with them f2f, on discussion forums and through other means.

ASS2# FEEDBACK - https://martinturneraccounting.com/ass2-general-feedback/

Assignment Link - https://www.dropbox.com/s/gs0ksj8lmmmgcpi/Assignment.zip?dl=0