reporting, measurement and disclosure of revenue at Aristocrat Leisure Ltd in australia

the assignment requires to analyse the reporting, measurement and disclosure of REVENUE for the above company(.Aristocrat Leisure Ltd in Australia )Please refer to the Subject Outline page no 11 and 12 for the assessments details.

.Things to consider: You can use EBSCO database, IBIS world, IGI, Google scholar . use more recent sources. use genuine sources that is relevant to the company topic. at least 8 appropriate source for reference and minimum 2 peer review academic journal article. I have attached the sample assessment, and subject outline from there yow will get the knowledge of entire assessment details format . Please follow that format .just remember this company is an australian company so everything should be under Australian policy.

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ACC701 FINANCIAL ACCOUNTING T224
All information in the Subject Outline is correct at the time of approval. KOI reserves the right to make changes to the
Subject Outline if they become necessary. Any changes require the approval of the KOI Academic Board and will be
formally advised to those students who may be affected by email and via Moodle.
Information contained within this Subject Outline applies to students enrolled in the trimester as indicated
1. General Information
1.1 Administrative Details
Associated HE Award(s)
Graduate Diploma of Business
Master of Accounting
Master of Professional Accounting
Duration
1 trimester
Level
Postgraduate
Subject Coordinator
Meth Hewa
meth.hewa@koi.edu.au
P: +61 (2) 9283 3583
L: Level 1, 545 Kent St.
Consultation: via Moodle or by
appointment
1.2 Core/Elective
This is a core subject for the Master of Accounting and the Master of Professional Accounting and
elective subject for the Graduate Diploma of Business.
1.3 Subject Weighting
Indicated below is the weighting of this subject and the total course points.
Subject Credit Points
Total Course Credit Points
4
GDBus 32;
MAcc 48; MPA 64
1.4 Student Workload
Indicated below is the expected student workload per week for this subject
No. Timetabled Hours/Week*
No. Personal Study
Hours/Week**
Total Workload Hours/Week***
3 hours/week plus supplementary online
material
7 hours/week
10 hours/week
*
Total time spent per week at lectures and tutorials
**
Total time students are expected to spend per week in studying, completing assignments, etc.
***
Combination of timetable hours and personal study.
1.5 Mode of Delivery Mode of Delivery Classes will be face-to-face or hybrid. Certain classes will
be online (e.g., special arrangements).
1.6 Pre-requisites
ACC700 Principles of Accounting
1.7 General Study and Resource Requirements
o Students are expected to attend classes with the weekly worksheets and subject support material
provided in Moodle. Students should read this material before coming to class to improve their
ability to participate in the weekly activities.
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o Students will require access to the internet and their KOI email and should have basic skills in
word processing software such as MS Word, spreadsheet software such as MS Excel and visual
presentation software such as MS PowerPoint.
o Computers and WIFI facilities are extensively available for student use throughout KOI. Students
are encouraged to make use of the campus Library for reference materials.
Resource requirements specific to this subject: Students should have a non-programmable calculator.
Applications in smartphones will not be sufficient to perform the required calculations in class.
1.8 Academic Advising
Academic advising is available to students throughout teaching periods including the exam weeks. As
well as requesting help during scheduled class times, students have the following options:
•
•
•
•
•
Consultation times: A list of consultation hours is provided on the homepage of Moodle where
appointments can be booked.
Subject coordinator: Subject coordinators are available for contact via email. The email address of
the subject coordinator is provided at the top of this subject outline.
Academic staff: Lecturers and Tutors provide their contact details in Moodle for the specific
subject. In most cases, this will be via email. Some subjects may also provide a discussion forum
where questions can be raised.
Head of Program: The Head of Program is available to all students in the program if they need
advice about their studies and KOI procedures.
Vice President (Academic): The Vice President (Academic) will assist students to resolve complex
issues (but may refer students to the relevant lecturers for detailed academic advice).
2. Academic Details
2.1 Overview of the Subject
This subject introduces students to special topics relating to Australian financial reporting with an
emphasis on recognition and measurement of assets and liabilities. It comprehensively covers a
number of Australian-International Financial Reporting Standards relevant to reporting problems in
particular areas (such as cash flows and revenue), and with reference to particular types of assets and
liabilities (such as intangible assets, share-based payments, leases and complex financial instruments).
In addition, the expanded disclosure is reviewed along with various proposals for strengthening external
financial reporting.
2.2 Graduate attributes for postgraduate courses
Graduates of Postgraduate courses from King’s Own Institute will achieve the graduate attributes
expected from successful completion of a Master’s degree under the Australian Qualifications
Framework (2nd edition, January 2013). Graduates at this level will be able to apply an advanced body
of knowledge from their major area of study in a range of contexts for professional practice or
scholarship and as a pathway for further learning.
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King’s Own Institute’s generic graduate attributes for master’s level degree are summarised below:
KOI Master’s Degree Graduate
Attributes
Detailed Description
Knowledge
Current, comprehensive and coherent knowledge,
including recent developments and applied research
methods
Critical Thinking
Critical thinking skills to identify and analyse current
theories and developments and emerging trends in
professional practice
Communication
Communication and technical skills to analyse and
theorise, contribute to professional practice or
scholarship, and present ideas to a variety of audiences
Research and Information Literacy
Cognitive and technical skills to access and evaluate
information resources, justify research approaches and
interpret theoretical propositions
Creative Problem Solving Skills
Cognitive, technical and creative skills to investigate,
analyse and synthesise complex information, concepts
and theories, solve complex problems and apply
established theories to situations in professional practice
Ethical and Cultural Sensitivity
Appreciation and accountability for ethical principles,
cultural sensitivity and social responsibility, both
personally and professionally
Leadership and Strategy
Professional Skills
Initiative, leadership skills and ability to work
professionally and collaboratively to achieve team
objectives across a range of team roles
Expertise in strategic thinking, developing and
implementing business plans and decision making under
uncertainty
High level personal autonomy, judgement, decisionmaking and accountability required to begin professional
practice
Across the course, these skills are developed progressively at three levels:
o Level 1 Foundation – Students learn the skills, theories and techniques of the subject and apply
them in stand-alone contexts
o Level 2 Intermediate – Students further develop skills, theories and techniques of the subject
and apply them in more complex contexts, beginning to integrate the application with other
subjects.
o Level 3 Advanced – Students have a demonstrated ability to plan, research and apply the skills,
theories and techniques of the subject in complex situations, integrating the subject content with a
range of other subject disciplines within the context of the course.
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2.3 Subject Learning Outcomes
Listed below, are key knowledge and skills students are expected to attain by successfully completing
this subject:
Subject Learning Outcomes
Contribution to Graduate Attributes
a) Explain and apply the concepts and regulations relating to
financial accounting in accounting settings
b) Articulate measurement issues related to the covered
topics; and locate and implement the disclosure
requirements related to the covered topics
c) Identify and solve financial accounting problems by
applying analytical and problem solving techniques
d) Demonstrate technical competence in the relevant complex
areas of accounting where measurement and recognition
judgements need to be made.
2.4 Subject Content and Structure
Below are details of the subject content and how it is structured, including specific topics covered in
lectures and tutorials. Reading refers to the text unless otherwise indicated.
Weekly Planner:
Week
(beginning)
1
01 July
2
08 July
3
15 July
4
22 July
5
29 July
6
05 Aug
Topic Covered in Each Week’s
Lecture
Reading(s)
Expected work
as listed in Moodle
Accounting for regulation and the
conceptual framework
Ch.1
Analysis
Exercises
1.2, 1.4, 1.6, 1.12, 1.13
Revenue
Ch.16
AASB 15
Analysis
Exercises
16.1, 16.2, 16.6, 16.10
Accounting for non-current assets,
property, plant and equipment
Ch. 6
AASB 116
Analysis Exercises
6.2, 6.3, 6.11, 6.13
Intangible assets
Ch. 7
AASB138
Analysis Exercises
7.9, 7.10, 7.11, 7.12
Formative Assessment:
Moodle MC Quiz
Leases
Ch. 11
AASB 16
Analysis Exercises
11.3, 11.6, 11.8, 11.11
Mid trimester exams
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Week
(beginning)
7
12 Aug
8
19 Aug
Topic Covered in Each Week’s
Lecture
Provisions
Employee benefits
Reading(s)
Ch. 9
AASB 137
Ch. 10
AASB 119
Expected work
as listed in Moodle
Analysis Exercises
9.17, 9.8, 9.11, 9.14
Analysis Exercises
10.9, 10.10, 10.19, 10.20
9
26 Aug
Share-based payments
Ch.15
AASB 2
Deferred mid trimester
exams – see Section 2.6
below for more information
Analysis Exercises
15.8, 15.9, 15.11, 15.12
10
02 Sep
Financial instruments
Ch. 12
AASB 7, 9, 132
Analysis Exercises
12.1, 12.2, 12.5, 12.7,
12.10
11
09 Sep
Earnings per share
Ch. 20
Analysis Exercises
20.3, 20.6, 20.9, 20.10
12
16 Sep
Revision
13
23 Sep
Study review week and Final
Exam Week
14
30 Sep
Examinations
Continuing students – enrolments
for T324 open
15
07 Oct
16 / 17
14 Oct
Analysis Exercises
9.16, 11.4,14.10, 10.15,
11.3, 19.7
Please see exam timetable for exam date, time
and location
Student Vacation begins
New students – enrolments for T324 open
● Results Released
● Review of Grade Day for T224 – see Sections 2.6 and 3.2 below for relevant
information.
● Certification of Grades
NOTE: More information about the dates will be provided at a later date through
Moodle/KOI email.
T324 28 Oct 2024
28
Oct24
Week 1 of classes for T324
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2.5 Public Holiday Amendments
Please note: KOI is closed on all scheduled NSW Public Holidays.
There are no public holidays during the teaching weeks of this trimester
2.6 Review of Grade, Deferred Exams & Supplementary Exams/Assessments
Review of Grade:
There may be instances when you believe that your final grade in a subject does not accurately reflect
your performance against the marking criteria. Section 8 of the Assessment and Assessment Appeals
Policy (www.koi.edu.au) describes the grounds on which you may apply for a Review of Grade.
If you have a concern about your marks and you are unable to resolve it with the Academic staff
concerned, then you can apply for a formal Review of Grade as explained in section 3.2(e) Appeals
Process below. Please note the time limits for requesting a review. Please ensure you read the Review
of Grade information before submitting an application.
Review of Grade Day:
Final exam scripts will not normally be returned to students. Students can obtain feedback on their exam
performance and their results for the whole subject at the Review of Grade Day. KOI will hold the Review
of Grade Day for all subjects studied in T224. The ROG day will be in Week 16 / 17, the date will be
announced at a later date and the students will be notified through Moodle/KOI email.
Only final exams and whole subject results will be discussed as all other assessments should have been
reviewed during the trimester. Further information about Review of Grade Day will be available through
Moodle.
If you fail one or more subjects and you wish to consider applying for a Review of Grade you are
STRONGLY ADVISED to attend the Review of Grade Day. You will have the chance to discuss your
final exam and subject result with your lecturer, and will be advised if you have valid reasons for applying
for a Review of Grade (see Section 3.2 below and the Assessment and Assessment Appeals Policy).
A formal request for a review of grade may not be considered unless you first contact the subject
coordinator to discuss the result.
Deferred Exams:
If you wish to apply for a deferred exam because you are unable to attend the scheduled exam, you
should submit the Assignment Extension / Exam Deferment Form available contacting
academic@koi.edu.au as soon as possible, but no later than three (3) working days of the assessment
due date.
If you miss your mid-trimester or final exam there is no guarantee you will be offered a deferred exam.
You must apply within the stated timeframe and satisfy the conditions for approval to be offered a
deferred exam (see Section 8.1 of the Assessment and Assessment Appeals Policy and the Application
for Assignment Extension or Deferred Exam Forms). In assessing your request for a deferred exam,
KOI will take into account the information you provide, the severity of the event or circumstance, your
performance on other items of assessment in the subject, class attendance and your history of previous
applications for special consideration.
Deferred mid-trimester exams will be held before the end of week 9. Deferred final exams will be held
on two days during week 1 or 2 in the next trimester. You will not normally be granted a deferred exam
on the grounds that you mistook the time, date or place of an examination, or that you have made
arrangements to be elsewhere at that time; for example, have booked plane tickets.
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If you are offered a deferred exam, but do not attend you will be awarded 0 marks for the exam. This
may mean it becomes difficult for you to pass the subject. If you apply for a deferred exam within the
required time frame and satisfy the conditions you will be advised by email (to your KOI student email
address) of the time and date for the deferred exam. Please ensure that you are available to take the
exam at this time.
Marks awarded for the deferred exam will be the marks awarded for that item of assessment towards
your final mark in the subject.
Supplementary Assessments (Exams and Assessments):
A supplementary assessment may be offered to students to provide a final opportunity to demonstrate
successful achievement of the learning outcomes of a subject. Supplementary assessments are only
offered at the discretion of the Board of Examiners. In considering whether or not to offer a
supplementary assessment, KOI will take into account your performance on all the major assessment
items in the subject, your attendance, participation and your history of any previous special
considerations.
If you are offered a supplementary assessment, you will be advised by email to your KOI student email
address of the time and due date for the supplementary assessment – supplementary exams will
normally be held at the same time as deferred final exams during week 1 or week 2 of the next trimester.
You must pass the supplementary assessment to pass the subject. The maximum grade you can
achieve in a subject based on a supplementary assessment is a PASS grade.
If you:
o are offered a supplementary assessment, but fail it;
o are offered a supplementary exam, but do not attend; or
o are offered a supplementary assessment but do not submit by the due date;
you will receive a FAIL grade for the subject.
Students are also eligible for a supplementary assessment for their final subject in a course where they
fail the subject but have successfully completed all other subjects in the course. You must have
completed all major assessment tasks for the subject and obtained a passing mark on at least one of
the major assessment tasks to be eligible for a supplementary assessment.
If you believe you meet the criteria for a supplementary assessment for the final subject in your course,
but have not received an offer, complete the Complaint, Grievance, Appeal Form and send your form
to reception@koi.edu.au. The deadline for applying for supplementary assessment is the Friday of the
first week of classes in the next trimester.
2.7 Teaching Methods/Strategies
Briefly described below are the teaching methods/strategies used in this subject:
o Lectures (1 hour/week) are conducted in seminar style and address the subject content, provide
motivation and context and draw on the students’ experience and preparatory reading.
o Tutorials (2 hours/week) include class discussion of case studies and research papers, practice
sets and problem-solving and syndicate work on group projects. Tutorials often include group
exercises and so contribute to the development of teamwork skills and cultural understanding.
Tutorial participation is an essential component of the subject and contributes to the development
of many of the graduate attributes (see section 2.2 above). Tutorial participation contributes
towards the assessment in many subjects (see details in Section 3.1 for this subject).
Supplementary tutorial material such as case studies, recommended readings, review questions
etc. will be made available each week in Moodle.
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o Online teaching resources include class materials, readings, model answers to assignments and
exercises and discussion boards. All online materials for this subject as provided by KOI will be
found in the Moodle page for this subject. Students should access Moodle regularly as material
may be updated at any time during the trimester
o Other contact – academic staff may also contact students either via Moodle messaging, or via
email to the email address provided to KOI on enrolment.
2.8 Student Assessment
Provided below is a schedule of formal assessment tasks and major examinations for the subject.
Assessment Type
Assessment 1:
Formative assessment
Assessment 2:
When Assessed
Weighting
Learning Outcomes
Assessed
Week 4
0%
a, b, c
Week 6
20%
a, b, c, d,
Week 9
30%
c, d
Final Exam Week
50%
a, b, c, d
Mid trimester test
Assessment 3:
Case study
Assessment 4: Final examination
2 hours + 10 mins reading time
Requirements to Pass the Subject:
To gain a pass or better in this subject, students must gain a minimum of 50% of the total available
subject marks.
2.9 Prescribed and Recommended Readings
Provided below, in formal reference format, is a list of the prescribed and recommended readings.
Prescribed Text:
Loftus, J., 2022. Financial reporting. 4th ed. Milton, QLD John Wiley and Sons Australia Ltd. Available from:
ProQuest Ebook Central.
Recommended Readings:
Abeysekera, I., 2021. Intellectual Capital and Knowledge Management Research towards Value Creation.
From the Past to the Future. Journal of Risk and Financial Management, 14(6), p.238. (Link will be
provided on Moodle)
Abeysekera, I. 2022. A framework for sustainability reporting. Sustainability Accounting, Management and
Policy Journal, Vol. 13 No.6, pp. 1386-1409. (Link will be provided on Moodle)
Abeysekera, I., 2023. Correspondence between theory and methodology: a case study of accounting for
the environment in organisational research. Environmental Research Communications, 5(5),
p.055005.
Abeysekera, I., 2023. Innovation and business performance in Australia: Role of entrepreneurship and
intrapreneurship in a crisis. Frontiers in Psychology, 14, p.1126313.
Carlon, S., Mladenovic-McAlpine, R., Palm, C., Mitrione, L., Kirk, N. and Wong, L., 2021. Financial
Accounting: Reporting, Analysis and Decision Making. 7th ed. Wiley.
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Hogget, J., Medlin, J., Chalmers, K., Beattie, C., Hellmann, A. and Maxfield, J., 2021. Accounting. 11thed.
Queensland: John Wiley and Sons Australia, Ltd. Available from: ProQuest Ebook Central.
Kamaruddin, K. and Abeysekera, I., 2021. Intellectual Capital and Sustainable Economic Performance in
the Public Sector: The Context of the New Public Management in Malaysia. Sustainability, 13(14),
p.7885.
Lu, Y. and Abeysekera, I., 2021. Do investors and analysts value strategic corporate social responsibility
disclosures? Evidence from China. Journal of International Financial Management & Accounting,
32(2), pp.147-181. (Link will be provided on Moodle)
Yang, Y. & Abeysekera, I. 2022. Underlying Profits and Financial Reporting Quality in Australia.
International Journal of Business Information Systems, Vol. 40, No. 1, pp. 1-23. (Link will be provided
on Moodle)
Wu, M. and Abeysekera, I., 2023. Financial reporting quality of ESG firms listed in China. Plos one, 18(6),
p.e0284684.
Australian Accounting Standards:
Australian Accounting Standards are available for viewing or downloading from the AASB’s homepage
(http://www.aasb.gov.au/).
References available from EBSCOhost research databases:
o
o
o
o
o
o
o
o
o
o
o
o
Financial Review (Australia)
Accounting and Finance
Accounting, Auditing & Accountability Journal
Accounting Research Journal
Accounting Review
Acuity
Australasian Accounting, Business and Finance Journal
Australian Journal of Accounting Education
Australian Journal of Management
In The Black
Journal of Accounting and Economics
Journal of Applied Research in Accounting and Finance
Useful Websites:
The following websites are useful sources covering a range of information useful for this subject. However,
most are not considered to be sources of Academic Peer Reviewed theory and research. If your
assessments require academic peer reviewed journal articles as sources, you need to access such
sources using the Library database, Ebscohost, or Google Scholar. Please ask in the Library if you are
unsure how to access Ebscohost. Instructions can also be found in Moodle.
The following websites may be useful in interpreting the International AASB Standards:
o
o
o
o
Australian Accounting Standards Board www.aasb.gov.au/
CPA Australia www.cpaaustralia.com.au
Chartered Accountants Australia and New Zealand www.charteredaccountants.com.au/
Institute of Public Accountants www.publicaccountants.org.au/
o Proactive Accountants Network http://proactiveaccountants.net/
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3. Assessment Details
3.1 Details of Each Assessment Item
The assessments for this subject are described below. The description includes the type of
assessment, its purpose, weighting, due date and submission requirements, the topic of the
assessment, details of the task and detailed marking criteria, including a marking rubric for essays,
reports and presentations. Supplementary assessment information and assistance can be found in
Moodle.
KOI expects students to submit their own original work in both assignments and exams, or the original
work of their group in the case of group assignments. Material in assignments which comes from the
work of others must be appropriately acknowledged.
Assessment 1
Assessment Type: Formative Assessment – Online Quiz (Compulsory- no weight)
Purpose: This assessment is designed to reinforce subject content taught each week allowing
students to apply accounting principles to analyse and evaluate student comprehension, learning
needs, and academic progress. The purpose of this assessment is to promote learning by considering
the progress of each individual student at the early stage of trimester. This contributes to learning
outcomes a, b and c.
Value: 0%
Due Date: Week 4 Sunday 11.59 pm.
Topic: Weekly subject content.
Task Details:
Each student is required to attempt the diagnostic online quiz through Moodle during week 4. This quiz
consists of 10 multiple choice questions that will cover contents from topics 1, 2 and 3. This assessment
is not graded.
This quiz will be located on the KOI Moodle subject homepage and will close at 11.59pm Sunday of
Week 4.
Assessment 2
Assessment Type: Mid trimester test – Individual Assessment – invigilated open book.
Purpose: This assessment is designed to reinforce subject content taught during the trimester. This
contributes to learning outcomes a, b, c, d.
Value: 20%
Due Date: Week 6
Topic: Weeks 1 to 5 subject content.
Task Details: The mid trimester test will be 60 minutes duration, held in Lecture class in week 6.
Students are expected to bring a non-programmable calculator and writing pens to the test. No other
materials will be permitted.
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Assessment 3
Assessment Type: Individual research assessment
Purpose: To allow students to apply the technical knowledge of relevant accounting standards to
financial reporting settings. This assessment relates to learning outcomes c and d.
Value: 30%
Due Date: Week 9 – 8:00 pm Wednesday of Week 9
Submission: Submission must be made via the Moodle assignment link on the KOI Moodle ACC701
home page by 8.00 pm AEST time on Wednesday of Week 9.
Topic: Reporting, Measurement and Disclosure of Revenue
Task Details:
The lecturer will nominate an ASX listed firm for each student. Each student is required to analyse its
financial statement of the financial year ending in 2023. The analysis must focus on discussing the
firm’s reporting and disclosure practices of revenue. In the discussion, detail the accounting policy
that the firm follows in reporting, measuring, and disclosing its revenue, and provide an analysis of
accounting policies. The discussion must evaluate the current accounting treatment for the
recognition and measurement of revenue under AASB15.
Research requirements: Students need to support their analysis with reference to relevant material
from the textbook and minimum of eight (8) suitable, reliable, current, and academically acceptable
sources – this should include at least 2 peer-reviewed academic journal articles.
Presentation: 2000 words (+/- 10%) short report format. Title page, executive summary, table of
contents, appropriate headings and sub-headings, recommendations/findings/conclusions, in-text
referencing, and reference list (Harvard – Anglia style), attachments if relevant (as screenshots).
Single spaced, font Times New Roman 12pt, Calibri 11pt or Arial 10pt.
Marking Guide:
Interpretation and representation
Research
Analysis
Assumptions
Communication
20%
20%
20%
20%
20%
Total mark will be scaled to a mark out of 30 subject marks.
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Criteria
Fail
(0 – 49%)
Pass
(50 – 64%)
Interpretation and
Representation
20%
Does not provide
explanations of
information
presented in
mathematical form.
Does not make
appropriate
inferences based on
that information.
Does not convert
relevant information
into an insightful
mathematical
portrayal.
Provides somewhat
accurate explanations of
information presented in
mathematical forms, but
occasionally makes
minor errors related to
computations or units.
Makes some inferences
based on that
information.
Completes conversion of
information but resulting
mathematical portrayal is
only partially appropriate
or accurate.
Research
20%
Failed to
demonstrate
adequate research.
Selected sources
are either irrelevant
or fewer than
required.
Able to locate academic
sourced and integrate
them into the analysis,
although some sources
may be irrelevant
Analysis
20%
Does not use
correct and
complete
quantitative
analysis.
Does not make
relevant and correct
conclusions.
Uses basic analysis but
uses the quantitative
analysis as the basis for
tentative, basic
judgments, is hesitant or
uncertain about drawing
conclusions from this
work.
Assumptions
20%
Does not attempt to
describe
assumptions or
makes incorrect
assumptions.
Limited, incorrect or
no rationale.
Attempts to describe
assumptions and
provides limited rationale
to explain why each
assumption is
appropriate. Some errors
in assumptions or
assumptions overlooked
Communication
20%
Total mark out of
100%
Credit
(65 – 74%)
Distinction
(75 – 84%)
High Distinction
(85 – 100%)
Provides mostly
Provides accurate
Provides accurate
accurate
explanations of
explanations of
explanations of
information presented
information presented
information
in mathematical form.
in mathematical form.
presented in
Makes appropriate
Makes skilful
mathematical form. inferences based on
inferences based on
Makes mostly
that information.
that information.
appropriate
Competently converts
Skilfully converts
inferences based
relevant information
relevant information
on that information. into an insightful
into an insightful
Converts relevant
mathematical portrayal mathematical portrayal
information into an in a way that
in a way that
insightful
contributes to a further contributes to a further
mathematical
and deeper
or deeper
portrayal in a way
understanding.
understanding.
that contains
minimal
inaccuracies
Able to locate
Able to locate academic Able to locate academic
academic sources sources and integrate
sources and integrate
and integrate them them well into the
them well into the
into the analysis. analysis.
analysis.
Nearly all of the
sources are
Demonstrated strong
Demonstrated
relevant.
research skills and all of exceptional research
the sources are relevant. skills and all of the
sources are relevant.
Uses mostly correct Uses correct and
Uses correct and
and complete
complete quantitative
complete quantitative
quantitative
analysis.
analysis.
analysis.
Makes mostly relevant Makes sophisticated,
Makes mostly
and correct
relevant and correct
relevant and
conclusions.
conclusions.
correct
conclusions.
Describes
assumptions and
provides rationale
to explain each
assumption.
Some elements
incomplete or semiaccurate
assumptions.
Communicates
Has some satisfactory
Makes significant
ineffectively.
elements but may fail to
progress towards
Words do not reflect complete or may omit
completion of the
the problem.
significant parts of the
problem, but the
May include
problem.
explanation or
diagrams which
Explanation or description description may be
completely
may be missing or difficult somewhat
misrepresent the
to follow in places.
ambiguous or
problem situation.
Includes most but not all unclear.
May not include
important diagram(s) or
May include flawed
important supporting diagram(s) may be
or unclear
diagrams.
unclear and difficult to
diagram(s), or
interpret.
insufficient
diagrams.
Explicitly describes
assumptions and
provides strong
rationale to explain
assumptions.
Minimal errors in logic.
Explicitly describes
assumptions and
provides
comprehensive,
compelling and justified
rationale to explain
assumptions.
No errors in logic.
Gives a fairly complete
response with
reasonably clear
explanations or
descriptions. Includes
nearly all complete,
appropriate diagram(s).
Generally,
communicates
effectively to the
identified audience.
Presents supporting
arguments which are
logically sound but may
contain some minor
gaps.
Gives a complete
response with a clear,
unambiguous
explanation and/or
description.
Includes all appropriate
and complete
diagram(s).
Communicates
effectively to the
identified audience.
Presents strong
supporting arguments
which are logically
sound and complete.
Comments:
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Marking Rubric Assessment 3: 30%
Assessment 4
Assessment Type: Final Exam – individual assessment. Students should bring a non-programmable
calculator to the exam. No other electronic or other aids will be permitted.
Duration: On-campus: 2 hours + 10 mins reading time.
Purpose: The purpose of the final examination is to test your understanding of the subject’s concepts
and your ability to apply these concepts. The examination may cover materials used in tutorials, class
discussions and/or from the readings. This assessment contributes specifically to learning outcomes
a, b, c and d.
Value: 50%
Due Date: The final exam will be held in the official KOI exam period.
The specific date and time will be posted towards the end of the trimester.
Topic: The examination may cover content from any part of the entire subject.
Task Details: The final exam will require students to explain and apply the subject content to practical
situations as would be found in a modern accountancy practice, identifying issues, drawing
conclusions, and making recommendations.
3.2 General information about assessment
a) Late Penalties and Extensions
An important part of business life and key to achieving KOI’s graduate outcome of Professional Skills
is the ability to manage workloads and meet deadlines. Completing assessment tasks on time is a
good way to master these habits.
Students who miss mid-trimester tests and final exams without a valid and accepted reason may not
be granted a deferred exam and will be awarded 0 marks for the assessment item. Assessment items
which are missed or submitted after the due date/time will attract a penalty unless there is a
compelling reason (see below). These penalties are designed to encourage students to develop good
time management practices, and to create equity for all students.
Any penalties applied will only be up to the maximum marks available for the specific piece of
assessment attracting the penalty.
Late penalties, granting of extensions and deferred exams are based on the following:
In Class Tests and Quizzes (excluding Mid-Trimester Tests)
o Generally, extensions are not permitted. A make-up test may only be permitted under very special
circumstances where acceptable supporting evidence of illness, hardship or unavoidable
problems preventing completion of the assessment is provided (see section (b) below). The
procedures and timing to apply for a make-up test (only if available) are as shown in the section
Applying for an Extension (see below).
o Missing a class test will result in 0 marks for that assessment item unless the above applies.
Written Assessments and Video Assessments
o There is a late penalty of 5% of the total available marks per calendar day unless an extension is
approved (see Applying for an Extension section below).
Presentations
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o Generally, extensions are not permitted. Missing a presentation will result in 0 marks for that
assessment item. The rules for make-up presentations are the same as for missing in-class tests
(described above).
For group presentations, if serious circumstances prevent some members of the group from
participating, the members of the group who are present should make their contributions as
agreed. If a make-up presentation is approved, the other members of the group will be able to
make their individual presentation later and will be marked according to the marking rubric. A
video presentation may be used to facilitate the process.
Mid-Trimester Tests and Final Exams
If students are unable to attend mid-trimester tests or final exams due to illness, hardship or some
other unavoidable problem (acceptable to KOI), they must:
o Complete the Assignment Extension / Exam Deferment Form available by contacting
academic@koi.edu.au as soon as possible, but no later than three (3) working days after the
exam date.
o Provide acceptable documentary evidence (see section (b) below).
o Agree to attend the deferred exam as set by KOI if a deferred exam is approved.
Deferred exam
o There will only be one deferred exam offered.
o Marks obtained for the deferred exam will be the marks awarded for that assessment item.
o If you miss the deferred exam you will be awarded 0 marks for the assessment item. This may
mean you are unable to pass the subject.
b) Applying for an Extension
If students are unable to submit or attend an assessment when due, they must
o Complete the Assignment Extension / Exam Deferment Form available by contacting
academic@koi.edu.au as soon as possible, but no later than three (3) working days of the
assessment due date.
o Provide acceptable documentary evidence in the form of a medical certificate, police report or
some other appropriate evidence of illness or hardship, or a technician’s report on problems with
computer or communications technology, or a signed and witnessed statutory declaration
explaining the circumstances.
o Students and lecturers / tutors will be advised of the outcome of the extension request as soon as
practicable.
Please remember there is no guarantee of an extension being granted, and poor organisation is not a
satisfactory reason to be granted an extension.
c) Referencing and Plagiarism
Please remember that all sources used in assessment tasks must be suitably referenced.
Failure to acknowledge sources is plagiarism, and as such is a very serious academic issue. Students
plagiarising run the risk of severe penalties ranging from a reduction in marks through to 0 marks for a
first offence for a single assessment task, to exclusion from KOI in the most serious repeat cases.
Exclusion has serious visa implications. The easiest way to avoid plagiarising is to reference all
sources.
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Harvard referencing is the required method – in-text referencing using Author’s Surname (family
name) and year of publication. A Referencing Guide, “Harvard Referencing”, and a Referencing
Tutorial can be found on the right-hand menu strip in Moodle on all subject pages.
An effective way to reference correctly is to use Microsoft Word’s referencing function (please note
that other versions and programs are likely to be different). To use the referencing function, click on
the References Tab in the menu ribbon – students should choose Harvard.
Authorship is also an issue under plagiarism – KOI expects students to submit their own original work
in both assessment and exams, or the original work of their group in the case of a group project. All
students agree to a statement of authorship when submitting assessments online via Moodle, stating
that the work submitted is their own original work.
The following are examples of academic misconduct and can attract severe penalties:
o Handing in work created by someone else (without acknowledgement), whether copied from
another student, written by someone else, or from any published or electronic source, is fraud,
and falls under the general Plagiarism guidelines.
o Copying / cheating in tests and exams is academic misconduct. Such incidents will be treated
just as seriously as other forms of plagiarism.
o Students who willingly allow another student to copy their work in any assessment may be
considered to assist in copying/cheating, and similar penalties may be applied.
Where a subject coordinator considers that a student might have engaged in academic misconduct,
KOI may require the student to undertake an additional oral exam as a part of the assessment for the
subject, as a way of testing the student’s understanding of their work.
Further information can be found on the KOI website.
d) Reasonable Adjustment
The Commonwealth Disability Discrimination Act (1992) makes it unlawful to treat people with a
disability less fairly than people without a disability. In the context of this subject, the principle of
Reasonable Adjustment is applied to ensure that participants with a disability have equitable access
to all aspects of the learning for the subject. For assessment, this means that barriers to their
demonstrating competence are removed wherever it is reasonably practical to do so.
Examples of reasonable adjustment in assessment may include:
o provision of an oral assessment, rather than a written assessment
o provision of extra time
o use of adaptive technology.
The focus of the adjusted assessment should be on enabling the student to demonstrate achievement
of the learning outcomes for the subject, rather than on the method of assessment.
e) Appeals Process
Full details of the KOI Assessment and Assessment Appeals Policy may be obtained in hard copy
from the Library, and on the KOI website www.koi.edu.au under Policies and Forms.
Assessments and Mid-Trimester Exams:
Where students are not satisfied with the results of an assessment, including mid-trimester exams,
they have the right to appeal. The process is as follows:
o Discuss the assessment with their tutor or lecturer – students should identify where they feel more
marks should have been awarded – students should provide valid reasons based on the marking
guide provided for the assessment. Reasons such as “I worked really hard” are not considered
valid.
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o If still not satisfied, students should complete an Application for Review of Assessment Marks
form, clearly explaining the reasons for seeking a review. This form is available from the KOI
website under Policies and Forms and is also available at KOI Reception (Kent St, Market St and
O’Connell St). The completed Application for Review of Assessment Marks form should be
submitted as explained on the form with supporting evidence attached to academic@koi.edu.au .
o The form must be submitted within ten (10) working days of the return of the marked assessment,
or within five (5) working days after the return of the assessment if the assessment is returned
after the end of the trimester.
Review of Grade – whole of subject and final exams:
Where students are not satisfied with the results of the whole subject or with their final exam results,
they have the right to request a Review of Grade – see the Assessment and Assessment Appeals
Policy for more information.
An Application for Review of Grade/Assessment Form (available from the KOI Website under Policies
and Forms and from KOI Reception at Kent St, Market St and O’Connell St) should be completed
clearly explaining the grounds for the application. The completed application should be submitted as
explained on the form, with supporting evidence attached to academic@koi.edu.au .
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Executive Summary
The emphasis of this study is on Wesfarmers Limited (Wesfarmers or ‘the company’) revenue reporting and
disclosure practices as well as the accounting principles that the company use for revenue recognition and
measurement in accordance with AASB15. Given that Wesfarmers Limited is an Australian-based
multinational company and one of Australia’s biggest and most diverse conglomerates which engages in
several commercial endeavors, including retail, coal mining operation, chemicals, fertilizers, and industrial
and safety goods, revenue recognition measurement is particularly pertinent to this company. Due to its
complex and different revenue streams, reliable accounting treatment is essential to ensure that the
financial accounts accurately reflect the success of the company’s multiple businesses. Wesfarmers’ key
business operations include some of Australia’s biggest and most recognizable retail brands: Officeworks
(office supplies), Kmart and Target (budget department shops), and Bunnings Warehouse (hardware and
home renovation). This report provides financial study of Wesfarmers’ revenue, cost of sales, additional
sources of income, and variables influencing their growth in sales. More importantly, the report examines
aspects how trading results increased during the year despite the substantial COVID19-related operating
limitations and disruptions. Furthermore, this study examines the AASB 15 revenue accounting
requirements, including how and when they were implemented and when Wesfarmers recognized them.
Finally, we look at Wesfarmers’ financial evaluation and revenue recognition practices, as well as how the
company benefits from sales growth in response to the COVID-19 pandemic.
1
Contents
1.1 Introduction…………………………………………………………………………………………………… 3
1.2 Company Profile ……………………………………………………………………………………………. 3
1.3 Literature Review ………………………………………………………………………………………….. 3
1.4 Financial Growth …………………………………………………………………………………………… 4
1.4.1 Sales Growth of Wesfarmers Ltd (Group) ……………………………………………………………4
1.4.2 Sales Growth of Wesfarmers Ltd (Segment) ………………………………………………………..4
1.4.3 Revenue Growth of Wesfarmers Ltd ……………………………………………………………………6
1.5 Accounting Standard for Revenue under AASB15 ………………………………………… 7
1.5.1 Accounting Requirements for Revenue Under AASB 15 ……………………………………..7
1.5.2 AASB15 Adopted by Wesfarmers Ltd ………………………………………………………………….7
1.6 Recognition and Measurement of Revenue under AASB15 …………………………… 8
…………………………………………………………………………………………………………………………… 8
1.6.1 Recognition and Timing………………………………………………………………………………………9
1.6.2 Measurement ……………………………………………………………………………………………………. 10
1.6.3 Revenue Recognition Criteria …………………………………………………………………………… 10
1.6.4 Multiple-Element Arrangements/Contract Modifications …………………………………… 11
1.7 Evaluation of the Financial Report ………………………………………………………………. 11
1.8 Conclusion ………………………………………………………………………………………………….. 11
1.9 Reference List……………………………………………………………………………………………… 12
1.10 Appendices ……………………………………………………………………………………………….. 13
2
Keywords
Revenue recognition, Australian Accounting Standards Board (AASB), AASB15, International Accounting
Standards Board (IASB), Financial Accounting Standards Board (FASB), Australian Securities and
Investments Commission (ASIC), Australian Securities Exchange (ASX), Environmental, Social, and
Governance (ESG), Key Performance Indicators (KPIs)
1.1 Introduction
Wesfarmers is obligated to abide by the rules and accounting standards of the AASB and ASIC as a publicly
traded business on the ASX. Wesfarmers’ revenue recognition practices are influenced by the peculiarities
of its business sectors. For instance, the industrial category, which includes companies like chemicals,
energy, and fertilizers, recognizes revenue based on contractual terms whereas the retail segment, which
includes companies like Bunnings, Kmart, and Officeworks, recognizes revenue at the point of sale.
Wesfarmers’ most recent acquisition of online retailer Catch Group necessitates a different method of
revenue recognition than the firm’s traditional retail companies. The sustainability section of Wesfarmers’
annual financial report details the company’s performance and initiatives in the areas of environmental,
social, and governance (ESG). In addition, Wesfarmers offers data on its key performance indicators (KPIs),
which include dividend policy, return on investment, profit margin, and sales growth. Furthermore, it owns
noncontrolling interest in firms engaged in the sale of real estate, investment banking, and private equity,
as well as firms producing forest products. Additionally, Wesfarmers regularly communicates with investors,
analysts, and other stakeholders through meetings, conferences, and presentations. In accordance with
the pertinent accounting rules and laws, Wesfarmers’ reporting and disclosure practices for revenue
generally strive to give its stakeholders timely, accurate, and pertinent information.
1.2 Company Profile
To cater the needs of Western Australian farmers, the business was established in 1914 as a co-operative.
With a market value of over AUD 70 billion, it has now grown to become one of Australia’s largest
enterprises. Australia, New Zealand, and the UK are where Wesfarmers largely conducts business. Perth,
Australia serves as the company’s headquarters. (MarketLine, 2021). One of Australia’s major employers,
Wesfarmers has about 515,000 shareholders. (Wesfarmers Limited, 2022). Customers in Australia are
serviced by Wesfarmers. (Bloomberg, 2022). Officeworks, Bunnings, Kmart Group, Wesfarmers
Chemicals, Energy and Fertilizers (WesCEF), Industrial and Safety, Health, Catch, and Other are among
its segments. (Reuters, 2021).
1.3 Literature Review
Determining the timing of revenue recognition and presentation, whether in gross or net amounts, is the
key accounting challenge. (KPMG, 2014). Determining the point at which risks and benefits are shifted to
the client is crucial. Revenue from Contracts with Customers, a set of convergent rules for revenue
recognition, is constructed jointly by IASB and FASB. (Wiley, 2020) This standard now uses the assetliability model and is applicable to business transactions. Based on changes in assets and liabilities brought
on by client agreements, this approach underpins revenue recognition and measurement. (Kieso, 2014)
The level of accuracy of the recognized revenue data in the financial accounts are crucial because
managers tend to have an impact on stakeholders’ perceptions of the organization. (Bowen et al., 2002)
3
1.4 Financial Growth
1.4.1 Sales Growth of Wesfarmers Ltd (Group)
Wesfarmers
reported
revenue
of
AUD36,838 million for the fiscal year
ended on 30 June 2022, an 8.5% increase
over FY2021. In FY2022, the company’s
operational profit was AUD3,633 million,
up from AUD3,717 million in FY2021. The
company’s statutory net profit for the full
year ended 30 June 2022 was AUD2,352
million, down from AUD2,380 million in
FY2021 due to disturbances brought on by
COVID that had a substantial negative
impact, including nearly half of the Group’s
retail stores either had trading limitations
or closure and higher operating costs.
However, trading circumstances improved
as constraints eased, and Wesfarmers
reported high NPAT growth of 13.1% in
the prior period, excluding major items.
(Wesfarmers Ltd Annual Report, 2022)
Table 1: Sales Growth (Group Performance)
Source: Wesfarmers Ltd Annual Report, 2022
1.4.2 Sales Growth of Wesfarmers Ltd (Segment)
Wesfarmers classifies its business activities into six reportable segments: Bunnings, Kmart Group,
OfficeWorks, Chemicals, Energy and Fertilizers (WesCEF), Industrial and Safety (WIS), and
Others. Wesfarmers met its goal of generating superior and sustainable long-term returns by
delivering strong financial performance for the 2022 fiscal year while continuing to invest in both its
current activities and new ventures. During the first half of the year, when approximately 10% of
store trade days—or 34,000 days—were disrupted by closures or restrictions, Wesfarmers’ retail
businesses felt the brunt of the lockdowns. Wesfarmers’ reportable segmental performance are
shown in the figures below:
4
5
Table 2: Sales Growth (Segment/Divisional Performance)
Source: Wesfarmers Ltd Annual Report, 2022
Retail industry management had been putting plans in place for the inevitable growth of online commerce
for some time, and they were able to accelerate the process to meet the growing demand from customers
for online services, like “click and collect” and delivery during off-peak hours. For instance, Wesfarmers
offer greater convenience and flexibility to customers’ shopping options while reaching out to them in new
ways: Bunnings’ brand-new, fully functional e-commerce platform, improvements to the PowerPass app
and strong uptake of Flybuys, Kmart’s new partnership with OnePass and Officeworks advancing with its
development of a customer fulfilment centre (CFC) in Western Australia and an international distribution
centre in Victoria. (Wesfarmers Ltd Annual Report, 2022)
1.4.3 Revenue Growth of Wesfarmers Ltd
Wesfarmers revenue was increased by 8.5% from the FY ended 30 June 2021. Cost of revenue increased
to 2.59% which yielded to $2.35 billion Australian dollars for the financial year 2022.
Percentage Change in Total Revenue (TR)
= [(TR for the current period – TR for the previous period) / TR for the previous period] x 100
= [($36.84B – $33.94B) / $33.94B] x 100
= 8.5%
Net Income (FY2022) = Total Revenue – (Total Operating Expenses + Income Tax Expense)
= $36.84B – ($33.52 + $968M)
= $2.35B
30 Jun 2022
36.84B
13.13B
3.31B
3.32B
2.35B
30 Jun 2021
33.94B
12.82B
3.58B
3.37B
2.38B
30 Jun 2022
30 Jun 2021
Total Revenue
36.84B
33.94B
Cost of Revenue
23.71B
21.12B
Gross Profit
13.13B
12.82B
–
–
6.95B
6.5B
–
–
Other Operating Expenses
1.28B
1.21B
Total Operating Expenses
33.52B
30.36B
Operating Income
3.31B
3.58B
Total Other Income Expense Net
6M
-208M
Total Revenue
Gross Profit
Operating Income
Income Before Tax
Net Income
Research Development
Selling General Administrative
Non-Recurring
6
EBIT
3.31B
3.58B
Interest Expense
-294M
-324M
Income Before Tax
3.32B
3.37B
Income Tax Expense
968M
993M
–
–
2.35B
2.38B
Discontinued Operations
–
–
Extraordinary Items
–
–
Effect Of Accounting Charges
–
–
Other Items
–
–
Net Income
2.35B
2.38B
Net Income Applicable to Common
Shares
2.35B
2.38B
Minority Interest
Net Income from Continuing Ops
Tables 3 & 4: Comparative Analysis of Net Income (30 June 2021 & 2022)
Source: Stock Metric Wesfarmers Ltd Annual Report, 2022
1.5 Accounting Standard for Revenue under AASB15
1.5.1 Accounting Requirements for Revenue Under AASB 15
When the customer benefits from Wesfarmers’ performance as it operates, the company’s revenue is
gradually recognized, and the latter’s performance results in the creation or improvement of a customercontrolled asset. Wesfarmers upholds the standard that it has an enforceable entitlement to remuneration
for already-completed performance. (AICPA, 2019)
1.5.2 AASB15 Adopted by Wesfarmers Ltd
Wesfarmers Ltd. adopted AASB 15 for the first time in its fiscal year commencing on July 1, 2018. This
complies with the AASB’s mandate for the adoption of AASB 15 for annual reporting periods beginning on
or after January 1, 2018, which was set at that time. (Wiley, 2020)
The increasingly complicated standards for revenue recognition and recording have been impacted by
changing business strategies and international competition. Unlike the AASB, whose mandate includes
creating standards for both for-profit and not-for-profit sectors, the IASB exclusively applies to private sector
organizations. (Stevenson, KM 2012)
Wesfarmers Ltd is consistent with Paragraphs 9–16 five-step paradigm for recognizing revenue from
contracts with customers as shown below:
7
Source: accru.com
1.6 Recognition and Measurement of Revenue under AASB15
The primary sources of income for the Wesfarmers Ltd Group include the selling of goods and products,
commissions, the rendering of services, interest, dividend, rental, royalty, and other income. (Wesfarmers
Ltd, Annual Report 2022) Companies that have more control over revenue recognition are more likely to
use real earnings management. (Hope, Ma, & Thomas, 2020)
Total
Revenue
36.84B
EBIT
3.31B
Net
Income
2.35B
Table 5: Revenue and Other Income
Source: Wesfarmers Ltd Annual Report, 2022
Gross
Profit
13.13B
Net
Tangible
Assets
3.33B
Capital
Expenditures
-970M
*Key Statistics
Amounts in AUD
8
Total Revenue($m)
= Revenue from contracts with customers (Sale of retail goods in store, Sales of
retail goods online + Sale of wholesale goods + Sale of fertilizers, chemicals,
specialty gases, LPG and LNG + Sale of industrial products + Services revenue)
+ Other revenue (Interest revenue + Dividend revenue)
= ($27,068 + 3,440 + 1,057 + 3,031 + 1,878 + 205) + ($5 + 54 + 100)
= $36,679 + $159
=$36, 838 million
1.6.1 Recognition and Timing
According to a 2020 study by Islam, Hossain, and Sultana, adopting AASB 15 reduces the frequency of
revenue restatements, improves the timeliness of revenue recognition, and raises the quality of revenue
disclosures.
Revenue from contracts with customers
The following sources account for a sizeable amount of the Group’s revenue:
•
The company’s retail operations, which include selling retail products to customers directly online
or in-person. Typically, ownership of the goods is transferred at the point of sale (Bunnings, Kmart
Group, and Officeworks).
Paragraph B88 Disclosure of disaggregated revenue. Each segment serves as an illustration of a
strategic business unit that engages in multiple industries and markets while offering a range of products.
Prior to making decisions about resource allocation and performance evaluation, the key operating
decision-makers, the Board and senior management team, keep an eye on how each business unit is
performing. (Wesfarmers Ltd News Release, 2021)
Transfers between business segments are included in the revenue, expenses, and outcomes for each
segment. Wesfarmers Ltd account contracts with customers within the scope of AASB15 which sets out
the five criteria under Paragraph 9 and the entity must met this before revenue can be recognized. Revenue
must be recorded in accordance with AASB 15 whenever an organization fulfills a performance obligation.
The determination of whether the obligations have been satisfied will not be made until the
separate performance obligations have been completed (at which time the revenue is recognized), and the
transfer of control have taken place, is the recognition of revenue identified. Here is a list of the categories
of products and services that each reportable segment derives its revenue from:
Bunnings
Marketed and sold directly to consumers through the Group’s in-store retail operations. Usually, the point
of sale is when control of the items is transferred.
• A retailer of home and garden products as well as building supplies; and
• Servicing clients in the residential and commercial sectors, including builders, craftsmen, and
companies.
Kmart Group
Directly sold to customers through internet channels. Usually, the consumer collects the products or when
they are delivered, which is when control of them passes.
• Kmart and Target: retailers of clothing and general goods, such as toys, household goods,
recreational items, and consumables.
• Catch: Online merchant supplying third-party online marketplaces as well as first-party branded
products. Catch generates revenues through the sale of products, known as in-stock revenue, and
marketplace commissions. Wesfarmers recognize revenue once the buyer has possession of the
product or service being purchased, the performance obligation is met and the transaction price
that corresponds to that price is the anticipated commission. (Paragraph 60 AASB15). On
Wesfarmers’ $54 billion market capitalization, Catch is merely a rounding error. (Andrew, J., 2022)
9
Officeworks
• Retailer and supplier of office products to individuals, small and medium-sized organizations, and
the educational sector.
Contract sales of goods to commercial customers:
i. entirely focused on industrial maintenance and industrial safety, and for which the Group owns distribution
rights (Industrial and Safety); and
ii. fertilizers, chemicals, specialty gases, LPG, and LNG are just a few of the items the Group either
produces or purchases (Chemicals, Energy and Fertilisers (WesCEF)).
Services revenue: includes earnings from customer services such as marketing and brand support,
franchise services, and clinical treatments. As soon as the performance obligations are met, revenue is
acknowledged.
1.6.2 Measurement
Pursuant to paragraph 61, when an entity has a refund liability, it should identify that liability and modify the
transaction price to account for the anticipated amount of refunds. The right to recover the products should
be recorded as an asset if the organization anticipates receiving returned goods from customers. The Group
often includes a single performance obligation in its contracts with clients for the retail sale of items. At the
point of sale, payments are normally made in cash only. The lay-by transaction’s income is recognized once
a customer completes their payment and receives their order. Any funds received prior to the completion
of the performance obligation are recorded as a contract debt on the balance sheet.
Other revenue
Interest revenue
When a performance obligation is satisfied over time, income is recognized in accordance with the amount
of progress made towards full fulfilment of the performance obligation. The Group records revenue less
anticipated returns since a right to a return is not considered a distinct performance obligation. A refund
obligation and accompanying inventory asset also indicate the customer’s right to receive the returned
goods.
Dividend revenue
Dividend income, apart from dividends from associates, is recorded as soon as the Group’s right to the
payment is established.
1.6.3 Revenue Recognition Criteria
Key estimate: gift cards
Revenue from the sale of gift cards is recognized when a customer uses a gift card to make a transaction
or when the gift card is damaged and can no longer be expected to be used. In respect to gift cards, $155
million in revenue is deferred as of June 30, 2022 ($128 million in 2021). Gift card obligations are contract
liabilities since money has been given in exchange for a service that must be rendered later. Wesfarmers
recognizes a contract liability when the client has paid consideration, but the entity has not yet delivered
the promised products or services, according to paragraph 34 of AASB 15. As a result, the principles
established in AASB 15 are consistent with the recognition of contract obligation for gift cards. The projected
breakage, which is evaluated yearly based on previous data, serves as the primary premise in calculating
the contract responsibility for gift cards and vouchers. The revenue recognized from the expiration of gift
cards and vouchers is affected by any reevaluation of projected breakage in a certain year (either increasing
or decreasing). Any modification in the estimate that is foreseeable will probably not have a significant
effect. AASB 15 paragraph 94 states that when an estimate changes, an entity must account for it as an
10
adjustment to revenue rather than a change to the transaction price. If the effect of the change is not
anticipated to be significant, it must also be accounted for as an adjustment to the amount of variable
consideration that is likely to be received. (AICPA, 2019)
1.6.4 Multiple-Element Arrangements/Contract Modifications
Based on the accounting standard AASB 15 Revenue from Contracts with Customers,
Wesfarmers revenue is calculated based on the individual selling prices of each contract element and is
realized when the customer gains control over the goods or services. (Wiley, 2020)
Key judgements: loyalty programs
The Group takes part in the Flybuys loyalty program, which rewards qualified consumers with points for
their purchases. The Group is acting as an agent in this arrangement since Flybuys is obligated to offer the
rewards to the client under the terms of the loyalty program, and the Group’s sole duty is to choose whether
Flybuys will deliver the goods or services. Priceline Sister Club, a loyalty points program run by the Group,
awards loyalty points to qualifying consumers based on their spending. After obtaining a minimum number
of points, the points can be exchanged for merchandise. On transactions when points are issued,
consideration is allocated between the items sold and the points issued. The distribution of the transaction
price between goods or services and loyalty points is outlined in AASB 15 paragraphs B98–B100. According
to these paragraphs, unless the standalone selling price of the points is not observable, in which case the
entity should estimate it using a suitable method, an entity should allocate the transaction price between
the goods or services and the points based on their relative standalone selling prices. (AICPA, 2019). The
paragraphs also offer illustrations of effective techniques for calculating the points’ solo selling price.
1.7 Evaluation of the Financial Report
Evaluation of the financial report for the year ended June 2022, Wesfarmers continued revenue growth
raised by 8.5% to $36.84B. Due to the productivity and the abrupt temporary switch to online channels
brought by COVID-19, there had been an impact on output and earnings (dropped to 3.77% amounting to
$3,416M during the time period. In 2022, the Group earned a net profit after tax (NPAT) of $2,352 million.
NPAT fell by 2.9% excluding significant prior period items. Reported operating cash flows declined 32% to
$2,301 million. The return on equity significantly increased by 3.3%. (Wesfarmers Limited, Annual Report
2022)
1.8 Conclusion
Wesfarmers produced solid financial results for the financial year 2022. We can conclude from this
report that the Group kept investing in growth platforms throughout the year, despite the highly disrupted
operational environment brought on by COVID19. Moreover, in compliance with AASB15 standards,
Wesfarmers promotes a 5-stage model and reports revenue based on the timing of revenue recognition.
Furthermore, from this evaluation, the Group will build strong profits as they continue to build platforms to
sustain long-term shareholder returns while also starting new businesses and continuing to invest in its
current activities.
11
1.9 Reference List
AICPA, 2019: Audit and Accounting Guide: Revenue Recognition. Durham, NC: AICPA. Available at:
https://onlinelibrary.wiley.com/doi/book/10.1002/9781119608295 (Accessed: April 21, 2023).
Andrew, J., 2022: How catch went from an e-commerce success to a loss on Wesfarmers’ financial report,
SmartCompany.
Available
at:
https://www.smartcompany.com.au/finance/catchoftheday-catchwesfarmersfinance/#:~:text=Catch%20earns%20its%20revenue%20from%20two%20channels%3A%20Sale,termed
%20as%20in-stock%20revenue%3B%20and%20Marketplace%20commission%20income.
(Accessed:
April 25, 2023).
Bloomberg, 2021: Wesfarmers Ltd – company profile and news. [online] Bloomberg.com. Available at:
[Accessed 21 Apr.
2023].
Bowen, R. M., Davis, A. K., & Rajgopal, S., 2002: Determinants of revenue‐reporting practices for internet
firms. Contemporary Accounting Research, 19(4), 523-562.
Compiled AASB Standard Revenue from Contracts with Customers, 2019. Available at:
https://www.aasb.gov.au/admin/file/content105/c9/AASB15_12-14_COMPsep18_01-19.pdf
(Accessed:
April 21, 2023).
e-Commerce:
KPMG
Accounting
and
Auditing
https://assets.kpmg.com/content/dam/kpmg/pdf/2016/05/AAU-February-2014.pdf
Update;
2014:
Hope, O. K., Ma, M., & Thomas, W. B., 2020. Contracting, revenue recognition and real earnings
management. Journal of Contemporary Accounting & Economics, 16(3), 100197
Islam, M. A., Hossain, M. A., & Sultana, N. (2020). The impact of AASB 15 adoption on revenue recognition
quality: Evidence from Australia. Journal of Accounting, Auditing & Finance, 35(4), 574-597
Kieso ED, Weygandt JJ, Warfield DT. 2014, Accounting Intermediate. Second edition
Loftus, J 2022, Financial Reporting, Wiley, Melbourne. Available from: ProQuest Ebook Central. [25 April
2023].
MarketLine Company Profile: Wesfarmers Limited 2021, Wesfarmers Limited MarketLine Company Profile,
14
September,
pp.
1–30,
viewed
21
April
2023,
.
News release – wesfarmers.com.au, 2021 Available at: https://www.wesfarmers.com.au/docs/defaultsource/asx-announcements/2021-full-year-results.pdf?sfvrsn=b51412bb_0 (Accessed: 29 April , 2023).
Stevenson, KM 2012, ‘The Changing IASB and AASB Relationship’, Australian Accounting Review, vol. 22,
no.
3,
pp.
239–243,
viewed
30
April
2023,
2022 full-year results – sitefinity.wesfarmers.com.au (no date) Wesfarmers 2022 Annual Report. Available
at:
https://sitefinity.wesfarmers.com.au/docs/default-source/2022-full-year-results/wes22-026-2022-fullyear-results.pdf?sfvrsn=3ecf1abb_4 (Accessed: April 21, 2023).
Vengadasalam, V. 2021: AASB 15 summary and five-step model explained, Accru. Available at:
https://www.accru.com/blog/aasb-15-summary-and-five-step-model-explained/ (Accessed: April 25, 2023).
12
Wesfarmers Limited (ASX:WES) annual report 2022 analysis – stock metric: Analysis – Stock Metric.
Available at: https://www.stockmetric.net/asx/wes-annual-report-analysis/ (Accessed: April 21, 2023).
Wesfarmers
Limited,
2022:
About
us.
Wesfarmers.
Who
we
are.
Available
[Accessed 21 Apr. 2023]
at:
Wiley, 2020: Interpretation and Application of IFRS® standards. Available at:
https://onlinelibrary.wiley.com/doi/book/10.1002/9781119699415 (Accessed: April 24, 2023).
1.10 Appendices
Appendix A: Income Statement of Wesfarmers Ltd, 2022
Source: Wesfarmers Ltd Annual Report, 2022. Wesfarmers Ltd
13
Appendix B: Statement of Comprehensive Income of Wesfarmers Ltd, 2022
Source: Wesfarmers Ltd Annual Report, 2022. Wesfarmers Ltd
Revenue from continuing operations of
Wesfarmers Limited from financial years 2018 to
2022 (in billion Australian dollars)
40
30
20
26.76
27.92
FY 2018
FY 2019
30.85
33.94
36.84
10
0
FY 2020
FY 2021
FY 2022
14
Appendix C: Balance Sheet of Wesfarmers Ltd, 2022
Source: Wesfarmers Ltd Annual Report, 2022. Wesfarmers Ltd
15
Appendix D: Five-year Financial History
Source: Wesfarmers Ltd Annual Report, 2022. Wesfarmers Ltd
16