accounting issues memo
Background: On 29 May 2012, the (Australian) Water Accounting Standards Board (WASB) passed the Australian Water Accounting Standard 1 (AWAS1 – can be downloaded and reviewed at: http://www.bom.gov.au/water/standards/documents/awas1_v1.0.pdf ). Crystal Creek Falls (see Figure 1) is located between the Queensland (Australia) cities of Ingham and Townsville. Each week, a million hectare-metres of clean cool, clean, crystal clear water flow through it and on into the Pacific Ocean, 10 kilometres later. One of the farmers in the lower reaches of the river (Mr Douglas McKay) has converted his crops from waterintensive peaches to low-water use Acai Palms (see Figure 2). The above farmer has formed a corporation to juice and sell the Acai Palm Fruit – Majestic Acai Juice Australia Inc. (MAJAI). A key asset of MAJAI is the rights to 100,000 hectaremetres of water per week that the farmer transferred from his farm to MAJAI. NB: due to the change in use of the water (i.e. from irrigation to food processing) the water (which was previously taken from below the falls) will have to be taken from well above the falls. The falls is currently only minor tourist attraction but its value as a draw for tourists has been growing. Required: 1) Please download and review the document at http://www.bom.gov.au/water/standards/documents/awas1_v1.0.pdf , 2) Comment on whether or not the transfer of the water rights from the farm to the processing firm is going to be acceptable (explain). 3) Discuss the accounting issues that may be raised by the transfer of the water rights. Memo Assignments and Structure – Periodically, a memo question will be assigned during lecture or tutorial and a written description of that question will be posted to the assignment section of Blackboard. A total of four to five Memos will be assigned during the term. Write a memo with the following sections: Headers (5 marks) with: To: XXXXXX From: YYYYYYYYY Date: 17/11/2014 Re: (Ideally 6 to 12 words) Please Note: the “re:” line is a few descriptors to help with filing. Context Line (15 marks): One to two sentences that should provide a clear and concise statement of the issues and consequences (i.e. why the reader should read the memo). Action Line (25 Marks): One to three sentences that is like a conclusion but should provide An excellent clear concise statement of how to resolve the issues (i.e. what do you, as the crafter/s of the Memo want the reader to do). Rest of the Memo (25 Marks): Supports the action line. Ideally, it should provide excellent insight plus strong, clear, and concise support for the action line and that support must be clearly tied to the action line. Marking of the Memos (70/10 = 7 Marks each) – The marks given for best 3 of 4 assigned memos or the best 4 of five assigned memos will be added to provide the total mark out of 20 (NB: If four memos are assigned then there are a possible 21/20 marks, but a maximum of 20 marks will be given – if 5 memos are assigned then the mark out of 28 will be multiplied by 0.75 (i.e. 21/28) and again a maximum of 20 marks will be given). The marking Rubric: is given on Blackboard in the assignment section and was based on the following criteria: The purpose of the assessment task is to develop and assess students’ logic, communication, and writing skills. Accordingly, marks are not awarded directly for content but are based on the following attributes: 1. Conciseness, 2. Coverage of the material, and 3. Value to the reader in making a decision
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