Assessment Guide
ACC-ACF2100 Group Assignment
Semester 1, 2022

Objective
This group assignment aims to help you review the learning objectives in Topic 5 and Topic
6 and, at the same time, help you enhance teamwork skills, data analyst skills, and critical
thinking.
“Being able to collaborate and bounce ideas, concepts, and analyses off of your highly intelligent
peers is invaluable. There is usually more than one answer in accounting – working with a team to
understand the most appropriate solution is beneficial.”
“Accountants need to perform analytics on large data sets to aid financial decision-making and
visually display results from data analytics or other data sets, which is key for monitoring and
reporting financial results to non-financial users.”
---- Daniel Lever, Senior Audit Manager
Introduction
AASB 136/IAS 36 Impairment of Assets requires firms to perform impairment tests on assets when
there is an indication that assets are not worth as much as they were previously. Regulators,
standard setters, and the accounting profession point to the outbreak of COVID-19 as an indication
of asset impairment. The ASIC stated that the values of assets would be one of its focus areas of
regulation under COVID-19. 1 The AASB stated that COVID-19 directly impacted asset
impairment. 2 In a survey conducted by PricewaterhouseCoopers (PWC), 82% of Chief Financial
Officers believed that COVID-19 had the potential to impact their businesses significantly. 3 Given
the requirement of the accounting standards and the pressure from regulators and standard setters,
we expect firms to impair their assets as they should during COVID-19.

However, accounting theory suggests that firms may be reluctant to impair their assets under
COVID-19 for at least two reasons. First, accounting theory suggests that accounting numbers are
often written into the managers’ compensation contracts to encourage managers to work hard
toward improving firm performance. For example, Woolworths Group links executives’
compensation to earnings before interest and tax. Management at Woolworths Group can earn
higher compensation if they can produce higher earnings before interest and tax. Therefore, the
measurement of income statement accounts would determine managers’ personal benefits. For this
reason, managers are reluctant to impair assets because asset impairment entails the recognition of
impairment loss into the profit/loss statement, resulting in a lower amount of profit and further a

1 https://asic.gov.au/regulatory-resources/financial-reporting-and-audit/covid-19-implications-for-financial-reporting-and-audit-
frequently-asked-questions-faqs/#q1
2 https://www.auasb.gov.au/admin/file/content102/c3/AASB19009_COVID19_FA.pdf
3 https://www.pwc.com.au/assurance/impact-of-impairment-on-financial-reporting-in-the-COVID-19-era.html

lower amount of managerial compensation. Second, accounting theory suggests that asset
impairment sends a negative signal to the market that the firm’s assets are overvalued. Market
participants will downward adjust the valuation of the firm. This makes it more difficult for firms
to acquire resources from the market. Given these implications of the accounting theory, firms
could impair assets less than they should under COVID -19.

In this group assignment, you and your groupmate will write a research report to investigate firms’
asset impairment surrounding the outbreak of COVID-19. The research sample includes five (5)
public firms listed on the Australian stock exchange: (1) Woolworths Group Limited, (2)
Wesfarmers limited, (3) Aurizon Holdings Limited, (4) Computershare Limited, and (5) Elders
Limited. The research period covers four years ranging from the fiscal year ending 30 June 2018
to the fiscal year ending 30 June 2021 (i.e., two years before COVID-19 and two years after
COVID-19). The research focus is the asset impairment on property, plant, and equipment. The
research methodology involves data analysis and the interpretation of findings.

Requirement
The research report consists of several parts: the title, Part A to Part F, and the Appendix.
Part Requirement Word
limit
Skills
required
Title Impairment of Property, Plant, and Equipment around COVID-19
Part A State your understanding of the two valuation models of PPE: the
cost model and the revaluation model. Review the 2021 annual
report of the five (5) firms and discuss which model these firms use
in measuring PPE.
150 Information
acquisition
skill
Part B State how to perform impairment tests for individual assets and
cash-generating units. Review the 2021 annual report of the five
(5) firms and summarize how these firms perform the impairment
test on PPE.
150 Information
acquisition
skill
Part C Collect data on the beginning-year carrying amount of PPE and the
impairment of PPE from notes to financial statements for each of
the five (5) firms from 2018 to 2021.
Data
collection
skill
Part D Average the five (5) firms’ impairment and impairment ratio (i.e.,
impairment of PPE divided by the beginning-year carrying amount
of PPE) for each year from 2018 to 2021 and plot bar graphs to
present the impairment and impairment rate around the COVID-19.
Data
visualisation
skill
Part E Perform a correlation analysis to investigate whether the PPE
impairment among the five (5) firms is correlated with the severity
of COVID-19 measured as the total number of new cases reported
in the firm’s head office state by 30 June 2021.
Data
processing
skill
Part F Provide three possible reasons for your findings in Parts D and E 300 Critical
thinking
Appendix Document the process of your teamwork:
• How the work is planned.
• How the work is shared among group mates.
• What collaboration tool is used.
• What is the frequency of group meetings.
• What is the achievement in each group meeting.
Teamwork
skill
Instructions
Below, we provide you with some instructions for each part of the research report.
Part Instructions
Title The research report should have a title. One example of the title is “The impairment of
Property, Plant, and Equipment around COVID-19.”
Part A The statement of the valuation models of PPE is related to the below Learning Objectives
of Topic 5:
LO5 Explain the cost model of measurement
LO6 Explain the revaluation model of measurement
There are two methods to find out the 2021 annual report of the five (5) firms. The first
method is to check out the company’s official website. The second method is to google
“company name + annual report 2021.”
The use of the valuation model of PPE can be seen in the note of “Property, plant, and
equipment” to the financial statements. “Ctrl + F” – the keyboard shortcut of the “Find”
option – can help you quickly locate the note of property, plant, and equipment in the
financial statements.

Part B The statement of the impairment test is related to the following Learning Objectives of
Topic 6:
LO3 Explain how to undertake an impairment test of an individual asset
LO4 Identify the cash-generating unit and account for an impairment loss for a cash-
generating unit not including goodwill.
The impairment test of PPE can be seen either in the note of “property, plant, and
equipment” or the note of “impairment” to the financial statements. “Ctrl + F” – the
keyboard shortcut of the “Find” option – can help you quickly locate different notes to the
financial statements.

Part C PPE's impairment and carrying amount data can be extracted from the "property, plant, and
equipment" note to the financial statements. The 2021 annual report will provide you with
the "impairment of PPE" and "beginning-year carrying amount of PPE" for two
consecutive years: 2021 and 2020. The 2019 annual report will provide you with
"impairment of PPE" and "beginning-year carrying amount of PPE" for two conservative
years: 2019 and 2018. Therefore, there is no need to search for annual reports for each year.

Most firms record the accounting numbers in millions, but some firms record the numbers
in thousands. Please transform thousands into millions so that your data has the same unit
for all the numbers. Compile the data according to the format as follows:

Firm Fiscal year
Beginning-year carrying
amount of total PPE
Impairment of total PPE
Woolworths Group Limited 2018
Woolworths Group Limited 2019
Woolworths Group Limited 2020
Woolworths Group Limited 2021
Wesfarmers Limited 2018
Wesfarmers Limited 2019
Wesfarmers Limited 2020
Wesfarmers Limited 2021
Aurizon Holdings Limited 2018
Aurizon Holdings Limited 2019
Aurizon Holdings Limited 2020
Aurizon Holdings Limited 2021
Computershare Limited 2018
Computershare Limited 2019
Computershare Limited 2020
Computershare Limited 2021
Elders Limited 2018
Elders Limited 2019
Elders Limited 2020
Elders Limited 2021


Part D

Use the excel "Average" function to calculate each year's average impairment and average
impairment ratio (impairment divided by beginning-year carrying amount). Round
numbers to two decimal places and express the impairment ratio as a percentage. For
example, an average impairment of 0.4787 is rounded to 0.48, and an average impairment
ratio of 0.004787 would be 0.48%.

See here for the average function in Excel.
See here for rounding decimals and formatting percentages in Excel.
See here for the plot of a bar graph in Excel.

Below shows an example of the bar graph:





0
5
10
15
20
25
2018 2019 2020 2021
Average impairment around COVID 19
0
5
10
15
20
25
2018 2019 2020 2021
Average impairment ratio around COVID 19
Part E See here for correlation analysis in Excel.

To find out the location of the head office of a firm, please enter the full name of a firm
into the search box of the IBISWorld website (https://www.ibisworld.com/).
To find out the number of new cases reported in each state of Australia, please search the
COVID Live website (https://covidlive.com.au/), look for the image , click
the three-digit state code, click “cases”, then the new cases per day in a state will show
up. Please calculate the total number of new cases for the firm’s head office state by 30
June 2021.

Compile the data using the below format and use correlation function in Excel to perform
the correlation analysis.
Firm Total impairment during
COVID-19 (impairment in 2020
plus impairment in 2021)
Total impairment rate
during COVID-19
(impairment in 2020 plus
impairment in 2021)
Total new cases
of the firm’s
head office state
by 30 June 2021
Woolworths Group Limited
Wesfarmers Limited
Aurizon Holdings Limited
Computershare Limited
Elders Limited


Part F

You can discuss the possible reasons from many aspects as long as your arguments are
reasonable and are consistent with your findings.

Appendix

See here for our university’s instructions on teamwork.


Marking
Part Marking criteria Marking
Title The title will not be marked.
Part A 5 marks for the accuracy and clarity of the statement of the valuation
models. 5 marks for the use of the valuation model of the five (5) firms.
10
Part B 5 marks for the accuracy and clarity of the statement of the impairment test.
5 marks for the impairment tests of the five (5) firms.
10
Part C 2 marks for the data collection accuracy for each of the five firms. 10
Part D 2.5 marks for the bar graph of impairment. 2.5 marks for the bar graph of
impairment ratio.
5
Part E 5 marks for the data collection for measuring the severity of COVID-19
and 5 marks for the correlation analysis.
10
Part F 5 marks for the reasonability and clarity of each reason provided. 15
Appendix The documentation of the teamwork will not be marked. Active group
members will receive the same marking for the group work. However,
missing or inactive group participants will receive zero marks, as evidenced
by this documentation. A group work done by one or two active group
members will have the marking adjusted upward if it falls below the 75
percentile of the overall marking. A group work done by three active group
participants will have its marking adjusted upward if it falls below the 25th
percentile of the overall marking.

Total 60
Weight 10%
Submission

Submission Details
Submission deadline Friday 6 May 16:00 pm
Submission document A PDF document containing all the parts of the research report.
Submission location Submit to Moodle under the “group assignment” folder.
Submission link will be available at least two days before the
submission due date. Each group member should submit.


Special consideration
If you want to apply for special consideration for this group work, please email chief examiner
Jenny Guan (jenny.guan@monash.edu) and also communicate with your team members.