ENTREP 7059 - Project and Innovation Finance and Accounting
North Terrace Campus - Trimester 3 - 2016
General Course Information
Course Code ENTREP 7059 Course Project and Innovation Finance and Accounting Coordinating Unit Entrepreneurship, Commercialisation & Innov Centre Term Trimester 3 Level Postgraduate Coursework Location/s North Terrace Campus Units 3 Contact Intensive: 36-40 hours Available for Study Abroad and Exchange Course Description Engineers, scientists, technologists and those starting new ventures understand that a good grasp of accounting and financial management disciplines are crucial to success. This course is designed to take such professionals through the essential knowledge and skills development in areas such as: accounting concepts, understanding and analysing financial statements, book keeping, the accounting cycle, cash flow, company accounting, budgeting and planning, an introduction to management accounting. This course introduces financial modelling, analysis of project proposals and cost optimisation. Major topics include the time value of money and capital budgeting processes, depreciation, capitalisation and valuation, sensitivity analysis, value management, earned value, life cycle costing. Application of projects and innovative new ventures.
The context of the course is engineering, technology and information technology design and production, operations and processes, which include consulting, production, procurement, maintenance and logistics supply for technology based operations, including defence, construction, and manufacture, and IT provision for ongoing businesses, assessment of efficiency, risk and quality management, and related aspects.
Course Coordinator: Dr Allan O'Connor
Teaching Staff:Five years after setting up an accounting and tax consultancy, he sold his shares to his partners and set out to establish, grow and harvest a number of business ventures in the education and training space.
Name: Dr Anton Jordaan
Anton Jordaan was originally trained as an accountant and tax specialist.
In subsequent years, one of his businesses was acquired by a stock exchange listed company; and a few years later his business was involved in an IPO. Following the IPO he served as a director of this newly listed company for 2 years.
In addition to the strategic leadership and financial roles over the years, Anton has maintained an interest in education and training, and has 20 years teaching experience in tertiary, vocational and corporate education environments. He has delivered programs in Singapore, Malaysia, Brunei, Hong Kong, USA, UK, Netherlands, South Africa, Oman, Qatar, Russia, Canada and Australia.After attaining a Bachelor of Commerce degree in Accounting, he completed an Honours degree in Accounting, a Master of Commerce degree in Business Management, a MBA degree, and a Master of Advanced Business Practice degree. He has completed a PhD in Entrepreneurship at The University of Adelaide. He is a member of CPA Australia.
Phone: As I travel overseas often, email is my preferred method of contact.
The full timetable of all activities for this course can be accessed from Course Planner.Opening intensive:
Wednesday 31st August and Thursday 1st September 2016
Horace Lamb, 422, Teaching Room
Tuesday 4th and Wednesday 5th October 2016
Petroleum Engineering, G04 Teaching Room
Course Learning Outcomes
The key learning objectives of this course are:
- A pragmatic introduction to accounting concepts and practice.
- Demonstrate a basic understanding and ability to understand accrual accounting and financial statements.
- Interpret and use financial and management accounting reports at a managerial level.
- Understand several internal management reporting concepts, such as costing systems, financial planning and budgeting, breakeven, contribution margin and cost-volume-profit analysis.
- Understand concepts of financial management including short-term liquidity and management of working capital.
- Understand the links between accounting and planning, control, accountability and decision making functions within organisations.
- Understand the decision making process for long-term investments in project management and innovative new ventures.
- Understand the fundamentals of financing new and innovative projects or ventures.
- Understanding of interpretation and use of financial and management accounting reports at a decision making or at a managerial level.
- Undertaking group assignments (if applicable) will take learning into the realm of actual decision making and require the sharing of tasks, schedules, co-ordination of work between people.
University Graduate Attributes
This course will provide students with an opportunity to develop the Graduate Attribute(s) specified below:
University Graduate Attribute Course Learning Outcome(s) Deep discipline knowledge
- informed and infused by cutting edge research, scaffolded throughout their program of studies
- acquired from personal interaction with research active educators, from year 1
- accredited or validated against national or international standards (for relevant programs)
1-9 Critical thinking and problem solving
- steeped in research methods and rigor
- based on empirical evidence and the scientific approach to knowledge development
- demonstrated through appropriate and relevant assessment
3;7;8;9 Teamwork and communication skills
- developed from, with, and via the SGDE
- honed through assessment and practice throughout the program of studies
- encouraged and valued in all aspects of learning
3;7;9;10 Career and leadership readiness
- technology savvy
- professional and, where relevant, fully accredited
- forward thinking and well informed
- tested and validated by work based experiences
1;6;8;9 Intercultural and ethical competency
- adept at operating in other cultures
- comfortable with different nationalities and social contexts
- able to determine and contribute to desirable social outcomes
- demonstrated by study abroad or with an understanding of indigenous knowledges
7-10 Self-awareness and emotional intelligence
- a capacity for self-reflection and a willingness to engage in self-appraisal
- open to objective and constructive feedback from supervisors and peers
- able to negotiate difficult social situations, defuse conflict and engage positively in purposeful debate
Atrill, Peter, Eddie McLaney, David Harvey, Maurice Jenner. (2015), Accounting: an introduction. 6th Edition. Frenchs Forest NSW: Pearson Education Australia. ISBN: 9781486008797
(Please ensure that you obtain the Australian edition and not the NZ or International edition).
The previous Australian editions (3rd, 4th or 5th) will also be fine to use.
Titman, Sheridan, John D. Martin. 2008. Valuation: the art and science of corporate investment decisions. Boston: Pearson Education.
Project Finance Magazine. Complete package of news, analysis, comment and statistics. All seamlessly delivered through traditional and modern media channels. Subscription includes 10 print issues a year, industry sector tailored alerts delivered direct to mobile device or PC, weekly e-news alert, full access to Project Finance magazine online including fully searchable archive dating back to 1999. http://www.projectfinancemagazine.com/
The University of Adelaide’s Barr Smith Library provides a range of learning resources including texts, journals, periodicals, magazines, and access to online databases and information services. It also offers a virtual library which is accessible via the University’s website. The University Library web page is: http://www.adelaide.edu.au/library/
From this link, you are able to access the Library's electronic resources.
If you are a member of the PMI (http://www.pmi.org/Membership.aspx ) you will “gain exclusive access to PMI publications and our global standards*, networking options with our chapters and online communities of practice, and leadership and volunteer opportunities. You’ll also receive discounts on certification exams and renewals, as well as our professional development offerings.” Student membership is USD$40 to join and USD$30 to renew.
* Log in to access complimentary read-only PDFs of all of PMI's published standards or take advantage of discounts on paperback editions
Online LearningMyUni is the University of Adelaide's online learning environment. It is used to support traditional face-to-face lectures, tutorials and workshops at the University. MyUni provides access to various features including announcements, course materials, discussion boards and assessments for each online course of study (see: https://myuni.adelaide.edu.au)
Learning & Teaching Activities
Learning & Teaching ModesThis course is offered in blended learning mode with the face-to-face component offered as intensives.
The information below is provided as a guide to assist students in engaging appropriately with the course requirements.As a guide, a 3 unit course comprises a total of 156 hours work (this includes face-to-face contact, any online components, and self directed study).
Learning Activities SummaryThis is a draft schedule and session dates are a guide only. The timetable may be changed during the course delivery if necessary.
Intensive Content Readings 1 The Nature of Accounting Atrill Chapter 1 & 2 Introduction to Financial Statements Atrill Chapter 3 & 4 2 Financial Statements: Cash Flow Statement Atrill Chapter 5 Analysis of Financial Statements Atrill Chapter 6 3 Sources of Finance Atrill Chapter 2 & 14 Working Capital Analysis
Budgeting & Planning
Atrill Chapter 13
Atrill Chapter 9 & 10
4 Cost concepts Atrill Chapter 7 & 8 Capital Investment decisions Atrill Chapter 11
Specific Course RequirementsStudents are requested to bring a basic calculator to class in addition to their textbook. The textbook is used extensively during intensive sessions, so ensure you obtain one. As indicated before, the 3rd, 4th, or 5th Australian edition of the prescribed text will suffice.
The University's policy on Assessment for Coursework Programs is based on the following four principles:
- Assessment must encourage and reinforce learning.
- Assessment must enable robust and fair judgements about student performance.
- Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
- Assessment must maintain academic standards.
An overview of the course assessment appears in the following Table. Details appear in the following section:
# Assessment Length Weighting Due Date Learning Outcomes 1 Income Statement & Balance Sheet Reports and Notes 30% See MyUni 1,2,3,6 2 Annual Report - Group Assignment 3000 words 30% See MyUni 1,2,3,5,9,10 3 Project Evaluation Assignment 2500 words 30% See MyUni 1,3-9 4 Workshop participation and team presentations N/A 10% See MyUni 1-7,9-10 Total 100%
Assessment Related RequirementsStudents should attend all classes in order to pass the course. There is considerable experiential learning in workshops during the intensive classes that build your knowledge and thus enable you to be successful in this course.
Course results are subject to moderation by the ECIC Board of Examiners
Appropriate use of the Internet in assignments
The purpose of this document is to assist students with appropriate use of the material they have accessed on the Internet in assignments. The Internet is a wonderful source of information and sometimes students are not aware of how to use it properly. For example, a recent case had over 70% of words copied from over 20 other sources. Furthermore, many students think this is the appropriate use of the Internet.
IT IS NOT.
Due to an increasing number of students infringing the University’s Academic Dishonesty Requirements within the Master of Applied Project Management, a more rigorous method of checking assignments is used.
There is a hierarchy of penalties, the lowest of which is the loss of some assignment marks and the student’s name being placed on the Faculty’s Academic Dishonesty Register for six months. This only occurs if I believe this occurred through error. The second level penalty is more significant which is loss of all marks for the assignment and being placed on the University’s Academic Dishonesty Register for the remainder of their time at the University. Even higher penalties can involve the University deciding the student should not graduate. This has occurred in the Master of Project Management.
Appropriate use of the Internet is to include all directly copying of sections of other reports in ‘inverted comas’, as a quotation, and note the source of the quote. To include a group of words without use of inverted commas and without noting where the words came from is an example of academic dishonesty.
Students may not be aware that the University has use of an international database called Turnitin in which all direct use of other material can be traced.
On a more positive note students need to understand the points made in any paper they access on the Internet and integrate these thoughts into their argument rather than just copying large passages. Of course this takes more work but this is what tertiary education requires and, in the end, make students into better thinkers and more able to express their ideas in their assignments.
Assessment 1: Income Statement & Balance Sheet - Minuteman Printers Pty Ltd
Submission Details: Online through MyUni in PDF format
Prepare an Income Statement and Balance Sheet as at 30 June 2014 for Minuteman Printers Pty Ltd
Minuteman Printers Pty Ltd is a supplier of a range of printed material to businesses and organisations. The business is located in Thebarton, South Australia.
Prepare an Income Statement (P&L) which includes allocation of income and expenses, and a Balance Sheet for Minuteman Printers in vertical format for the period ended 30 June 2014. Prepare your work on excel using a spreadsheet.
Note these accounts are for internal reporting only and is not a Trial Balance (for those who have an accounting background or access to an advisor).
You may need to research the Income Statement and Balance Sheet layouts and adjustments from other sources other than the textbook; however, the wider references provided in your course material contain the relevant accounting information.
You are provided with the following balances extracted from Minuteman’s General Ledger at 30.6.2014:
All amounts in $ Accounts payable 217,500 Accounts receivable (debtors) 272,000 Advertising expense 17,000 Allowance for doubtful debts 30,600 Amortisation of goodwill 7,000 Amortisation of R&D 10,000 Asset revaluation reserve 140,000 Bad debts expense 19,000 Carrying amount of delivery vehicle sold 20,000 Cash 135,000 Cost of Goods Sold 2,165,100 Current income tax liability 128,610 Depreciation of motor vehicles 62,000 Depreciation of office furniture 33,000 Design Services rendered 185,000 Freight In 11,075 Freight Out 22,000 General reserve 275,000 Goodwill (at cost) 108,000 Gross proceeds on sale of delivery vehicle 31,000 GST compliance fee 22,800 Accumulated amortisation – goodwill 7,000 Accumulated amortisation – R&D 10,000 GST owing 28,800 Income tax expense for the current year 128,610 Depreciation of retail store equipment 8,000 Depreciation of retail store 25,000 Insurance expense 42,000 Interest expense 4,200 Interest payable 1,500 Inventory 415,000 Land (cost) 300,000 Mortgage loan payable 202,500 Motor vehicles (at cost) 436,000 Office furniture (at cost) 72,000 Prepaid Insurance 8,500 Prepaid rent 6,500 Provision for ordinary dividend 80,000 Provision for preference dividend 40,000 Rates expense 15,000 Rent expense 36,200 Rental from sub-lease agreement 12,000 Research & Development (R&D) costs 80,000 Retail store (at fair value) 925,000 Retained Income (after dividends and reserve transfer at 30.6.2013) 130,000 Salaries - Administrative staff 354,000 Salaries payable 31,000 Sales commissions marketing staff 406,000 Sales discount allowed 15,000 Sales (turnover) 3,550,075 Sales staff vehicle expenses 38,000 Share issue costs 27,000 Retail store equipment (at cost) 93,000 Accumulated depreciation – motor vehicles 180,000 Accumulated depreciation – office furniture 38,000 Accumulated depreciation – retail store equipment 27,000 Accumulated depreciation – retail store 25,000 Preference share capital (400,000 shares issued at $2 each) Ordinary share capital (300,000 shares issued at $1 each)
This assignment will assess your understanding of the course topics 1-2
Length and Presentation:
You need to submit an Income Statement, Balance Sheet and Notes page in pdf format
Criteria by which your assignment will be marked:
FEATURE WEIGHTING % Produce an Income Statement (P&L) that contains all the revenue and expense items 30% Produce a Balance Sheet that contains all the provided Asset, Liability and Equity items 30% Notes - quality of explanatory text 15% Format /layout, clear presentation and quality of response 15% Work that comes to a logical answer (not necessarily examiners) 10% Total 100%
Assessment 2: Annual Report - Financial Statement Analysis - Group assignment
Submission Details: Online through MyUni in PDF
Obtain the annual report of a selected company. Company reports can usually be obtained from their website under the heading of “Investor Relations”.
Using the financial reports, you are to undertake an analysis of the cash flow, financial performance and financial position of the company, considering liquidity, gearing, profitability and operations management. Your focus should be advising a potential investor who is currently considering investing in the selected company. A separate analysis of the cash flow statement is required.
Concentrate in your analysis on the last two reporting years as this is the most current date. However, use five years data to graph major trends where meaningful for your analysis.
You should consider the performance of the company in the eyes of investors; that is, make recommendations as to the better investment opportunity based on your assessments of the performance of the company. Use comparative data from competitors, or industry averages to enhance your analysis, interpretation and recommendations.
Share performance details can be obtained from the website of the stock exchange where the company’s shares have been listed.
You may use any of the techniques and ratios discussed in the course. Comment on the results of your analysis. Please do not include the financial statements in your report as they are usually available on a website.
The company to be analysed must be approved by the lecturer before commencing the project (do not select construction companies, banks, or insurance companies).
This assignment will assess your understanding of the course topics 1 through 4
Length and Presentation:
Maximum 3,000 words. Please include a word count on the front page of your assignment.
Excess words will not be marked.
Criteria by which your assignment will be marked:
FEATURE WEIGHTING % Liquidity analysis and interpretation 15% Gearing analysis and interpretation 15% Profitability analysis and interpretation 15% Analysis of statement of cash flows 15% Potential shareholders’ perspective 10% Comparison of form and content of financial reports 10% Readability, bibliography, and referencing 10% Presentation of report: Executive Summary, Conclusion, Tables, etc. 10% Total 100%
Assessment 3: Project Evaluation Assignment
Submission Details: Online through MyUni in PDF
You are required to submit a project report that describes and evaluates three project alternatives, using the project evaluation techniques discussed in this course. The project alternatives may be hypothetical. Assume you are writing a proposal to your Board of Directors.
Your analysis should include brief estimates of projected revenues and costs of productions and use Discounted Cash Flow analysis, using a justified discount rate to give Net Present Values of 3 alternatives of a capital investment project as well as determine the Internal Rate of Return. Description of the project alternatives should be less than 1 page.
The layout and content should include:
a) Prepare a clear definition of the objectives of the project and, where practical, this should be related to the current strategies of the organisation.
b) The formulation of options to achieve the objectives (e.g. set up a manufacturing plant at locations in countries A, B, or C). Three investment alternatives should be compared.
c) A formulation of the detailed costs and benefits of the options.
d) Calculate the cost of capital (debt / equity).
e) Evaluate each option using DCF techniques (use a minimum period of 5 years and justify the discount rate used).
f) Evaluation of the risks of the project.
g) Recommendation of the most economic option and discussion of any non-financial factors relevant to your decision.
The assignment report should be brief and to the point.
Suggested format for your report.
To ensure adequate coverage of the topic the following format is suggested for your report:
· Executive summary
· Table of contents
· Introduction (not more than one page for introducing the project)
· Discussion of options
· Cost of capital assumptions and calculations (debt/equity costs)
· Description of the costs and benefits of the project
· Evaluation of the project – e.g. DCF calculations to give NPV and IRR
· Evaluation of the risks of the project
This assignment will assess your understanding of the course topics 1 through 9
Length and Presentation:
Maximum 2,500 words. Please include a word count on the front page of your assignment.
Excess words will not be marked
Criteria by which your assignment will be marked:
FEATURE WEIGHTING % Description of project 10% Cost and benefits analysis 10% Basis for selecting the cost of capital 5% Evaluation of project with DCF methods 20% Evaluation of risks 20% Recommendations 15% Readability, bibliography, and referencing 10% Presentation of report: Executive Summary, Tables, etc. 10% Total 100%
Assessment 4: Workshop participation and team presentations
Details: As per lecturer’s request
This assessment will assess your participation during the course. This may include presentations group discussions and contributions in peer learning activities.
Practical activities will be conducted in an interactive learning environment.
Length and Presentation:
Criteria by which your assignment will be marked:
Students are required to attend intensive classes and participate in class discussions and presentations.
SubmissionAll text based assignments must be submitted via MyUni.
Please refer to step by step instructions: http://www.adelaide.edu.au/myuni/tutorials/files/AssignmentStudentSubmission.pdf
There are a few points to note about the submission of assignments:
- Assignment Submission: Assignments should not be emailed to the instructor; they must be lodged via the MyUni Course site (unless specified to do both). Note that assignments may be processed via TURNITIN, which is an online plagiarism prevention tool.
- Cover Sheet: Please submit, separate to your assignment, the completed University of Adelaide Assessment Cover Sheet providing details of yourself and your team members (if applicable), your assignment, the course, date submitted, etc. as well as the declaration signed by you that this is your (your team’s) work. Note that the declaration on any electronically submitted assignment will be deemed to have the same authority as a signed declaration.
- Backup Copy of Assignments: You are advised to keep a copy of your assignments in case the submitted copy goes missing. Please ensure that all assignment pages are numbered. If your assignment contains confidential information, you should discuss any concerns with the Course Lecturer prior to submission.
- Extensions of Time: Any request for an extension of time for the submission of an assignment should be made well before the due date of the assignment to the Course Lecturer. Normally, extensions will only be granted for a maximum of two weeks from the original assignment submission date. Extensions will only be granted in cases of genuine extenuating circumstances and proof, such as a doctor’s certificate, may be required.
- Failure to submit: Failure to submit an assignment on time or by the agreed extension deadline may result in penalties and may incur a fail grade. Note that a late penalty of 5% of the total available marks for that assessment item will be incurred each day an assignment is handed in late (Unless otherwise stated in 'Assessment Related Requirements' or 'Assessment Detail' above). Assignments handed in after 14 days from the due submission date will fail even if a 100% mark is granted for the work.
Resubmission & Remarking
Resubmission of an assignment for remarking after reworking it to obtain a better mark will not normally be accepted. Approval for resubmission will only be granted on medical or compassionate grounds.
Grades for your performance in this course will be awarded in accordance with the following scheme:
M10 (Coursework Mark Scheme) Grade Mark Description FNS Fail No Submission F 1-49 Fail P 50-64 Pass C 65-74 Credit D 75-84 Distinction HD 85-100 High Distinction CN Continuing NFE No Formal Examination RP Result Pending
Further details of the grades/results can be obtained from Examinations.
Grade Descriptors are available which provide a general guide to the standard of work that is expected at each grade level. More information at Assessment for Coursework Programs.
Final results for this course will be made available through Access Adelaide.
The University places a high priority on approaches to learning and teaching that enhance the student experience. Feedback is sought from students in a variety of ways including on-going engagement with staff, the use of online discussion boards and the use of Student Experience of Learning and Teaching (SELT) surveys as well as GOS surveys and Program reviews.
SELTs are an important source of information to inform individual teaching practice, decisions about teaching duties, and course and program curriculum design. They enable the University to assess how effectively its learning environments and teaching practices facilitate student engagement and learning outcomes. Under the current SELT Policy (http://www.adelaide.edu.au/policies/101/) course SELTs are mandated and must be conducted at the conclusion of each term/semester/trimester for every course offering. Feedback on issues raised through course SELT surveys is made available to enrolled students through various resources (e.g. MyUni). In addition aggregated course SELT data is available.
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