22420 Accounting Standards and Regulations
The Complete Exam Bible · Spring 202622420 Overview
- Spring 2026
- Undergraduate subject
- UTS Business School
- AI-invigilated final exam
- In-person midsemester exam
22420 Accounting Standards and Regulations is a University of Technology Sydney Business School subject that the welcome page describes as a step up in workload from first year, distinctive for its focus on highly technical accounting standards and the way they are applied.
- Assessed by An Accounting Pod and Xero assignment, an in-person multiple-choice midsemester exam on Topics 1 to 6, and a final exam on every topic that carries the largest weight.
- Hardest step Moving from definitions to measurement in the second half: present value in leases and convertible notes, retranslation in foreign currency, and deferred tax from carrying amounts and tax bases.
- How to prepare Rebuild each self-study solution type from a blank page, write the journal entry every time, and reconcile answers a second way before moving on.
How 22420 is assessed
| Component | Weight | Format |
|---|---|---|
| Assignment 1: Accounting Pod / Xero | 20% | Online Xero tasks on AccountingPod with a practice part and an assessable part on two case studies; practice opens 10 August, assessment opens 17 August, due 11.59 pm on 10 September 2026 |
| Assignment 2: midsemester exam (in person) | 20% | Saturday 26 September 2026; 20 multiple-choice questions in 90 minutes, on paper on campus; covers topics up to and including Liabilities |
| Final Exam · hurdle | 60% | Final assessment period, 2 to 20 November 2026; all topics from the semester; AI-invigilated in Canvas through the ProctorU Guardian browser; at least 40% required |
The three weights in the Week 1 lecture total 100%. The lecture also sets two pass rules: at least 50% overall, otherwise a Z grade, and at least 40% on the final exam, otherwise an X grade, which allows a supplementary exam but caps the subject result at 50%. The subject materials give no duration or permitted materials for the final exam, so check the UTS exam timetable and Canvas.
Current 22420 dates
| Date | Item | Control |
|---|---|---|
| 10 September 2026 | Assignment 1 due | Accounting Pod assessment closes at 11.59 pm |
| 26 September 2026 | Midsemester exam | in person on campus, Topics 1 to 6 |
| 2 to 20 November 2026 | Final assessment period | final exam timetabled by UTS |
| 7 December 2026 | Results released | supplementary assessments 14 to 18 December |
Dates are as published in the Spring 2026 subject pack calendar and the Canvas assignment pages. Confirm exact deadlines and submission settings in the live LMS.
What 22420 covers
22420 runs eleven topics across the Spring session in two parts. Topics 00 to 06 build the pattern: why reporting is regulated, the Conceptual Framework, revenue, inventories and property, plant and equipment, intangibles and impairment, agriculture and mining, and liabilities, which together make up the in-person midsemester exam.
Topics 07 to 11 apply it to leases, foreign currency, financial instruments, hedging and income tax. The 60% final exam covers every topic, so each chapter below follows the teaching order.
Why Financial Reports Exist and Who Regulates Them
decision making, contracting and stewardship · agency problem · AASB, ASIC and the ASX · (Topic 00)Three jobs for one set of numbers
The subject opens by asking why accountants exist.
- Decision making: the users of general purpose financial reports
- Contracting: principals, agents and the agency problem
- Bonus plans and debt covenants written in accounting numbers
- Stewardship and demonstrating delegated authority
- Earnings management and why policy choice is limited
- AASB, IASB, ASIC and the ASX: generate, mandate, enforce
Conceptual Framework and Financial Statement Presentation
qualitative characteristics · element definitions · AASB 101 and AASB 108 · (Topic 01)The objective and the qualities of useful information
The Conceptual Framework, adopted from the IASB version in 2019, sets one objective: information useful to investors, lenders and other creditors deciding whether to provide resources.
- Objective of general purpose financial reporting (OB2)
- Going concern as the only stated assumption
- Relevance, materiality and faithful representation
- Comparability, verifiability, timeliness and understandability
- Asset definition: right, potential for benefits, control
- Liability definition: present obligation from a past event
Revenue Recognition and Reporting Performance
AASB 15 five steps · price allocation · over time or point in time · EPS · (Topic 02)Five steps to revenue
AASB 15 recognises revenue when or as an entity satisfies a performance obligation by transferring control of a good or service.
- Income versus revenue: ordinary activities
- Contract criteria, including probable collection
- Performance obligations in bundled sales
- Allocating the price on stand-alone selling prices
- Three tests for satisfaction over time
- Control indicators for a point in time
Asset Measurement: Inventories, PPE and Impairment
lower of cost and NRV · cost of PPE · revaluation model · recoverable amount · (Topic 03)Cost first, then a ceiling
Under AASB 102 inventories are carried at cost or net realisable value, whichever is lower, using first-in first-out or weighted average where items cannot be tracked individually.
- Components of inventory cost
- Net realisable value and the lower-of rule
- FIFO and weighted average cost formulas
- What enters the cost of property, plant and equipment
- Cost model versus revaluation model
- Revaluation increases, decreases and the surplus
Intangible Assets, Goodwill and Cash-Generating Units
research and development · useful lives · goodwill · CGU impairment allocation · (Topic 04)Recognising intangibles
An intangible asset under AASB 138 is identifiable, non-monetary and without physical substance.
- Identifiable, non-monetary, without physical substance
- Initial measurement at cost or acquisition-date fair value
- Research expensed; development and the six criteria
- Internally generated brands and customer lists excluded
- Finite and indefinite useful lives
- Goodwill under AASB 3
Agriculture, Mineral Resources and Fair Value
AASB 13 fair value · AASB 141 biological assets · AASB 6 exploration · (Topic 05)Fair value as a measurement framework
AASB 13 defines fair value as an exit price in an orderly transaction between market participants, valued on the most valuable use market participants would make of a non-financial asset.
- Fair value: exit price, orderly transaction, market participants
- Most valuable use of a non-financial asset
- Control versus management of agricultural activity
- The presumption in favour of fair value less costs to sell
- Produce recognised at harvest
- Splitting value change into price and physical parts
Provisions, Contingent Liabilities and Employee Benefits
present obligations · contingent liabilities · leave accruals · discounting · (Topic 06)Provisions and contingencies
Under AASB 137 a provision is a present obligation, legal or constructive, of uncertain amount or timing, measured at the best estimate and discounted at a pre-tax rate where the effect is material.
- Present obligations: legal and constructive
- Liability, provision, contingent liability or nothing
- Best estimate and discounting a provision
- When a contingent liability becomes a provision
- Paid absences: accumulating and non-accumulating
- Vesting and non-vesting sick leave
Lease Accounting for Lessees and Lessors
right-of-use asset · lease liability schedule · lessor net investment · (Topic 07)The lessee capitalises
AASB 16 treats a lease as a contract conveying the right to use an identified asset for a period in exchange for consideration.
- Definition of a lease and the right to use
- Substance over form: control rather than ownership
- Measuring the lease liability at the implicit rate
- Payments in arrears versus in advance
- Leaving out maintenance and insurance amounts
- Interest and depreciation over the lease term
Foreign Currency Transactions
monetary items · exchange differences · functional currency · (Topic 08)Translate, then retranslate the monetary items
Under AASB 121 a foreign currency transaction is recorded at the spot rate on the transaction date.
- Spot, closing and forward exchange rates
- Monetary and non-monetary items
- Transaction date and delivery terms
- Retranslation at the reporting date
- Realised and unrealised exchange differences
- Paragraph 28 and paragraph 30 rules
Financial Instruments: Classification and Measurement
amortised cost, FVOCI, FVTPL · liability or equity · convertible notes · (Topic 09)Holders: why is it held?
A financial asset is measured at amortised cost, at fair value through other comprehensive income or at fair value through profit or loss, depending on its contractual cash flows and the business model under which it is held.
- Financial asset, financial liability and equity instrument
- Items outside the definitions
- Contractual cash flow test and business model
- Amortised cost, FVOCI and FVTPL
- Preference shares: liability or equity
- Offsetting under paragraph 42
Hedge Accounting
forward contracts · fair value hedge · cash flow hedge reserve · (Topic 10)Why hedge accounting exists
A forward exchange contract is a financial instrument at fair value.
- Forward contracts as financial assets or liabilities
- Why hedge accounting is restricted
- Fair value hedge of a recognised payable
- Spot rate for the item, forward rate for the contract
- Cash flow hedge of a forecast sale
- The cash flow hedge reserve and reclassification
Accounting for Income Tax
current tax worksheet · tax base · deferred tax assets and liabilities · (Topic 11)Two measures of profit
Accounting profit follows the standards and accrual accounting; taxable profit follows the tax authority’s rules, closer to cash.
- Accounting profit versus taxable profit
- Tax caused versus tax paid
- Permanent and temporary differences
- The current tax worksheet
- Carrying amount, tax base and the four steps
- Taxable and deductible temporary differences
Its three learning objectives are to critically appraise corporate reporting issues, interpret accounting standards and apply them in various settings. The subject runs in two parts.
The first introduces the context of financial reporting, the sources of its rules and a group of relatively straightforward standards, so that you see the common problems standards address and the common ways they address them: the Conceptual Framework, revenue under AASB 15, inventories, property, plant and equipment, impairment, intangibles, agriculture and mineral resources, fair value, and provisions and employee benefits.
The second part uses that pattern to read more complex standards on leases, foreign currencies, financial instruments and hedging, and income taxes. Teaching is organised into modules that each open with short videos, followed by a weekly lecture, self-study problems with solutions in the subject pack, and a tutorial.
The required textbook is Loftus et al., Financial Reporting, 5th edition, and the standards themselves are read from the AASB website. Assessment combines an Accounting Pod assignment on Xero worth 20%, an in-person multiple-choice midsemester exam worth 20% and a final exam worth 60% that covers every topic. A recurring idea ties the subject together: substance over form.
Leases are recognised because the lessee controls a right of use, financial assets are measured according to why they are held, hedge accounting is allowed only for genuine risk reduction, and tax expense follows the tax caused rather than the tax paid.
This guide follows the teaching order chapter by chapter, works each method with its own numbers and journal entries, and ends with a mixed practice set and an exam-morning checklist.
Worked example · free
Measuring a lease liability and running its first year
- 1Annuity factor at 7% for 4 years: (1 − 1.07^−4) ÷ 0.07 = 3.387211.
- 1Lease liability: $50,000 × 3.387211 = $169,361; with no payment at commencement the right-of-use asset is also $169,361.
- 1Year 1 interest: $169,361 × 7% = $11,855, so the payment repays $38,145 and the liability falls to $131,216.
- 1Depreciation over the 4-year lease term: $169,361 ÷ 4 = $42,340.
Key terms
- Conceptual Framework
- The set of inter-related concepts that defines the nature, purpose and content of general purpose financial reporting.
- Performance obligation
- A promise in a contract to transfer a distinct good or service to a customer.
- Net realisable value
- Estimated selling price less estimated costs of completion and costs to make the sale.
- Recoverable amount
- Whichever is larger of an asset’s value in use or its fair value less costs of disposal.
- Cash-generating unit
- A group of assets tested for impairment together because they generate cash only in combination.
- Fair value
- The price an entity would get for an asset, or pay to pass on a liability, in an orderly trade with market participants.
- Constructive obligation
- An obligation from past practice or a public commitment that leaves the entity no realistic alternative.
- Right-of-use asset
- A lessee’s asset representing its right to use an underlying asset for the lease term.
- Monetary item
- Currency on hand, or a right or duty to receive or pay a fixed or determinable number of currency units.
- Compound instrument
- A financial instrument, such as a convertible note, with separate liability and equity components.
- Cash flow hedge
- A hedge of a highly probable forecast transaction whose gains and losses wait in a reserve until it occurs.
- Tax base
- The amount attributed to an asset or liability for tax purposes, compared with its carrying amount.
22420 FAQ
How is the final exam run?
The final exam is worth 60% and covers all topics from the semester. It sits in the final assessment period from 2 to 20 November 2026 and is AI-invigilated in Canvas through the ProctorU Guardian browser, so complete the ProctorU practice exam beforehand. The subject materials do not state its duration or permitted materials, so confirm those details in your UTS exam timetable and on Canvas.
Is there a hurdle on the final exam?
Yes. The Week 1 lecture says you must score at least 40% on the final exam, otherwise you receive an X grade: you are offered a supplementary exam but the subject result cannot exceed 50%. You also need at least 50% overall, otherwise the result is a Z grade, so a strong in-semester mark alone is not enough.
What is in the midsemester exam?
The midsemester exam is Assignment 2, worth 20%. It was held in person on campus on Saturday 26 September 2026, on paper, with 20 multiple-choice questions in 90 minutes. It covers all topics up to and including the liabilities module, and several versions of the paper are used, so practise definitions and quick calculations under time pressure.
What is the Accounting Pod assignment?
Assignment 1 is worth 20% and runs on the AccountingPod platform with Xero. A practice part opened on 10 August and the assessable part, built on two Xero case studies, opened on 17 August and closed at 11.59 pm on 10 September 2026. The practice part gives task-level feedback; the assessment part does not.
Which topics do students find hardest in this subject?
The welcome page describes the subject as a step up in workload from first year because of its highly technical standards. The second half is where most effort goes: leases, foreign currency, financial instruments, hedging and income tax combine present value, remeasurement and journal entries in one question. Practising the self-study solutions by hand is the most direct preparation.
Which textbook does the subject use?
The required textbook is Loftus et al., Financial Reporting, 5th edition, available through Wiley in print, as an e-text or by subscription. The Canvas resources page warns that students without access to it are far less likely to pass. The accounting standards themselves are free on the AASB website, and the subject pack lists the readings and self-study questions for each topic.
Can I use AI to help study for this subject?
The Week 1 lecture states plainly that AI is not allowed for the subject’s work, and the final exam is AI-invigilated. You can still use a tutor such as Sia outside assessment to understand a method, for example why a lease liability excludes maintenance costs, then practise the self-study problems yourself. University of Technology Sydney academic integrity rules apply to everything you submit.
Questions students ask in each 22420 chapter
- Why is accounting regulated at all?
- Accounting numbers are used by investors and written into contracts such as bonus plans and loan covenants, while managers who prepare them have their own interests. Regulation limits the policies available, gives users more certainty about how numbers are produced and still leaves some judgement. Chapter 01 · Why Financial Reports Exist and Who Regulates Them
- What are the two fundamental qualitative characteristics?
- Relevance and faithful representation. Information is relevant when it can make a difference to decisions through predictive or confirmatory value, with materiality part of relevance, and it is faithfully represented when it is complete, neutral and free from error. Chapter 02 · Conceptual Framework and Financial Statement Presentation
- What is the difference between revenue and income?
- Income covers both revenue and gains. Revenue is the part that arises in an entity’s ordinary activities, such as sales, fees, interest, royalties and rent, while a gain such as profit on selling a non-current asset is income but not revenue. Chapter 03 · Revenue Recognition and Reporting Performance
- Can inventory ever be written back up?
- Only to reverse an earlier write-down. If net realisable value recovers while the goods are still on hand, the write-down can be reversed up to the amount originally written down, but inventory is never carried above its cost. Chapter 04 · Asset Measurement: Inventories, PPE and Impairment
- Can development costs already expensed be capitalised later?
- No. Development is capitalised only from the date all the paragraph 57 criteria are first met, and amounts expensed before that date are never reinstated as an asset. Chapter 05 · Intangible Assets, Goodwill and Cash-Generating Units
- Why was the agriculture standard controversial?
- It requires biological assets at fair value less costs to sell with changes in profit or loss, so unrealised gains enter profit, and fair values can be hard to estimate for assets such as immature trees. Some regulators preferred historical cost data for that reason. Chapter 06 · Agriculture, Mineral Resources and Fair Value
- Can a company provide for a planned overhaul?
- No. A planned overhaul is a future cost with no present obligation, because the company could sell the asset or decide not to repair it. Intentions are not obligations. Chapter 07 · Provisions, Contingent Liabilities and Employee Benefits
- Why must lessees recognise most leases now?
- Because the lessee controls a right to use the asset, which meets the asset definition, and the obligation to pay meets the liability definition. Treating leased and owned assets consistently leads to capitalisation, whatever the legal title. Chapter 08 · Lease Accounting for Lessees and Lessors
- Are shares held in another company a monetary item?
- No. Shares do not give a claim to a fixed or determinable number of currency units, so they are non-monetary, even though they are financial assets that can be sold for cash. Chapter 09 · Foreign Currency Transactions
- Why are some preference shares liabilities?
- Because substance overrides legal form. A preference share that must be redeemed for cash, with non-discretionary dividends, works like a fixed-rate loan, so the issuer has an obligation it cannot avoid. Chapter 10 · Financial Instruments: Classification and Measurement
- Why are there strict criteria for hedge accounting?
- Because some managers once labelled speculative holdings as hedges to make risk look smaller. Hedge accounting is allowed only to show genuine risk reduction, so an instrument held to speculate goes straight to profit or loss. Chapter 11 · Hedge Accounting
- Why is tax expense not just tax payable?
- Because taxable profit and accounting profit recognise items in different periods. AASB 112 matches the expense to the tax caused by this year’s transactions, so it includes the deferred tax on differences that will reverse later. Chapter 12 · Accounting for Income Tax
How to study for the exam
Treat 22420 as a subject of methods you rebuild by hand rather than notes you reread. Each week, read the standard paragraphs the lecture names, then work the self-study problems in the subject pack before looking at the solutions, and write the journal entry for every calculation.
Keep a running sheet of the definitions that decide questions: asset, liability and control from the Framework, performance obligations and the over-time tests from AASB 15, recoverable amount, present obligation, monetary item, and tax base. Before the midsemester exam, drill short multiple-choice style questions on Topics 1 to 6, since the paper has twenty questions in ninety minutes.
For the final, give the second half extra time: run a lease schedule to nil, split a convertible note, record a fair value hedge and a cash flow hedge, and complete both tax worksheets, reconciling total tax expense a second way. Remember the 40% threshold on the final exam, which rewards breadth across every topic.
When a step will not click, ask Sia to explain that single step another way, then return to the subject pack and redo the problem without help.
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