Background You are a recent accounting graduate and have been employed by the Australian Securities and Investments Commission (ASIC) in the Compliance Section. Of particular concern are companies which have experienced substantial share price declines, and your attention has been directed to Vicinity Centres (VCX), a real estate investment trust investing in retail properties (shopping malls). This has experienced a decline in share price of approximately 65%, and the share price is around 30% of the book value of net assets. This gives rise to a series of very high level questions: Is the price decline attributable to the outbreak of COVID-19, and/or other factors impacting the retail sector? Is the recent price decline permanent or transitory? A number of articles from the Australian Financial Review have been provided as background information. It is beyond the scope of ASIC to provide guidance on these questions, but they may provide insights into more relevant questions relating to financial reporting for real estate investment trusts generally, and VCX in particular. ASIC is responsible for ensuring the companies comply with Standard issued by the AASB, and in this instance the requirements AASB140 Investment Property. Required You are required to prepare a report for the Chief Accountant considering the potential impacts of the current situation on the financial report of VCX for the year ended 30 June 2020. In doing so you should address the following questions: (a) With reference to VCX identify and summarise the accounting policies relating to investment properties and how these are dictated by regulation. The emphasis here is on the identification of the accounting policies of VCX and how this manifests in the financial statements. (b) With reference to VCX identify and explain the flexibility management has available in the determination of investment property values. The primary concern here is with the judgements that are necessary in the application of the accounting policies (c) With reference to VCX explain the potential impacts of the changes in the retail industry on the financial reports (balance sheet and income statement impacts). In undertaking this you should review the financial statements for 2018 and 2019 and consider how those numbers may change in light of your review. Be specific as to which items will likely increase/decrease and explain why. (d) Evaluate the potential economic consequences of these changes in the retail industry on the financial reports of VCX. This should be answered using the accounting theory related to the use of financial reports (Week 0 material) and in particular the functions of accounting identified.