Part A (6 Marks) AASB 3 Business combinations para.14 requires that the acquisition method be used to account for business combinations. This method requires the identification of the acquirer. For example‚ para.17 states that “an acquirer shall be identified for all business combinations”. • Provide and explain a list of factors that may assist management to identify the acquiring entity. • Explain why it is necessary to identify who is the acquirer in a business combination? (Adapted from
Premium Generally Accepted Accounting Principles Balance sheet Goodwill
introduction of an accounting standard covering share based transactions? The share-based transaction‚ such as share options for employees‚ was not attributed a cost in the past although the use of such equity instruments was widespread. As a result‚ the AASB 2 Share-based Payment was introduced to force entities to incur a cost the transaction. Moreover‚ the treatment of share-based payment transactions was very controversy before 2005 which made inter-firm comparison difficult. So the introduction of
Premium Stock market Strike price Binomial options pricing model
Tutorial 1 Chapter 1 9. Outline the differences between shares and debentures. Ordinary shares attract no fixed rate of dividend‚ carry voting rights and may participate in surplus assets and profits of the company – they represent ownership of x% of the company. Ordinary shares are classified as equity. The company may issue shares either fully paid or partly paid (s. 254A). If partly paid shares are issued‚ the shareholder is liable to pay calls on the shares (except in the case of no liability
Premium Balance sheet Asset Financial statements
Introduction Australia‚ an island continent‚ located entirely in the Southern hemisphere‚ is one of the largest countries in the world. Like the United States‚ it is still a young and constantly evolving nation. Originally being a penal colony‚ part of the British Empire‚ Australia has grown into an essentially independent country and has proven to be a solid force in both the world economy and in the field of accounting. • History and Federal structure The isle of Australia was discovered
Premium Financial statements Australia Balance sheet
million. One of the ways the WoolWorths limited (WOW) would use to change its profits is by applying AASB 139 Financial instruments: Recognition and Measurement. Terms and conditions on loans fall under AASB 139 and failure to observe them causes enormous complications which are a great risk to the Company. The fair value of the loans could be different from the exact amount and therefore AASB 139 necessitates
Premium New Zealand Corporation Marketing
at the end of the period (Woolworths 2012‚ p 126). c) Impairment loss on goodwill i) Impairment loss on Goodwill at 24 June 2012 was $70.6M. ii) Woolworth’s accounting policy with respect to impairment testing of goodwill is consistent with AASB 139 Intangible Assets. Note 11 (Woolworths 2012‚ p 126) specifically states that intangible assets (such as goodwill) with indefinite useful lives are tested for impairment annually and when there is indication that the asset may be impaired‚ the impairment
Premium Balance sheet Goodwill Subsidiary
Introduction It is a requirement that‚ if an entity is defined as a reporting entity‚ it is required to release financial reports that comply with the Australian Accounting Standards Board (AASB) (Deegan 2008:83). Two companies have been chosen to analyse their reports‚ in particular the disclosures made in their respective reports. The two companies chosen to analyse are Commonwealth Bank of Australia (CBA) and Macquarie Bank Limited (MBL). CBA The Commonwealth Bank is one of Australia’s
Premium Balance sheet Generally Accepted Accounting Principles Income statement
Current Value Accounting and Its Influences on Accounting Environment Wei Cui Abstract Current Value Accounting is one of the hot spots of accounting researches. Three prevailing current value accounting methods are present value method‚ current entry price method and current exit price method. All these methods aim at adjusting the book value of assets and liabilities so that the information will not be distorted by the changing prices
Premium Generally Accepted Accounting Principles Balance sheet Net present value
levied by the federal through the income tax payable that will become the company’s income tax expense when it is paid. The tax net includes the personal profit‚ business income‚ and the capital gain. Referring to Australian Accounting Standard Board (AASB) 112‚ the income tax expense (income) is not merely equal to current tax liability (asset)‚ but also the function of the deferred tax liabilities and assets (Leo‚ Hoggett‚ & Sweeting‚ 2012). The tax which incurred to a company will depend on the
Premium Taxation Balance sheet Asset
(FTP) ED 192 Revised Differential Reporting Framework In June 2010‚ the Australian Accounting Standards Board (AASB) completed Stage one of their
Premium Finance Generally Accepted Accounting Principles Economics