Part A
Accounting Standard Setting, Regulation and Disclosure
ACCOUNTING STANDARD SETTING
(i) Do your own research and critically explain how the Australian Accounting Standards Board
take part in the global accounting standard setting process (i.e. in setting IFRS). Why is the
IFRS set by the International Accounting Standards Board (IASB) not compulsory for the
member countries of IASB?
REPORTING ENTITY
(ii) Do your own research and critically examine the concepts of small proprietary company,
large proprietary company and reporting entity. What are the implications of being
classified as either one of these three types of companies in terms of compliance and
reporting requirements?
Part B
Business Combination / Acquisition analysis
Collect the latest annual reports of two ASX listed companies. Each of the two companies must have
reported Business Combination as per AASB 3 (Many of the ASX 300 Companies report business
combinations). Carefully read the note disclosure relating to the Business Combination AASB 3.
Answer the following:
(i) How many business combinations did the company report?
(ii) What was the fair value of consideration paid?
(iii) What are the components of acquisition costs, e.g. cash consideration and noncash
consideration?
(iv) What was the fair value of net identifiable assets acquired?
(v) Recognised value of each class of assets, liabilities and contingent liabilities
(vi) Carrying value of each class of assets, liabilities and contingent liabilities
(vii) How much goodwill or gain on bargain purchase has been recorded?
(viii) Factors that contributed to the recognition of goodwill or gain on bargain purchase (if
disclosed)
(ix) What was the amount of goodwill as percentage of total consideration paid?