PART A
Background:
Choose one (1) company listed on the Australian Stock Exchange (ASX) and register the company with your Lecturer. Students are not to select the same company with any other student in their class.
Use two (2) recent years of your chosen company's annual report, and answer the following questions. You must state the 2 years you are analysing in your report.
Required:
Based on the two-year annual reports of your chosen company, including its financial statements and notes to the financial statements, answer the following:
1. For each of the following, provide two (2) examples, as evidence of your chosen company fulfilling these issues:
a. providing qualitative characteristics of relevance and comparability (1 example for each characteristic); and
b. disclosing environmental reporting practices (2 examples)
2. In your opinion, are the information and disclosures provided by your company in (1) adequate? Explain.
3. Provide at least two (2) recommendations to the top management of your chosen company, to strengthen its compliance with these disclosure issue(s) in future reporting periods.
PART B
i. Explain the purpose of the pre-acquisition entries in the preparation of consolidated financial statements.
ii. When, at acquisition date, there is a dividend payable by the subsidiary, under what conditions should the existence of this dividend be taken into consideration in preparing the pre-acquisition entries?
iii. Why is it necessary to distinguish pre-acquisition dividends from post-acquisition dividends?
iv. If, at acquisition date, the subsidiary has recorded goodwill in its records, how does this affect the preparation of the pre-acquisition entries?
v. If, at the date the parent acquires a controlling interest in a subsidiary, the carrying amounts of the subsidiary's assets are not equal to fair value, explain why adjustments to these assets are required in the preparation of the consolidated financial statements.