Homework: Financial Accounting
• Critically analyse the allocation of acquisition cost to goodwill by considering the following questions
o Is the allocation of acquisition cost to goodwill subjective? Discuss.
o How does the allocation of acquisition cost to goodwill affect profit and cash flows in subsequent years? For your critical analysis, you could compare the effect of the accounting treatment of goodwill in subsequent years with the effect of the accounting treatment of property, plant and equipment (or intangibles with finite useful lives) in subsequent years. [word limit: 250 words]
• The reported goodwill on the Balance Sheet may reveal managers' private information of a firm's future cash flows. However, research argues that subsequent treatment of goodwill may provide opportunities for earnings management. Discuss whether the accounting treatment of goodwill in subsequent years could be a concern for financial reporting.
Format your homework according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.
Attachment:- Case.rar