Homework: Accounting Standards & Regulations
Length: 1300 words.
Background
You are a recent accounting graduate and have been employed by the Perpetual Trustees (PT) as a Research Analyst. The Asset Management Team is concerned that there may be insufficient investments in so-called ‘new technology' companies and an initial analysis showed that very few of the companies that PT has equity investments in recognize ‘technology' assets.
Task
They do have a significant investment in CSL Ltd, a renowned biopharmaceutical company and they have asked you to prepare a report considering how technology assets are recognized by CSL. In particular:
• With reference to CSL Ltd, identify and summaries the current accounting policies relating to research and development and the development of technology generally, and the scope that this gives for the recognition of ‘technology' assets (i.e., AASB 138).
• With reference to CSL Ltd are there inconsistencies in:
o The treatment of different types of expenditures and the recognition of ‘technology' assets;
o The treatment of expenditure incurred in developing ‘technology' assets compared with other long term assets such as property plant and equipment (i.e., AASB 116);
• What are the consequences for the financial reports of CSL Ltd (i.e., balance sheet and income statement impact) of these inconsistencies?
• What does the empirical evidence suggest in its evaluation as to the relevance of expenditures on ‘technology' assets for financial statement users? Specifically, is there any association between expenditures on technology assets, such as R&D and firm value, stock returns and firm performance?
Format your homework according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the homework, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.