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Advance financial accounting Question 1 3 Part B 3 Part D 4 Part E 5 Question 2 5 Part A By considering the annual report of Hills Lim Limited

   

Added on  2020-05-16

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Advance financial accounting

TABLE OF CONTENTSQuestion 1........................................................................................................................................3Part A...........................................................................................................................................3Part B...........................................................................................................................................3Part C...........................................................................................................................................4Part D...........................................................................................................................................4Part E...........................................................................................................................................4Part F............................................................................................................................................4Part G...........................................................................................................................................5Part H...........................................................................................................................................5Question 2........................................................................................................................................5Part A...........................................................................................................................................5Part B...........................................................................................................................................6Part C...........................................................................................................................................6Part D...........................................................................................................................................6Part E...........................................................................................................................................6References........................................................................................................................................8

QUESTION 1Part ABy considering the annual report of Hills industry limited, the impairment assets are inventory,assets transferred, intangible assets, goodwill, plant, property, equipment and other receivables(Annual report of Hills Limited, 2017). The further statement shows that goodwill and accountsreceivables were impaired in 2016, but the same transaction is not noticed in 2017, as it isalready on its fair value as per applicable accounting provisions. The annual report shows that the net loss of the year ended is inclusive of a total expenditure of$4.395 million regarding inventory’s impairment (including purchased stick on agreeing on adistribution contract with Tyco during Feb 2015 of amount of $3.461 million and other departurebrands with an amount of $0.934 million) (Annual report of Hills Limited, 2017). Moreover,unrealised losses are eradicated unless and until the transaction offers proof of assets transferimpairment. Impairment of intangible assets, receivables and goodwill is stated as non-IFRSmeasures which are not subjected to review of the audit. Part BFor the impairment of assets; the residual values of assets and their useful life are audited andaltered if suitable, at the end of every accounting period. The carrying amount of assets is writtendown instantly to its recoverable amount, in case the carrying amount is more than its predictedrecoverable amount. Profits and losses on disposable are identified by making comparisons ofproceeds with the asset’s carrying amount (Huikku, Mouritsen and Silvola, 2017). These areinclusive of gains or losses. While revaluing assets are sold, it is the policy of Group to dotransferring of amounts comprise in reserves in context with those assets to the proceeds reserve. In terms of goodwill; the value of an asset held on the purchase of subsidiaries is inclusive ofintangible assets is considered. Goodwill is not considered as amortised. However, it is tested forimpairment on an annual basis or more often when changes in situations show that may beimpaired. Further, it is carried at less cost accumulated impairment losses, Profits and losses onenterprise disposal contain the goodwill’s carrying in relation with the enterprise being sold(Chen, Shroff and Zhang, 2014).

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