Investment Options for Orange Ltd's Patented Technology: Accounting Treatment

Running head: ADVANCED FINANCIAL ACCOUNTING
Advanced Financial Accounting
Name of the Student:
Name of the University:
Author’s Note:

1ADVANCED FINANCIAL ACCOUNTING
Table of Contents
Answer to question 1:......................................................................................................................2
Answer to question 2:......................................................................................................................6
Sub part (a):.................................................................................................................................6
Sub part (b):.................................................................................................................................6
References and bibliography:..........................................................................................................7

2ADVANCED FINANCIAL ACCOUNTING
Answer to question 1:
MEMORANDUM
Date: 06 May 2019
To: The Management of Hamilton ltd
From: [Name], Accountant
Subject: Analysis of Investment opportunities in Orange Ltd
Introduction:
This memorandum is prepared to analyze the investment opportunities in Orange Ltd to
get control over the patented technology of Orange Ltd for an improved production system of
mobile phone components. It describes the ways of investment in which such access to the
technology can be get and the respective accounting treatments in the books of accounts for the
investments.
Proposed Investment Options to get access to the patented technology:
The company is unable to acquire the net assets of Orange Ltd, but there are two
proposed options, in which the control over the patented technology of Orange Ltd can be
availed. One is to purchase 35% of the issued shares of the company and the other is to purchase
80% of the issued shares of Orange Ltd. Each shares of the Orange Ltd carries a single voting
right. It implies, if 35% shares are purchased, the Hamilton Ltd will have 35% voting in the
general meeting in taking any important business decision, and if 80% of the shares purchased
then they will have 80% voting right in the annual general meeting.