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ADVANCED FINANCIAL ACCOUNTING 1 Advanced FINANCIAL ACCOUNTING Author Note Assessment Task Part A

   

Added on  2020-05-28

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Running head: ADVANCED FINANCIAL ACCOUNTINGAdvanced Financial AccountingName of the Student:Name of the University:Author Note

1ADVANCED FINANCIAL ACCOUNTINGTable of ContentsAssessment Task Part A..................................................................................................................2Answer to Question i...................................................................................................................2Answer to Question ii..................................................................................................................2Answer to Question iii.................................................................................................................2Answer to Question iv.................................................................................................................2Answer to Question v..................................................................................................................3Answer to Question vi.................................................................................................................3Answer to Question vii................................................................................................................4Answer to Question viii...............................................................................................................4Assessment Task Part B...................................................................................................................4Answer to Question (i).................................................................................................................4Answer to Question (ii)...............................................................................................................5Answer to Question (iii)..............................................................................................................5Answer to Question (iv)...............................................................................................................6Answer to Question (v)................................................................................................................6References........................................................................................................................................8

2ADVANCED FINANCIAL ACCOUNTINGAssessment Task Part AAnswer to Question iThe annual report of Computershare Limited for the financial year of 2017 has beenchosen for the purpose of this report. The assets that have been tested for impairment are theintangible assets of the firm namely goodwill and mortgage servicing rights and trade receivables(Kabir and Rahman 2016).Answer to Question iiThe firm had conducted the impairment testing by grouping the assets at the lowestlevels. These are the assets that result in largely independent cash inflows or are the cashgenerating units of the firm. The cash generating units or the groups of cash generating units arethe financial components to which the allocation of goodwill is done. It has been furthermentioned in the annual report of the company that with the expansion of business by the group,the reporting structures may change which may lead to the re-examination of the cash generatingunits and the allocation of goodwill to these cash generating units. When the testing is done thecarrying amount for each of the groups of cash generating units is compared with the recoverableamounts. This recoverable amount has been further calculated on the basis of value-in-usecalculation for each of the CGU groups to which the goodwill has been allocated. Thecomputation of the value-in-use is executed by a discounted cash flow method on the basis offive years of cash flow forecasts added with the terminal value (Li and Sloan, 2017).Answer to Question iiiThe firm has recorded expenditure or impairment charge during the period, whichamounts to $11,315 million. This had occurred due to the fact that the previous implementationof UK Tax Free childcare scheme reduced the earnings of the voucher services byComputershare Limited as a result of which $11.3 million had been booked against goodwill(Filip, Jeanjean and Paugam 2015).Answer to Question ivThe key assumptions that had been made by the firm in conducting the impairmenttesting are as follows:

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