Financial Reporting and Disclosure 2022

Running head: FINANCIAL REPORTING AND DISCLOSURE
Financial Reporting and Disclosure
Name of the Student
Name of the University
Author’s Note

FINANCIAL REPORTING AND DISCLOSURE1
Table of Contents
Answer to question 1.......................................................................................................................2
Explaining the accounting for acquisition related cost to the board of directors........................2
Requirement of AASB 3..............................................................................................................3
Paragraph 53 of AASB 3.............................................................................................................4
AASB 116 Property, plant and equipment in the business..........................................................5
Accounting for business combination.........................................................................................7
Accounting for cost of acquisition...............................................................................................7
Answer to question 2.......................................................................................................................9
Part A...........................................................................................................................................9
Advising Daffy Duck limited under IFRS 10 for controlling Elmer limited or Fudd limited.....9
Part B.........................................................................................................................................13
Share that is remaining in Elmer limited that are owned by three institutional investors each
holding 20%...............................................................................................................................13
Answer to question 3.....................................................................................................................15
Discussing and justifying the position of the management.......................................................15
References......................................................................................................................................18

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Answer to question 1
Explaining the accounting for acquisition related cost to the board of directors
The preparation of annual report includes the process that are mainly implemented by the
board of directors. Ms Bluff of Southland limited is required to explain the accounting standard
as well as principles in the process of preparation of annual report over a certain time period. In
the organisation, the annual report is the ultimate report that is required to be prepared at the end
of the accounting period (Hamberg & Beisland, 2014). Annual report is a type of financial
statement summary that includes the activities of the company along with considering its current
financial position and future plans of the firm. This particular type of report is mainly provided
to the external as well as internal stakeholders of the company for providing the financial about
the firm and the future plan that has been totally planned by the management of the business
firms. As per the viewpoint of Eloff & de Villiers (2015), annual report of Southland limited
consist of different types of section which mainly provides support to the investors and creditors
for understanding the company along with considering the financial statement that has been
prepared by the management of the company.
A standard report that is prepared annually and which consist of financial information
includes the letter to the shareholders and financial history along with the decision that has been
decided by the management of the firm and analysing the report that has been reported in the
financial statement of the business statement (Tsalavoutas & Dionysiou, 2014). It can be clearly
seen that in a financial statement there are different types of other statement that provides
financial information to the internal stakeholders as well as external stakeholders of the
company. The annual report consist of graphical representation of the data along with photo as

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well as the diagram that would be more attractive in the simple set of financial statements. The
management of the company is also responsible for bragging out the information of the resources
along with including the resources that are available to the company (Barth et al., 2014). The
marketing elements of the firm includes the actual purpose for conveying the resources along
with the financial information to the outside users.
Requirement of AASB 3
Australian Accounting Standard Board has issued this particular accounting standard is to
improve the relevance and reliability for the financial information that would be included in the
financial statement of the company. Based on the viewpoint of André, Filip & Paugam (2015),
AASB 3 mainly deals with business combination along with its effect that helps in establishing
the identifiable assets that has already been acquired by the company in the overall period of
business operation. The liabilities that has been assumed by the non controlling interest and
measures the total amount of goodwill that would be utilised in the business for combination
(Bassemir, 2018). This particular accounting standard that has been developed by Australian
Accounting boards that disclose the financial statements for evaluating the nature of the business
along with financial effect in the overall business combination. This particular standard mainly
applies to the transaction or an event that meets their business combination along with the assets
and liabilities that are generally transferred to the local government at a minimal cost or at no
cost (Baboukardos & Rimmel, 2014). The overall requirement of the standard does not apply on
the acquisition of the business and mainly defined in the AASB 10 that mainly deals with
financial statements of an organisation that are generally consolidated in nature.
A business combination is required to be identified that is required to apply the definition
of the standard for acquiring the assets and the liabilities which mainly reports the business in the

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event of asset acquisition. Cascino, S., & Gassen (2015) has mentioned that the method of
acquisition is the entity along with each business combination that is required to apply the
overall acquisition method for identifying the acquirer and determining the date of acquisition.
The measurement of goodwill is identified as their assets by controlling the non controlling
interest along with gaining the bargain purchase (Ball & Shivakumar, 2015). The guidance for
the accounting standard is totally based for the entities that determines the date of acquisition for
obtaining the control over the acquired assets. On the other hand, the part of recognition is
required to be qualified on the overall method of acquisition that must meet the identification
along with the framework and presentation of the financial statement that has been prepared by
the management of the company. According to Abdul-Baki, Uthman & Sannia (2014), the
liabilities of the company are required to withstand the overall method of business combination
that includes the post combination of the financial statement that are directly associated with the
Australian Accounting Standard.
Paragraph 53 of AASB 3
AASB 3 consist of different paragraph that relates with different aspects of business
combination transaction along with mentioning the nature of transaction that are related to the
overall cost that has been incurred during implementation of the overall process. In the paragraph
53 of the Australian Accounting Standard Board 3, it deals with cost that are incurred in the
overall process of acquisition. The cost that are related to the cost of acquisition includes the
total amount of cost that has been incurred in the overall process which might affect the overall
business combination (Balsari & Varan, 2014). These are the total cost that are associated with
fees for advisors, legal costs, cost for the process of accounting along with consulting fees and
administrative costs. These are the cost that are directly related to the overall department of

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management and maintain the internal acquisition of the departments that would be beneficial for
the company in the normal course of business (Liu et al., 2014). The department of acquisition
mainly bears these mentioned cost which would be directly associated with the business along
with registering and issuing the debt security of the business firm.
The equity securities for the effective benefits that the company includes the department
of cost that would be beneficial for the company in their normal business course. The cost that is
incurred in the process of registering and issuing the debts along with maintaining the equity
securities of the firm that has acquired its assets (Johansson, Hjelström & Hellman, 2016). The
acquirer is required to access the account that is directly related to the acquisition related cost as
the total amount of expenses in the current financial period which are associated with the cost
that would be incurred in all the services that are provided to the customers. The services that are
received with each of the acquisition has at least one exception that would be initiated with the
total amount of expenses that has already incurred in the business transaction (Evans et al.,
2014). The cost that has incurred in the overall process of issuing of debt or the equity of the
company is required to be recognised in according of AASB 132 as well as AASB 9 that would
be effective in the business firms. Therefore, this particular paragraph that is paragraph 53 of
AASB 3 mainly deals with the cost that are directly related to the overall process of acquisition
of the company.
AASB 116 Property, plant and equipment in the business
AASB 116 mainly deals with property, plant and equipment of a business and this
particular standard has been amended and incorporated by IAS 16 which has also been amended
by the International Accounting Standard Board (IASB). Beisland & Knivsflå (2015) has stated
that this particular standard mainly prescribes the treatment for accounting for the available