ACCM4300: Financial Accounting - Consolidation of Assets & Liabilities

This document provides a comprehensive solution to an individual assignment for the Financial Accounting and Reporting course (ACCM4300), focusing on the recognition and measurement of assets and liabilities within the context of consolidated financial statements. The assignment addresses the acquisition of Cargo Limited by Power Ltd, examining relevant accounting standards, particularly AASB 3 (Business Combinations), and its application to recognition and measurement principles. The report delves into accounting issues related to business combinations, offering solutions and referencing key accounting literature, including AAO Consolidated Financial Statements and various journal articles. The solution includes a memo and video presentation, with the assignment's technical aspects covering the application of accounting standards, while communication skills are assessed through memo writing and video presentation. The assignment assesses the student's ability to analyze, apply, and communicate accounting information effectively, demonstrating their understanding of financial accounting principles and their capacity to present accounting information to both accounting and non-accounting professionals. The report is designed to provide a detailed analysis of the accounting issues involved in business combinations, providing a clear understanding of the recognition and measurement of assets and liabilities.

Financial Accounting and
Reporting
RECOGNITION AND MEASUREMENT OF ASSETS AND LIABILITIES IN
CONSOLIDATED FINANCIAL STATEMENTS

Acquisition of Cargo Limited
 Conditions of acquisition of cargo Limited.
 Reporting requirements of Power Limited.

Business combinations
What is business combinations.
The use of accounting standards.

Applicable accounting standards
 AASB 3 Business Combinations.
 IFRS 3 Business Combinations.

AASB 3: Business Combinations
 AASB 3 has been issued by the AASB under section 334 of the
Corporations Act, 2001.

AASB 3 outlines
 Recognition and measurement of assets.
 Recognition and measurement of liabilities.

Continues..
 Recognise and measure liabilities assumed at the time acquisition of a
business.

Recognition principle of assets
and liabilities.
 Para 10.
 Para 11.
 Para 18.

Solution to the accounting issues
 Accounting issues
 Solutions to the issues.

Accounting issues.
 Issue 1
 Issue 2
 Issue 3

References:
 AAO Consolidated Financial Statements 2018. (2018). Ophthalmology, 125(11), pp.F1-F32.
 Atanasov, A. (2016). ///// (The Category 'Business' in the Context of Accounting for Business
Combinations Under IAS/IFRS). SSRN Electronic Journal, 1(2), pp.10-17.
 BOYMAL, D. (2007). The Work Program and Priorities of the AASB. Australian Accounting
Review, 17(42), pp.3-7.
 Bugeja, M. and Loyeung, A. (2016). Accounting for business combinations and takeover
premiums: Pre- and post-IFRS. Australian Journal of Management, 42(2), pp.183-204.
 Detzen, D., Hoffmann, S. and Zülch, H. (2013). Bright Pharmaceuticals SE: Accounting for a
Business Combination under IFRS 3. Accounting Education, 22(3), pp.282-294.
 Hamid, A. (2016). Accuracy Combination Test of Classical and Modern Technical Analysis: A
Case Study in Stock of PT Wijaya Karya Tbk. Binus Business Review, 7(1), p.71.
 Stevenson, K. (2012). The Changing IASB and AASB Relationship. Australian Accounting
Review, 22(3), pp.239-243.