Posted: August 4th, 2020
Financial Accounting Assignment | Homework For You
Required: 1. Provide a short introduction to the case.
2. To evaluate the potential acquisitions from an accounting perspective, calculate the net asset values of both target firms in accordance with Australian Accounting Standards, and calculate how these values differ from the acquisition price. Prepare and explain the potential journal entries that Greenmount Ltd would need to process for the acquisition costs and business combination under both scenarios.
3. You remember an in-class discussion from your studies at QUT about the use of fair value accounting versus historical cost accounting. Provide arguments for and against the use of both methods and explain the trade-off between the two methods in the context of the objective and fundamental characteristics of financial reporting.
4. Provide a recommendation to your CFO regarding which business to acquire. Base your recommendation on the short- and long-term effects of the acquisition on the balance sheet and income statement of Greenmount Ltd. Include an explanation of the accounting practice for the difference calculated in part 2 between the net asset value and acquisition price. Accounting homework help
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